The Frivolous…The Dumb…and the Ugly

Posted by Laura Otten, Ph.D., Director on March 14th, 2014 in Thoughts & Commentary

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The Nonprofit Center was founded in 1981 as part of La Salle University’s School of Business by a businessman and a business academic who were  well ahead of the curve.  Both were steeped in the nonprofit sector and, thus, straddled both worlds.  They saw the need for nonprofits to operate more like businesses, in some areas, and that there were valuable lessons that nonprofits could learn from the for-profit sector.  Hence we landed in the School of Business, a rather atypical place for a Center such as ours to be.  (Sadly, these two wonderful men didn’t also recognize that there would be equal value if for-profits operated more like nonprofits, in some key areas, and that nonprofits had important lessons to teach for-profits.  But that is for another day).
B strong logo

In the history of The Center, and the history of the movement that followed quite some time later that picked up on the transformative idea of recognizing that nonprofits are mission-driven businesses, there never was the intention to take what was negative from the for-profit world and bring it over to the nonprofit sector.  Rather, the intention was to take lessons that could correct the weaknesses of the nonprofit sector while preserving that which made the nonprofit sector unique and an alternative work culture.  Unfortunately, and increasingly, we seem to have thrown the baby out with the bathwater.

First case:  nonprofits are moving in the terrible direction of becoming litigious, engaging in frivolous law suits against non-existent enemies.  The most “famous” of such a frivolous and actually harmful lawsuit is that filed by Susan G. Komen Race for the Cure.

In 2010, Komen legal actions that included cease and desist orders with threats coming from legal counsel for a cost of over $1 million in legal fees and legal costs for the targeted nonprofits to prevent other nonprofits, from using the phrase “for the cure” in organizational names and fundraising campaigns and to stop using the color pink in any fundraising campaign.  By the end of 2010 Komen had filed more than 100 trademark violations as they fought to protect their 200 registered trademarks.  Seriously?  And how many more they have collected in the ensuing three years?

Trademarks are quite common in the for-profit world and I am not suggesting that there isn’t a place for them in the nonprofit sector.  But words or specific phrases made up of a preposition, an article and a noun?  Really?  Imagine if we all started trademarking words.  We’d no longer be able to communicate!  And then colors?  If Komen had its way, Pretty in Pink would have been Pretty in Chartreuse  and the Pretty in Pink Foundation that ensures that all North Carolina women diagnosed with breast cancer get the best treatment possible, regardless of their ability to pay would now have another name.  Trademarking and protecting trademarks cost money; when worrying about trademarks and protecting them, you aren’t working on mission.

I was reminded of this action by Komen in reading last week about the threatened lawsuit against the Boston Red Sox.  As you may know, after the Boston Marathon terrorist attack, Boston started a campaign called Boston Strong.  The Red Sox, rather smartly, decided to put its iconic “B” (which I will not recreate here as I do not want any lawsuits or cease and desist letters)—but which we all know, even those of us who don’t live in New England, is short for Boston–on the slogan and put a big B Strong sign up on the Big Green Monster last year and the players wore a patch bearing the same message.

Now, The Braden Aboud Memorial Foundation is considering suing the Red Sox to cease and desist with the message.  The Foundation, with a mission to “improve the health and educational development of the youth of El Paso,” apparently trademarked the phrase “B Strong.”  (Again, seriously?  What is wrong with the US Patent and Trademark Office?)   In light of the mission of the Foundation,  where is the harm in having the Boston Red Sox as an ally, as opposed to an enemy?  Do you know how many nonprofits would love to be able to claim anything in common with a team that has won the World Series three times just in this century?  Are people in our sector becoming so possessed with “mine” that they have lost, or are losing lost site, of our purpose?

Nowhere in saying nonprofits must be the mission-driven businesses that they are was it ever even remotely suggested that we should become stupidly and frivolously litigious and pursue perceived enemies.

