Category Archives: Nonprofit CEO

Transparency = Trust: The metrics tell the story.

Late last week, we released our operating and financial results for our first half of fiscal year 2016—ending March 31. We publicly present our operating and financial results twice a year—a process I look forward to as it offers us—and every stakeholder, partner, grantor, vendor, consumer, and contractor—a clear picture of our performance. Over 130 people listened to our release last week.types-of-real-estate-loans

I believe that the process of providing operating and fiscal results yields much more than just a dashboard of our work for our constituents to see. The process also yields trust, which is paramount to our ability to create and innovate relevant, sustainable solutions for people with barriers. By openly sharing our financial and operating performance, we create a platform of trust that enables us to expand our collective efforts.

Here are some highlights of the first half of 2016 (October 2015-March 2016):

We served 43,272 individuals through our four practice areas: Economic Development, Workforce Development, Education Services, and Occupational Health—nearly double as the same time last year. Our revenue grew by 44%, driven both by organic and acquisition initiatives. We maintained our program expenses at 88% of our operating expenses, and we expanded our footprint throughout New Hampshire and Maine, Maryland, and Delaware through new contract awards and mergers and acquisitions.

Economic Development accounted for 45.4% of our total first year’s revenues. This practice area includes business service operations that directly employ the populations we serve, the majority of whom have disabilities or other barriers. In the first half of the year, we employed 1500 people in our Total Facilities Management, Manufacturing, Business Solutions, Catering, Security, Home Health Care and Staffing Solutions.

Workforce Development accounted for 34.6% of our revenues and is the practice area where we serve the largest number of individuals. In this area, we placed over 3,700 people in jobs, including 155 ReServists—retired professionals aged 55+ whom we place within organizations to create social impact in the areas of education, health care, and poverty fighting.

Education Services and Occupational Health accounts for 16.5% of our revenue. In these areas, we achieved close to three times the prior year’s revenues due to our combination with Easter Seals New York and our expanded work in the area of substance use disorders and recovery. Our Education and Occupational Health practice areas includes work in behavioral health, assistance for youth transitioning from foster care and vocational rehabilitation for individuals with disabilities. I’m proud to say that over 400 people advanced grade level, graduated from high school, matriculated into college, graduated from college or received a vocational rehabilitation certification through our Career Design School.

I invite you to take a look at our full release on our home page at www.fedcap.org. The metrics matter—they tell the story of our day-to-day work making a difference in thousands of lives and to the power of possible—the mantra we strive to live by every day. I also invite you to evaluate and analyze what you see in our presentation, and I welcome your suggestions, ideas, feedback, and recommendations for any other information you would like to see in the future.

We aim to be on the edge of best practices, to contribute to the highest standard of transparency, and to continually reflect our principles and practices. We count on you as partners to help us achieve the power of possible.

 

 

Solving Substance Abuse Disorder in our Prisons—The Answers Are Out There.

In 2010, six years ago, the National Center on Addiction and Substance Abuse at Columbia University (CASA), a think tank that studies substance abuse and how it affects society, created a 119-page analysis to identify the extent at which substance abuse affects the prison population. The stats are staggering: over 80% of those incarcerated either suffer with substance abuse disorder (SUD) or have a history of substance use problems. In its report, CASA offered a set of concrete recommendations to address this problem—recommendations that would not only serve those currently incarcerated, but that would also alleviate the hemorrhaging of public funds that states consistently complain are being poured into the prison system. The money saved could be rerouted to treatment, both inside the walls and through extended care post-incarceration.

To see the full report, go to: http://www.casacolumbia.org/addiction-research/reports/substance-abuse-prison-system-2010

CASA’s recommendations include:

1)      Use trained healthcare professionals to screen, assess, and treat inmates as they enter the prison system.

2)      Provide treatment for co-occurring physical and mental health and addiction problems

3)      Provide comprehensive pre-release planning and after care coordination to continue treatment services

4)      Expand the use of treatment-based alternatives to jail and prison

5)      Require accreditation for prison-and jail-based programs and providers

Fedcap would add comprehensive work readiness activities to this list—due to the high correlation between employment and well being.  Fedcap believes that work completes treatment—for everyone including those re-entering society.

CASA estimates that the cost to implement their recommendations would be roughly $10,000 per inmate. That seems a high price tag, but not if you consider that if just less than 11% of those receiving treatment stay in recovery, the savings could—in just one year’s time—be close to $100,000 per inmate based on their successful return to society without re-entry into the prison system.

