Why We Need a Rating and Review System for Nonprofit Services

Information Asymmetry
When you want to try a new restaurant, you can use a service like Google, Yelp, or Urban Spoon to read reviews, check hours and menus, and decide on a place to eat. Thanks to online rating services you’ll be able to make an informed decision about where to enjoy a nice meal.

Now imagine you are struggling to manage your debt and want to sign up for financial counseling. You Google 'financial counseling Rhode Island' and a number of options pop up: Money Management International, Rhode Island Housing, Consumer Credit Counseling Services, etc. A little more digging might direct you to Capital Good Fund, Amos House, or one of the handful of other nonprofit financial coaching organizations in the state. What you won't find, however, is what our dinner goers were seeking: ratings, reviews, and comparisons.

Poverty Is Bad For Business

Poverty and Economic Development

Image credit: Jason via Flickr

Poverty is not merely a moral issue; it is an economic problem. We cannot have a strong economy so long as over 45 million Americans live in poverty and 49 million do not get three square meals a day, every day. And we cannot have a strong economy so long as families making $20,000 per year spend $1,200 on check cashing and money orders.

When a payday lender charges 261%, every dollar the borrower spends on interest* is a dollar not spent on savings, education, clothing, and other basic needs (on a $325 payday loan, the average borrower will pay nearly $500 in interest). When a predatory auto loan results in repossession, it becomes that much harder for a family to get to work, school, or the doctor’s office; jobs are lost, children's health and futures are compromised. And when wages are stagnant, a family's ability to buy homes, cars, and furniture—to engage in spending that drives the economy—is severely curtailed.

Nonprofits: Do We Need Them?

A Cause for Celebration?

Image Credit: Cbaquiran

As Capital Good Fund nears its sixth birthday, I would like to pause for a moment and ask two uncomfortable questions: is this cause for celebration, and fundamentally, do we need nonprofits?

Some background is in order. As a nonprofit executive and donor to a multitude of other charities, I am deeply acquainted with what I like to think of as the glossy facade we erect on our annual reports, grant applications, and public communications. We change the life of every person we serve, and we do so with a minimum of cost. Ours is the business model best suited to solving the problem highlighted in our respective mission statements. Everyone involved with our organization (board members, staff, volunteers, donors, and clients) wanders the world with a perpetual smile, the result of the unequivocal good we do in the world.

The Ideal and the Real
Yikes, that sounds cynical, does it not? Relax, I may have just turned thirty, yet I remain ferociously devoted to my idealism, something so many others told my fifteen-year-old self would never happen! But the dictionary makes a clear distinction between the optimistic and the Pollyannaish, and we would be remiss to forget that.  So let's take an unvarnished look at the nonprofit sector and see what we find.

Five Tips For Job Interviews

Over the past six year's I've had occasion to interview dozens of candidates for all manner of positions: volunteers, interns, part-time and full-time employees, and independent contractors.  Given this depth of experience, I think I'm relatively qualified to give five tips for your next job interview:

When Justice Costs Less Than Injustice

Pragmatic Idealism

Image Credit: Pixshark

I suppose that in an ideal world we wouldn't care about the financial implications of injustice; doing the right thing ought to be sufficient motivation.  Of course, that's not always the case, and rather than restricting ourselves to the high road, I think it's preferable to adopt an approach I like to call Pragmatic Idealism (PI).  The PI mentality says that, on the whole, people want to do good, but in reality a lot of factors can get in the way: inertia, politics, financial concerns, entrenched interests, and the like.  The best way forward, therefore, is to chip away at those barriers while continuing to appeal to the public's sense of right and wrong.

Take homelessness, for example.  One would be hard-pressed to find people in support of the disadvantaged living on the street, but at the same time it can be equally hard to garner support for programs that have a cost.  Put another way, how many of us would vote for tax increases so as to fund proven, effective models for putting the homeless into permanent, safe, and affordable housing?

The Chance to Speak

The Power of the Spoken Word
I don't think it's a stretch to say that were it not for his oratorical skills, Barack Obama would not be president of the United States; before his speech at the 2004 Democratic National Convention he was a complete unknown on the national stage.  In the same vein, it's hard to imagine the civil rights movement without the soaring rhetoric of Dr. King.

Photo credit: Minnesota Historical Society

In both cases, success was made possible by an army of lawyers, accountants, organizers, strategists, marketers, policymakers, and protesters.  Civil rights had the Southern Christian Leadership Council, the NAACP, the Nonviolent Student Coordinating Committee, the ACLU, and others;  Obama had the Democratic party machine, his own campaign team, and countless other entities supporting him. Yet the spoken and written word were what gave these movements their raison d'etre.

On Taxes on the Poor & the Rich

Source: 401(K) 2012

The State of State Taxes
President Obama's recent State of the Union speech consisted of a number of proposals and policy ideas, one of which touched on a point of great contention in this country: tax policy.  The left says that the rich don't pay their fair share, and the right argues that the poor get a free ride.  Sure, there's more nuance to the political differences--but not much!  This conflict makes Obama's proposal to "...extend tax credits to the middle class by hiking taxes on wealthier Americans and big banks..." (The Huffington Post) that much more interesting.

Lost in the vitriol about tax breaks and rates are the facts.  That's a shame, because facts happen to be useful when making policy decisions, especially those related to the nation's finances.  Fortunately, a fascinating report by the Institute on Taxation and Economy Policy provides just that information.  Titled Who Pays: A Distributional Analysis of the Tax Systems in All Fifty States, the report "...assesses the fairness of state and local tax systems by measuring the state and local taxes that will be paid in 2015 by different income groups as a share of their incomes."