Talk with Affordable Housing Convention – July 14, 2014
Our state’s prescient motto, “Freedom and Unity” sums up the fragile equilibrium between the independent rights accorded to each of us to provide for ourselves and our families and our commitment to a commonweal needed to secure and vitalize the communities we live in.
The motto expresses a difficult balance, one that nationally has tipped dangerously towards the “me and mine” culture – a culture that venerates vast accumulations of wealth and often turns a blind eye to the less fortunate. What does it mean when the fastest growing socio-economic class in America today is the working poor?
Narcissism, consumerism, and corruption have tipped the scales away from our commitment to healthy communities. This is a dangerous trend and threatens not only our long-term well-being, but our survival.
I grew up in the ’50s in Morrisville on the outskirts of Stowe. My stepfather was an instructor in the original Stowe Ski School. Stowe was just becoming a mecca for students and ski bums, and also the well-heeled, who bought up dying hill farms for a song and turned them into seasonal homes. My memories of both Stowe and Morrisville were of vibrant communities where people of differing wealth and aspirations were thrown together by virtue of their mutual dependence in rough weather and tough times. As wealth continued to stratify, that early comradery and mutual dependence eroded. Locals who worked at the Mountain or in the lodges could no longer afford to live in Stowe and the town began to change.
When I was chair of our local Academic Medical Center, Fletcher Allen, I was approached by a board member asking for five minutes in a very tight agenda. I agreed. She was head of the local homeless shelter. She passed out a copy of our local paper, on the front cover of which was a new 40-room house in Stowe built by a captain of industry. It dominated a once-wooded hillside. It was for all practical purposes a pied-a-terre for weekend skiing with friends. The director of the homeless center noted that the house in the news article would accommodate the entire current homeless population of Burlington. Her statement was followed by silence.
That was a decade ago. Nothing has changed except that we have more multi-million dollar homes in Vermont, a larger homeless population, and fewer resources to build low-income housing.
You all have been living through these steep reductions in grants available to ensure affordable housing in your communities. Similar cuts are happening across the social safety net. The economic pressure on our citizens who often work at more than one job and can’t afford the basics of subsistence, is destabilizing our communities, making them fertile ground for the many social and emotional problems like addiction, property crime, or abuse. Our response to date has been to quintuple the number in our prisons in the last forty years, build more economically stratified communities, and too often blame the victim.
The current congressional paralysis and obsession with lowering taxes and deregulating business – supposedly to generate jobs – has not only created today’s deficit, it has further polarized both wealth and politics, failed utterly to generate jobs of value, and pushed social safety net, education, and healthcare expenses down to the states, which themselves are strapped and have less revenue-generating capacity than Washington.
In a state like Vermont with 620,000 people, of whom 330,000 file income taxes and then only about 170,000 of those include a check, the capacity to fund an adequate social safety net, health care and educational delivery systems locally is stretched.
Vermont is thus more like a red state, taking more from Washington than it sends. Our budget is $5B, half of which flows from Washington. This dependence on Washington is an artifact of our very low population, not our politics, which tend to be blue on social and most economic issues.
The poverty rate in Vermont is between 12 and 15%, fairly low for the country. But that’s about 90,000 Vermont men, women, and children. Most agree, however, that the federal measures for poverty are outdated, given escalations in the costs of all basic amenities. They also often miss statistically the working poor or underemployed, of which Vermont may have another 20-30,000.
My former company, Resolution, employed some 275 people at its peak. Fifteen years ago, our entry level jobs paid $10.00 an hour to start, with full personal and partial family healthcare provided. Most job applicants asked first about health care coverage and then about the hourly wage. Our average distribution and call center workers made about $13.00 an hour. We did a personnel survey to understand the impact on our employees of not being able to afford to live where they worked. We knew anecdotally that many drove in each day from Franklin County or other outlying communities where they could afford or share legacy housing with family. Our thought was to lease a van to mitigate the impact of travel costs because we found in the survey that many of our employees spent a third of their net income commuting. As a matter of necessity, they drove old gas guzzlers. There was no convenient public transportation for our shift workers. The geographic spread of their many rural homes and shift hours ruled out a private van service.
And Vermont is no exception to the wealth divide. We have the second highest income tax collection from dividend and interest as opposed to earned income on a capitalized basis in the country. This was part of the data we commissioned when I served on the Blue Ribbon Tax Commission five years ago. As much as we pride ourselves on our progressive socio-economic leadership on many issues, there are two Vermonts. Poet David Budbill refers to “the Vermonters who live on hilltops and those who live in the valleys.” Traditionally, it has been the commercial vitality, cultural adhesion, and often hardship of our small communities that have bound the two Vermonts together to make decisions, attend meetings, and “trade for goods,” as my Morrisville grandmother used to say.
E-commerce and faceless suburban shopping malls have eroded our downtowns. As our downtown employment ebbs, we now confront the appalling scandal of low-compensating, global service-job providers in the malls referring their own employees to federal and state housing and nutrition programs for subsistence. If this is “job creation,” God help us. Is it really our goal as a country to enable the accumulation of vast wealth and power by a tiny minority if what they create are minimum wage jobs with no benefits, especially when our taxpayer-funded safety net must pick up the difference? I struggle with this logic.
