Companies & Industries

Getting from Giving


A surge in volunteerism and the flow of talent to the nonprofit world reflect our desire for a sense of community and civic pride

'Tis the season for giving. Yet, as Peter Drucker knew so well, the rewards from such actions flow two ways—not just to those in need, but to those who get a lift from making a difference in an all-too-troubled world.

That is why on Christmas day I went over to a church not far from my house to help dish up dinner for the hungry and homeless. Dozens of volunteers from my synagogue and elsewhere passed out about 1,000 plates of food. Many others, of course, will participate in similar activities today—and every day. Volunteering across the nation is at a 30-year high, according to the Corporation for National and Community Service, with 27% of adults donating their time and talent to a wide range of nonprofits. That's up 15% from 1974 and more than 20% from 1989.

What Makes Volunteers Tick

None of this would have surprised Drucker. Although best known for advising top executives from major corporations, the father of modern management counseled numerous social-sector organizations such as the Girl Scouts, forcing them to wrestle with the same fundamental questions that every enterprise—profit or nonprofit—should confront: What is our mission? Who is our customer? What does the customer value? What are our results? What is our plan?

Drucker, like all of us, saw the importance of lending a hand in what he termed "a rapidly changing and turbulent America"—one where, economists estimate, as much as a third of the population doesn't earn enough to cover basic necessities. But as Drucker approached the end of his life, he became convinced that this jump in volunteer participation wasn't being driven by the exigencies of the disadvantaged. "The main reason for this upsurge," he wrote in a workbook for nonprofit managers, published in 1999, "is the search for community, for commitment, and for contribution.

"Again and again when I talk to volunteers, I ask, 'Why are you willing to give all this time when you are already working hard?' Again and again I get the same answer, 'Because here I know what I am doing. Here I contribute. Here I am part of a community.' "

Drucker once had high hopes that people would find such fulfillment and a sense of belonging at their factories and offices. But this ideal, Drucker explained in his 1993 book, Post-Capitalist Society, "never took root." So while most volunteers are, as he observed, "well-educated, affluent, busy" and "enjoy their jobs," they are also yearning for a different sort of outlet that confers "civic pride."

Doing Well While Doing Good

With astonishing swiftness, however, this picture of two distinct arenas—one in which people go to their day jobs and try to do well, the other in which they leave work and try to do good—is getting fuzzy. More and more, as America Online (TWX) founder and philanthropist Steve Case has pointed out, "the lines that divide the business, government, and charitable sectors are blurring."

On the one side, a mounting number of companies are paying attention to the so-called double bottom line: their effect on society as well as to their financial returns. Case's own Revolution Health is a good example. It's a for-profit business that seeks to make money in part by selling Internet advertising. But Revolution Health partners with nonprofits, broadening their visibility and helping them sign up new members and supporters, and the company has a social purpose: to assist people in leading healthier lives by building a "consumer-centric" market for medical and wellness information.

Is much of the talk about the double bottom line (or the triple bottom line, if you also consider environmental impact) pure public-relations hooey? You bet. But does much of it reflect a movement toward a genuinely new approach to business? Absolutely.

Creative Capitalism

"We can make market forces work better for the poor," Microsoft (MSFT) Chairman Bill Gates told a group of Harvard graduates, "if we can develop a more creative capitalism"—one in which it's possible to "make a profit, or at least make a living, serving people who are suffering from the worst inequities."

On the other side, the ranks of nonprofits are exploding. There are now about 1.5 million such organizations in the U.S., up from 1 million or so a decade before, the Urban Institute's National Center for Charitable Statistics reports. With growth has come opportunity—and not just for volunteers. An analysis this year by the Johns Hopkins Center for Civil Society Studies found that between 2002 and 2004, the paid nonprofit workforce grew by more than 5%, while overall employment declined slightly during the same period.

Nonprofits Attract Top Talent

In all, charities employed 9.4 million paid workers, more than those in the utility, wholesale trade, or construction industries. What's more, as the sector expands, it is attracting the best and the brightest. By all accounts, MBAs are increasingly eager to apply their acumen in finance, strategy and marketing not to get rich, but to change the world.

Tom Tierney, the chairman of Bridgespan Group, a nonprofit that provides consulting services to foundations and other nonprofits, noted at a conference recently that his firm saw 110 applications for every entry-level spot it had open this year. Tierney, who used to be the chief executive of the corporate consultancy Bain & Co., stressed that these weren't second-rate candidates. "That talent pool is every bit as good—and I might argue better—than any talent pool Bain & Co. has even seen," Tierney said. "And Bain pays a lot more."

Why would anybody seek out a slimmer paycheck? It's for the very same reason Drucker identified: a deep desire to engage in "the civic responsibility that is the mark of citizenship." Only now, the trend is transcending volunteering and moving to the place that Drucker had always wished it would thrive: the realm of 9 to 5.


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