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The Future of Nonprofits and the Consultant’s Role: Improving Client Foresight
By
Kenneth W. Harris, Chairman
The Consilience Group, LLC
June 14, 2005
Last month, Tom Busch told the Consortium about the problems of his client, the National Tooling and Machining Association (NTMA), a trade association of small tool and dye makers. It lost at least a third of its members for two reasons. First, it didn’t foresee that, in a global economy, foreign competitors would be able to do the same work as American tool and dye makers at far less cost. Second, it didn’t foresee that, in our knowledge-oriented, service economy, parents would want their children to go to college rather than become apprentice trades people. NTMA did not foresee key changes affecting its future and did not help its members develop strategies for coping with those changes until they had already suffered their consequences!
Nonprofits should build and continuously improve the ability to foresee change-- especially abrupt or discontinuous change-- to avoid dilemmas like NTMA’s. They should do so because the nonprofit worlds of 2010, 2020, 2030 and beyond will be increasingly different from that of today.
Let’s imagine we emerge from a time capsule in 2030, and we have asked a talking encyclopedia computer to bring us up to date on developments in the global nonprofit sector since 2005. Listen to what it is telling us!
Nonprofits are advocating environmental causes even more intensely than in 2005.
• Environmentalists are pressing even harder for governments to regulate more and businesses and citizens to consume less and conserve more.
• Consumption of goods and services continues to cause environmental problems such as global warming, and consumption continues to increase for two reasons. First, there are more people; the world’s population is now over 8 billion compared to 6 billion in 2005. Second, consumption per person is way up because many more people-- particularly in China and India-- have first world lifestyles.
• Environmental groups are still demanding reduced air and water pollution and lower greenhouse gas emissions. In addition, they are fighting for stricter water conservation to ease chronic fresh water shortages and for improved recycling and green manufacturing to reduce the worldwide burden of disposing of massive volumes of discarded consumer goods.
Nonprofits are intensely advocating for and providing more services to the aged, but the mix of causes and services is quite different.
• In 2005, population aging mainly affected Europe and Japan. In 2030, it is a worldwide issue. The biggest differences are the length of life and the length of healthy active life. People are now routinely living past age 100, and some even past 120. The impacts on nonprofits have been huge.
• A combination of extended healthy life spans, reduced pension benefits and insufficient retirement saving has made people want and need to work longer. As a result, nonprofits have for years been fighting age discrimination in the workplace. The age discrimination is in favor of both younger human workers and increasingly intelligent machines.
• Nonprofits are also active in resolving inter-generational conflicts caused by two main factors:
o Competition for jobs among several generations of human workers, and
o Economic needs of younger people who receive less financial help from their elders than they need for a middle-class lifestyle.
• Nonprofits are still helping people cope with the infirmities of old age, but the people suffering these infirmities are now much older, and many more therapies resulting from advances in biotechnology and medicine are available. Nonprofits have fought hard to make these therapies available to all regardless of ability to pay.
• Many more people want to choose the time and means of their demise. Secular nonprofits have been lobbying hard to make it legal for them to do so while faith-based ones have intensely resisted the right-to-die laws that would make this possible.
The role of disease- and-injury-fighting nonprofits has changed dramatically.
• New infectious diseases have arisen as a result of many more people being able to travel anywhere quickly, but international organizations and national governments have used vastly improved information technology to detect disease outbreaks and moved quickly and effectively to control and cure them, much as they did with SARS in the early 21st century. Thus, new foundations to help people afflicted with the new diseases have not been created.
• Many nonprofits that were helping disease and injury victims in the early 2000’s have found new roles as the March of Dimes did after the conquest of Polio.
o One new role is mainstreaming people who have been cured. For example, former spinal cord injury victims are now walking, and nonprofits are helping them find housing and employment. Former Alzheimer’s patients have become mentally competent again, and nonprofits are advocating for restoration of their legal rights.
o Another new role is promoting healthy behaviors such as exercise and eating improved diets. Nonprofits that took up these causes have increasingly focused their work in Asia, Africa and Latin America, as North Americans, Europeans and Japanese gradually heeded the advice of their health authorities to make lifestyle changes. Effectively targeted medical treatments for all addictions are now available, so these nonprofits are helping people addicted to smoking, alcohol, drugs, and gambling receive these treatments as well as waging public information campaigns for more healthful behavior and supporting stricter government regulation of people’s vices.