Second case:  a growing number of bankruptcies that might have been avoided by a merger, had pride, ego and turf not got in the way.  If I look at the last several years, there certainly were more nonprofits filing for bankruptcy under Chapter 11, which allows for an organization to negotiate repayment of debt, reorganize and continue to operate.  Sadly, many of these bankruptcies that made it to media headlines are in the arts and culture arena, and some were stalwarts of their kind, such as the Philadelphia Orchestra and the New York City Opera.  Other lesser known arts and culture organizations, such as the symphonies of Tulsa and Louisville and the US National Slavery Museum, have taken advantage of the opportunities that Chapter 11 gives an organization.

Chapter 11 is intended to give businesses (and individuals) a second chance at getting the bottom line right, of ensuring that expenditures do not far outstrip income.  But is it a good solution for nonprofits?  If a nonprofit board wasn’t paying sufficient attention to allow a nonprofit to get to the point of needing debt restructuring, or if a nonprofit board wasn’t already doing everything it should and could be doing to rebalance income and outgo, what should give us faith and confidence that once reorganized, the nonprofit won’t find itself in the exact same position at some point down the road in the not too distant future?  Is Chapter 11 a truly viable option for struggling nonprofits?  Or, should a nonprofit turn to the option that works so much better when serving a mission – merger?  With bankruptcy, debt is served first, fulfilling mission promises takes a back seat to reorganization and future sustainability remains in question.  With a merger, mission remains primary and continues to be served and clients get what they need.

Third case:  cutthroat competition instead of collaboration.  Several weeks ago, the front-page headline of the Sunday Philadelphia Inquirer screamed, “Those fighting region’s hunger are fighting each other.”  I knew this article was coming because I was interviewed.

In one corner, we have “the big fish” in our regional anti-hunger community, Philabundance, with a President/Executive Director who came to the nonprofit sector from the for-profit world. In the other corner is the Chester County Food Bank, founded, as the article said, “by a scion of the Tylenol fortune in one of America’s richest counties, plagued lately by skyrocketing poverty rates.”

And while they are sniping at one another, claiming the rights to food sources and donors and geography (perhaps they should have a chat with Komen attorneys about trademarking townships), how well are the people who are need their food being served?

I know the capitalist mantra that competition makes us stronger, makes us better, blah, blah, blah.  But stronger for and better at what?  Becoming bigger, increasing the bottom line (for its own sake) becoming the king of the hill, the sole survivor?  None of that is the goal of the nonprofit sector.  In our sector, bigger doesn’t necessary mean better, as too often bigger takes us out of the community we were designed to serve, losing the position of being “of” the community, there to understand and experience the nuances, the changes, the problems.

The goal of our sector is to serve our mission, which means providing what our clients need where they need and want it.  Being king of the hill doesn’t help us achieve that.  To do so, we are far better served by collaboration—an alien concept to the for-profit sector—than to competition, the comfort zone of the for-profit world.

Would that Philabundance, the Chester County Food Bank, the food chains and restaurants that pledge their food to this one anti-hunger group at the exclusion of others, their donors would all collaborate to address hunger (one of the consequences of the 90% increase in poverty in Chester County in the last decade), everyone’s missions and wishes would be better served.

Would that the thousands of organizations working to find a solution for breast cancer and serving those with breast cancer would work together, a cure might actually come in my lifetime.  Would that all those who want to be strong, be it for a city and its citizens irretrievably harmed and scared by a terrorist attack or a community that wishes to help its youth or victims of sexual abuse would look for and embrace their commonalities that reinforce their messages around the nation, if not the world, and recognize that more good comes from working together than against.

None of these for-profit practices that we have allowed into our sector have served us well.  We must stand our ground, recognize what we do that must be corrected while holding on with a ferocity to that which makes us—I’ll say it—better (and bigger people).

The opinions expressed in Nonprofit University Blog are those of writer and do not necessarily reflect the opinion of La Salle University or any other institution or individual.