As I wrote last week, some states have begun successful programs that are chipping away at the addiction problem in their prisons. And, they are seeing substantial financial savings.  But there is no overarching, national support of these states’ efforts nor is there a comprehensive system to address the problem from the broadest level.

What is the reluctance to implement programs that would support individuals struggling with addiction and society as a whole?

We need to discuss the reasons behind the reluctance if we are to move to a national solution. What are our biases? What will it take to create a national framework, when, if implemented could change the paradigm not only for individual inmates and their families, but society as a whole?

The prison system is a perfect incubator to try out a national solution. The results of the efforts, are easy to track, monitor, and assess. Changes could be made quickly as part of an iterative and ongoing solution.

What do you think stands in the way of implementing well-researched strategies for addressing the addiction problem in our prisons? Why do you think there is such reluctance? And, what do you think can be done about it?

Why We Must Start Treatment and Work Readiness Inside the Walls: What will make the difference?

Six hundred and fifty-thousand people are released from jails and prisons each year.  The latest statistics suggest that at least 43% of those released will reenter the criminal justice system in some capacity. The criminal justice system costs taxpayers $52 billion dollars a year—and counts as the second highest expense within many state budgets.

Understanding and reducing recidivism is complex, made more so by the fact that each state chooses its own system of measurement—there are no consistent national measures. For example, some states count re-incarceration as a mark of recidivism while other states factor reconvictions, which do not necessarily result in a prison or jail sentence.  For more information on an eight-state recidivism study, go to the June 2014 National Reentry Resource Center white paper at https://www.bja.gov/Publications/CSG-ReducingRecidivism.pdf .

In the past six years, there have been some state successes in reducing recidivism. Those states where the rates have dropped have a key point in common: they employ a comprehensive approach to reforming a system that includes:

1) Working with the incarcerated population as they enter the criminal justice system and alongside them within the prison walls before they are released. We can treat the 55% of men and 73% of women who suffer from mental illness.  We can treat the 30-60% of inmates who struggle with substance use disorder. And we can provide tools to become job ready once individuals are released.

2) Engaging business in readying them to receive newly released inmates into their workforce. We know that in general, previously incarcerated individuals tend to have a high work ethic. Clearly, risk management is involved in this process, but given Fedcap’s experience in working with the court involved and previously incarcerated, the work is doable if all the parties involved work together toward a common, optimistic goal.  Here is a link to a video that describes the journey of a young man involved in our program.

In the weeks to come, I’ll further explore the specifics around addiction, mental illness, and employment among those who are previously incarcerated.

As always, I welcome your comments.

Power of Possible

“Optimism is the faith that leads to achievement.  Nothing can be done without hope and confidence.” –Helen Keller

As I reflect on 2015, I consistently marvel at what can happen when people unite in a common, optimistic purpose. This year, as a result of collaboration among our family of organizations, we helped make it possible for 70,000 people to  change the course of their lives, their work, and ultimately, their legacy, through job placements, educational services, training, a variety of assessments, and behavioral and health services. I am proud of the commitment I witness every day by my colleagues who work alongside our customers. Our staff is dedicated and hardworking, joined in their common vision to improve the lives of those we serve through innovation, creativity, problem-solving and action. I am humbled by the work I witness, done in service to our customers. But even more, I am humbled by the optimism, the faith, the hope, and ultimately, the courage it takes for those we serve to invite change—especially change that will have far-reaching, long-lasting consequences for generations to come.

I have done a lot of research on change theories. I have learned that the majority of people—even those faced with life-threatening illness or danger—do not opt to step away from what is familiar into what feels like dangerous and unknown territory.

What does it take to effect change? Change starts with vision, with hope, and with optimism. It starts with imaging what is possible. For many of our customers, it means stepping away from the constructs of history and stigma to imagine a world where opportunity is equal, where there is a chance for economic independence and where it is possible to change the course of one family’s story.

Change cannot happen without vision, hope and optimism. But it takes sustainable action to truly drive change. Action looks like showing up for class or work day after day, even with transportation or child care issues. It means pushing through the stigma of a past history to create a new future and believing in success. It means trusting someone when trust has been missing before now. It means believing there are choices when the course may have seemed prescribed for generations past.

