AIG Does It Again

Just when you thought AIG couldn’t sink any lower or act any more despicable, this in yesterday from the New York Post:

Insurance giant AIG is trying to seize a $490 million charitable endowment — and claw back $27 million it already awarded to New York charities — to pay executive bonuses.

The story is a very complicated web of an offshore company called Starr International Co., created to fund bonuses and retirement funds for AIG employees. But Starr also underwrote the Starr International Foundation which are the funds the company now wants back to pay bonuses to employees.

Any story that has AIG and bonuses seems destined to highlight the tone deafness of the company. But there is another story here as well which is the tension that often develops between company founders, Hank Greenberg, who become enamored of their ability to use company stock to create philanthropic entitites, and future managers who may feel less charitable.

Sean Stannard-Stockton writes about a big shift in corporate philanthropy of focusing on the effect of their giving rather than on the package of the gift itself.  Too much corporate giving has focused on looking good rather than doing good. But I don’t think corporations should get stuck on measuring too much. They generally give to ultra image safe programs that are simply good to do; donations to food banks and books for kids and breast cancer research.

But what they do have to think about is being good citizens in their communities. I dispute the notion that the only purpose of companies is to make money. They are important entities in their communities and should model good citizenship as well.  Freddie Mac and Fannie Mae have continued to recognize their great importance as citizens of the DC area through their ongoing, albeit smaller, giving efforts. On the other hand, one of the saddest moment of the economic downturn this year as the closing of the New York Times and Boston Globe Foundation.

AIG continues to show its true colors; green for greed and yellow for deceit.

A Confession: Am I A Charitable Person?

I saw a little paragraph in the sports section today that said, in essence, , ” The players union has discovered that at least 22 teams require players to make donations. . “

The Dodgers signed Manny Ramirez to a $45 million contract and he then donated $1 million to the Dodgers Dream Foundation. At the signinf, the owner of the Dodgers said, “every future Dodger” would make a donation.”

The players union took umbrage at their overpaid players being required to give to causes. I began this post to mock the players union for this stance.  In a time of such great need, with baseball players continuing to make enormous salaries, it doesn’t seem too much to ask that they give back in proportionate amounts.

A publicist friend of mine who worked with a lot of famous actors and athletes would lament that they were often the cheapest givers she knew. They often didn’t follow up on their pledges, skipped out on events and didn’t give nearly as much as they could have if they were generous people.

It was in concert with what I’ve been thinking for weeks now that there don’t seem to be any grown ups left on Wall Street. Isn’t anyone at Goldman Sachs or AIG or whoever else is left concerned about putting the country as a whole back on track — or are they only interested in their own bonuses? None of the smartest guys in the room will take “only” six figures, not the seven they think they deserve, to fix the system that they broke?So, that’s where I started. And then I read a terrific op-ed by Jean Strouse this morning about J.P. Morgan’s contribution to the country in the recession of 1907.

But then I stopped my ranting for a second and remembered to get back to basics. The rants against ball players, starlets and AIG is so very easy to do, it’s coffee shop harangues that really don’t add up to anything but the fact that “those guys” have done us wrong. But isn’t that the same conversation that we had for years about “those guys” meaning the government and politicians that kept getting elected and not listening to us and taking us down the wrong pathways drunk on big, fat campaign contributions?

Finally, last year, with the add of social media, we figured out how to do it differently. We figured out that each one of us could contribute a little time and money, we could each connect to our own social network to create one huge one and elect a president who is trying to do the right thing for the good of the country over the long haul.

Now, we know full well that the corner office doesn’t really exist any more, and we can’t wait for the smartest guys to bail out my local community.  With so many people suffering in the economic downturn, with so many organizations, like symphonies and food banks, facing such hard times, we should be focused on doing what we do best; a lot of people contributing in small ways that adds up to a big difference.

And then I looked in the mirror, not a good idea on a Monday morning, but I looked anyway. Am I doing the best I can for the causes and communities that I care about?  I am on several boards; my synagogue, One Web Day, Hope for Henry.  We give a significant amount of money to our synagogue both in dues and in contributions throughout the year, we have given to Hope for Henry, but not enough, and I have never written a check to One Web Day.

Through many board experiences over the years, I have come to really dislike being on boards. It seemed like the pinnacle of success when I was younger. Sitting around the big boy table and making decisions about where and how to spend money, to generate ideas for the cause, generally being the decider. Then I sat on a few and llearned that nothing much happens on boards except for the repeated request for board members to write a check or ask others to write a check. Most of the major decisions have already been made by paid staff and the chair, the structures don’t allow for real participation by nonboard members in governing issues, and the same problems just keep getting passed from meeting to meeting, year after year. [Note: I don't feel this way about my current boards otherwise I wouldn't still be on them.]