Meanwhile, as our communities weaken, education, health care, housing and nutrition programs experience more need rather than less. Weakened communities mean more social services, as neighbors fall prey to addiction, chronic disease, crime obesity and malnutrition (often resident in the same body), failing schools, and homelessness. It has long been understood that prevention and pre-natal care are many time more cost-efficient than treating sick children later on. Is not the same true for our communities?
To ignore this reality is truly live-in-the-moment narcissism at its worst and endangers the great democratic experiment on which we embarked over 200 years ago. “I’ve got mine. It’s up to you to get yours. Don’t ask me for help.”
Staying this course will lead us to social dystopia and chaos. We must re-balance our commitment to freedom and unity, as freedom without unity is anarchy. This means investing in community, believing in well-managed, transparent, and accountable government as a force for good that can enable us to thrive, not a small, elite percentage of us, but the great body of us.
Most of our children come into this life with the capacity to thrive if given the chance. At the moment of birth they need the nurturing of their mother, then family, friends, and finally community to mature and be part of the social and economic fabric. The child who’s homeless, hungry, sick or uneducated generally falls into the debit column and is denied the opportunity to be an asset to us all.
I didn’t come here today to discourage you or cast a pall over this wonderful meeting but my remarks are echoed elsewhere in our nation. The time has come to reimagine who we are and what we value as a society.
I once heard Marian Wright Edelman say to a crowd of young people, that as a civilization, history will judge us by how we treated our children, our elderly, and our infirm and, by today’s measures, history’s judgment will not be kind.
So by way of counterbalance here are some constructive thoughts.
The mission-driven sector (often called the “Non-profit Sector”) has always had to be agile and make do with less. There’s a breaking point, however.
I’ve worked with mission-driven organizations since I was 25, both in the social safety net and cultural areas. When push comes to shove financially, the two most important things a board and staff leadership must do are to revisit their mission and review their governance.
Build a budget, every line item of which supports mission. Mission is the beacon for all budget decisions. Too many mission-driven organizations get seduced into acquiring facilities and technology or expanding into sideline ventures. If it can’t be shown clearly that owning infrastructure, technology or starting a new program significantly enhances delivery on mission, eliminate it. Many organizations unwittingly become long-term stewards of expensive infrastructure that then consumes resources better spent on mission.
Review the integrity and efficacy of your governance and ensure its adherence to best practices. Too many of us look the other way on governance are then shocked when we get into trouble, having missed all early warning signs.
Here are the four worst governance mistakes a board can make: first, not to do a thorough annual or bi-annual performance review of their executive director. This must include feedback from staff and the constituency served. I can almost guarantee that mission organizations that don’t do proper performance reviews will end up in difficulty. Everyone loses, including the ED.
Second, too many executive directors handpick their board members. This makes a joke of board independence. Boards should be self-perpetuating with a nominating and governance committee that proposes new trustees and monitors candidate strength, terms, and board diversity. Often executive directors surround themselves with well-meaning friends they believe will make their job or decisions easier.
Third, trustees don’t always fully understand their responsibilities and liabilities. Boards are ultimately responsible for effective delivery on mission as well as for the financial, ethical, and legal integrity of the organization. It is the board, not the executive director, who will bear the weight of organizational failure and be liable for recourse.
Finally, boards often misunderstand management boundaries. Trustees are not there to run or manage the organization. Their job is to hire, review, compensate and hold the executive director accountable for delivery on mission, good management, and leadership. Trustees also review, challenge, amend, and ultimately approve the budget and annual plan submitted by staff. Planning occurs at the staff level where it will be owned and implemented. It’s then submitted to the board for comment and approval.
There is too much at stake not to follow the rules of good governance. I’ve seen good organizations founder ignoring governance. Besides, a good executive director will always insist on an in-depth performance review and knows intuitively that a strong, independent governing board is his or her best resource in challenging times.
On another topic …how many of you feel the competitive pressure from your peer organizations? Trigger warning… this is a trick question.
If you are competing rather than collaborating in the mission-driven sector, you’re putting your funding and your organization at long-term risk. I’ve spent a lot of time over the years with foundations, government agencies, and private philanthropists. Competition for funding in the mission sector is formidable, but most funding resources see competition in the mission sector for what it is – redundancy.
Your job is not to convince your funding sources that you do it better than your competition, it is to show them how with their help you could collaborate to maximize the mission-efficacy of their grants, to reduce sector redundancy, and to better serve your constituency.
Competition is fine for proponents of free-market capitalism. Ironically, it’s driven consumer prices down to a point where we now must export jobs to third world countries, farmers must produce food below the cost of production, and the service labor force that can’t be exported must be willing to work for wages that don’t support a family – but prices are lower than ever and business profits are soaring. Pardon my irony. I believe in capitalism and started three businesses. But I also believe that like children and citizens, business needs rules and regulations to play by.
Convocations like this enrich our opportunity to learn from one another, share best practices, and find ways to collaborate. Competition has little place in the mission sector and is becoming a lightning rod for funding sources. Focus on what you do well and what you might do better together.
Finally, a sincere note of gratitude for all that you to support community or “unity” as the Vermont motto celebrates. You are on the forefront of building community and we are all very grateful for work you do.
I am happy to take comments, dissents, or questions.