As I look to 2016, I am ever more optimistic about what all of us can achieve working together. We have plans that reflect our commitment to work that is sustainable, relevant, and which will have the greatest impact on the greatest number of people. The power of possible is boundless. I am excited to share this journey with you. I believe that together, we can imagine—and create—a new paradigm for independence, dignity and joy for many thousands more people. What do you imagine is possible?

 

Minimum Wage Increase: Costs, Benefits and Complexities

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The social and economic implications of raising the minimum wage make it a very complex issue. We know that increased wages enhance educational, housing and nutritional opportunities for families and have a tremendously positive impact on the purchasing power of individuals.

Christine McMahon

Christine McMahon

In general, raising the minimum wage is hard to argue against, yet we need to consider the unintended consequences. Will employers withhold additional dollars for training and education? Will a higher minimum wage raise the qualifications for entry-level jobs? Will this result in a reduction in hiring? We have to ask the right questions and ensure that employers and employees work together to enhance the workplace experience.

In the U.S. general elections held on November 4th voters in four states – Alaska, Arkansas, Nebraska and South Dakota – approved measures to increase the minimum wage. The measures, which will all be fully implemented by January 2017, will affect approximately 420,000 low-wage earners.

In Illinois, voters passed a non-binding referendum to increase the minimum wage to $10/hour, and voters in San Francisco voted to increase the minimum wage to $15/hour, following in the footsteps of Seattle, which last year became the first major city to implement at $15/hour minimum wage. Meanwhile, in October, the Los Angeles City Council approved an ordinance that sets a minimum hourly wage of $15.37 for workers at Los Angeles hotels with at least 125 guest rooms.

These increases have been implemented by voters in bipartisan fashion, across party lines, and appear to signify a new economic reality. While increases in the minimum wage have historically had a small impact on the nation’s economy as a whole, it will be interesting to see the impact of wage increases at city and state levels in the years ahead.

One area that causes me concern is the impact of a higher minimum wage on disadvantaged youth and unskilled workers. Fedcap’s mission is to help people with barriers become economically self-sufficient through training and employment, and to create pathways to economic self-sufficiency. Will a higher minimum wage create yet another barrier for these individuals to enter the workforce and gain the experience and skills they need to advance? That is the complexity that we face as we consider this issue.

Certainly, while it is clear that an increased wage is a first step in rising out of poverty, in and of itself, it is not sufficient. A higher minimum wage will not enable people to own their own home, purchase health insurance or afford a quality education for their children. Education and training have always been and will continue to be the means by which people escape the poverty trap. Whatever the minimum wage may be, we always have to think about the best ways to help people advance in the workplace and build a pathway to economic well-being.

Our 8th Solutions Series was convened to explore these complex questions. I thank you for your participation, and look forward to continuing the conversation.

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What is the purpose of organizational structure?

This is the first in a series of five posts on innovative organizational structuring of nonprofits. 

President & CEO Christine McMahon poses outside of the Nasdaq offices in midtown following closing-bell ringing ceremony in 2011.

People need to understand the purpose of structure and the value that properly designed structure can bring to an organization.

Structure is about a collection of assets that are all contributing to the same goal. Ineffective structure can sometimes be hidden from view because of an emphasis on employees’ places in an organization’s hierarchy. To me, that is not as helpful as understanding your own work in the context of the organization’s goals. Not every structure allows for that. If you have morale problems or people are confused about their roles, you probably have structural issues.

I am convinced that strategy must come before structure, not the other way around. The strategic planning process creates opportunities for dialogue, and to establish culture as a factor in how the organization will ultimately be structured.

When the strategy is clear, you can then create a structure that compels integration and communication across the organization. Leadership’s translation of strategy into tactics is a function of structure. Poorly structured organizations lack communication. If an agency is going to implement strategy, there must be a structure in place that supports the communication of that strategy and the buy in of that strategy. A few years ago we set in motion a strategic plan with robust and optimistic benchmarks. Within that plan we identified the top 20 priorities of our organization and worked hard to ensure that people felt connected to these priorities. The goal was to use our strategic plan as vehicle for engagement with all of our internal and external stakeholders, and to get them invested in our outcomes.

Further, structure can affect leadership’s ability to engage in succession planning. When you have boxy structures that are designed not with goals in mind but rather with laying out how people are organized, you lose the opportunity to identify and cultivate talent. This impedes your ability to accomplish goals and implement strategy.

Christine McMahon has been President & CEO of Fedcap since 2009.