As David Renz has smartly observed, “boards are a structure, governance is a function.” The function has changed, the structure hasn’t.

I use my professional time to encourage others to give and have really enjoyed creating efforts like the GiveList with my friend, Marnie Webb. GiveList was a great opportunity to showcase ways that people can contribute to causes without writing a check. It was fun, it was a great opportunity to try out networked activism mainly through Twitter and it didn’t require any fundraising.

Here’s my confession.  I didn’t actually do anything on the GiveList. I’m beginning to wonder if I’ve been relying too heavily on my work to substitute for making meaningful personal contributions that could positively affect people’s lives in my community.  Perhaps I feel too great a need to separate out what I do professionally; research, write and pontificate on social change using social media, from my personal life before it all feels too much like work. Or maybe I’ve spent too much time evaluating efforts and have developed an vaneer of cynicism that comes from finding out that far fewer programs have as great an affect as we hope they do. Or, maybe, sadly, that’s all just an excuse for not being as charitable as I should be.

The 80:20 rule definitely applies to philanthropic giving and volunteering. It may even be 90:10, meaning that only 10% of us are really doing heavy lifting and 90% are watching. Does my work count as part of the 10%?  Perhaps. But I have the means and know-how to be doing much more than I am right now. I live in a very wealthy county that still has tens of thousands of people hungery and thousnads homeless every day.

I’m going to try to start today to stop spending so much time worrying about what the smartest guys in the room aren’t doing to help the rest of us, and start doing more locally to help one person at a time. I’m going to start by talking to my kids about it over dinner tonight about how we can contribute locally to help people who are less fortunate than we are.  Unless I’m too busy yelling at them for poking one another, or not doing their homework, or using a vulgar work, and in that case I’ll do it tomorrow — but I’m going to do it!

Nonprofit Advice to Business Schools and MBAs

According to this article in the Times yesterday, Business Schools are struggling to figure out what they should be teaching their students to stop producing Gordon Gekkos who are primarily interested in short-term profits.

That’s easy, and I have the answer and am willing to give it to them for free!

They should be teaching their MBAers to act like the best nonprofits and the creative, ingenious peopel who run them. They should be sending out into the business world executives who understand the principles and power of the Connected Age; people like Premal Shah of Kiva.org, Amanda Rose the extraordinary force behind Twestival and charity:water, and Carie Lewis the creative and humble online marketing manager of the Humane Society.

Here’s what these nonprofit visionaries could teach the  MBA class of 2009:

• Open systems can’t be closed again, and that’s a good thing.  Proprietary thinking, closed systems are antithetical to the Connected Age. This is the crux of the struggle of the newspaper industry right now. (Read David Johnson’s outstanding reflection piece on the newspaper industry to learn more.) Being open to people, ideas, information leads to greater opportunities and greater profitability in the long run.
• Learn to manage networks not organizations. Every person, every company is part of an intricate and growing ecosystem of other people and companies. Executives need to learn to manage networks not companies or organizations to be successful.
• Relationships trump brands. We know how to see through advertising and marketing lingo and can decide if a company is really interested in us or not. Successful organizations create open and honest relationships with us. This happens through conversations online and on land, using tools like Meetup, and Twitter.
• Metrics can’t produce good products.  Wall Street became more interested in making money than investing in good products.  You can spin out all of the fancy metrics and powerpoint presentations that you like, at the end of the day companies make products and nonprofits help people and communities.  When we lose focus on those fundamental things; when we’re more interested in short-term profits and pleasing foundations our products and communities suffer.
• The Cluetrain Manifesto should be required reading for every MBA class.
• Governing boards don’t work, if they did we wouldn’t be in this mess. Every major financial institution had a board of directors that rubber stamped bad plans, bad motives, bad operations on the part of senior executives. The boards of AIG, Bear Sterns, Fannie Mae and Freddie Mac let short-term profits trump common sense and sustainability. As David Renz writes, “Governance is a function and a board is a structure.” Many grassroots nonprofit organizations hae a long history of involving their communities in the governance of their organizations — with the long-term well being of their communities in the forefront of their thinking.

Every MBA class should have a visit from one of these winners of the Skoll Awards for Social Entrepreneurship, so should ever company left on Wall Street.

The tide has shifted and nonprofit entrepreneurs and managers have a lot to teach the business world — if they’d listen.  There is an opportunity right now to do something we’ve never done before; reverse the polarity of excellent organizational practices from the for profit sector to the nonprofit sector; and take what we know has worked well to make nonprofit organizations, particularly those with the DNA of the Connected Age, and reinvent American business.