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Philanthropic innovation requires business leadership

(Phoenix Business Journal – October 26, 2012)

As the season of appeals for charitable contributions commences, it’s worth noting what a rough year it’s been for nonprofits. It’s going to get rougher still. And that has broad implications for the business community.

A number of long-standing organizations have fallen by the wayside — organizations that have sustained, healed, educated and inspired us. For example, the WellCare Foundation, Arizona Jewish Theatre, The Arts & Business Council of Greater Phoenix, and Community Food Connections.

Some are gone because of failures of governance, others because of funding cutbacks they could not withstand, others for their inability to adapt to a highly competitive marketplace.

Still others remain at risk, with zero margin for error and limited internal capacity, drawing on their reserves (if they have any), making last-minute appeals to live another day, or doing far more with far less.

With the full implementation of the Patient Protection and Affordable Care Act looming in 2014, a shakeout among behavioral health and social service organizations is coming. Single program-focused agencies no longer will be viable; some will dissolve, while others will merge into larger
integrated organizations.

Caretakers no longer will be office-based, but will be mobile with remote connections to servers. The emphasis will be on innovation and service integration. Organizations that are equipped with strong infrastructure, metrics and technology, along with the will to integrate services, will be the survivors.

Arts and culture are similarly challenged by the impact of new technologies on audience behavior and alternative forms of entertainment.

The bottom line is that the nonprofit landscape is altering as we speak, and the implications for the business community are profound. For it is businesses and their employees whose lives are enriched by these groups; whose presence makes for a hospitable place to live, work, and stay; whose absence impoverishes us.

It is an alteration that demands a long-term strategy to rethink our structural arrangements not only for philanthropy, but for governance and the configuration and delivery of services. And I contend that, to be successful and impactful, the strategy will require the substantive involvement and investment of this Valley’s business leadership.

Corporate social responsibility is an accepted value and is certainly alive and well in the Valley of the Sun. But it can do better. How it gets exercised, and to what ends, is crucial to the future well-being of our region. As always, business will need to deal with the painful necessity of
choice, responding to requests that far exceed their available funds.

But it behooves us to acknowledge that technological and political trends compel us to seek smarter more economical ways to allocate and leverage our limited reservoir of philanthropic resources.

In a region that excels in innovation, we ought to be able to reframe philanthropy.  Let’s begin that process now. The question is, who will take the lead?

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