As a result of several simultaneous trends nonprofits are advocating less for immigrants’ rights and providing less services to immigrants than in the past.
• Immigration to North America and Europe has slowed dramatically for two main reasons:
o The USA, Canada and the European Union tightened enforcement of their immigration laws to stop infiltration of foreign terrorists and to protect their cultural heritage.
o Economic opportunities greatly improved, so Asians, Africans and Latin Americans had far less reason to emigrate.
• After a generation, late 20th and early 21st century immigrants to North America and Western Europe either assimilated or became bi-cultural. Their children consider themselves American, Canadian, French or German and speak their parents’ and grandparents’ languages poorly or not at all.
• The organizations founded by first-generation immigrants to aid their home countries became a more important source of development aid than government-to-government aid and then declined in importance.
• The trend for first- generation immigrants to return to their home countries that began in the late 90’s has grown. The returnees still have better economic circumstances than those who never left and experience resentment as a result. Consequently, some nonprofits are fighting for returnees’ rights.
Nonprofits that fought successfully for women’s rights have become victims of their own success. Women’s leadership in all fields has become routine and not worthy of special note in the press. This is true worldwide. Even in Muslim countries, women’s equality is a fact. Even more important, international law has stamped out rampant sex slavery and abuse of domestic workers that were serious concerns in the late 20th and early 21st centuries.
Education reform has started to decline as a concern of the nonprofit sector. It grew in importance steadily until the 2020’s, but the combined efforts of governments, nonprofits and private enterprise finally resulted in universal literacy and universal continuing education through the Internet. Education reform and the improved status of women have been key to limiting the extent of dire poverty, so often discussed in 2005, to a few areas of Africa.
Nowadays, international organizations and governments are relying on nonprofits as well as military force and law enforcement in the wars on terror and organized crime. Poverty and lack of hope have declined in importance as root causes of crime and conflict, but greed, religious differences and political ideologies remain important. The ease of travel and communication and the availability of weapons have kept crime and terror high on the list of world social concerns. International organizations and governments look beyond violence to nonprofits like the Carter Center and the Southern Poverty Law Center to invent and broker nonviolent solutions.
US nonprofit staffs are markedly different from those of 2005.
• Women now predominate at all levels of nonprofit organizations. Nonprofits have been able to hire large numbers of well-credentialed women because they provide more family-friendly workplaces than corporations and governments.
• Significant numbers of minority males have also found their way into all levels of the nonprofit workplace.
• Nonprofit leadership has become more imaginative and entrepreneurial as the public -spirited Millennial generation takes over.
• Increasingly intelligent machines assume duties formerly carried out by humans.
• With people now working until age 80 and beyond, nonprofits now are forced to rely less on volunteer help from retired people; they have either increased salaries to attract more paid staff or substituted machines for workers as much as possible.
Nonprofits make much better program plans, manage tighter programs, and evaluate them more rigorously in 2030. Their financial supporters—governments, corporations, foundations, and individuals—have many more choices of how to spend their money, so they want to be sure they are “getting the biggest bang for the buck”. Information technology continually improves the donors’ ability to oversee what nonprofits are doing, and they take full advantage of the opportunity.
Nonprofits are relying less for financial support on bequests. Donors prefer to support nonprofits during their lifetimes when they can use information technology to see how their money is being spent. Moreover, because they are living longer and have less or no income from defined benefit pension plans, they have less wealth remaining to donate at death.
Now let’s thank the encyclopedia even though it is anxious to tell us more, get in our time capsule and return to 2005.
What we just heard from the talking encyclopedia of the future is only one view of what could unfold in the nonprofit world over the next quarter century. It is based entirely on trends that are observable today. Others looking at the same trends could have different views. They might also foresee impacts on nonprofits with different missions such as those that promote the arts. What matters is not who is right; what matters is whether we capture the range of plausible contingencies that could affect our clients. All futurists envision a range of scenarios to help their clients prepare for the future no matter what scenario actually unfolds. This is what futurists do when we help our clients build foresight capability. You too can do things to help your clients improve their foresight, even if you are not a futurist. My tips for doing this are in your handout.
Are there any questions!
Preparing America’s Workforce for the Global Marketplace
Unitarian Universalist Fellowship of Fredericksburg, VA.
October 30, 2005
Good morning, I appreciate the opportunity to speak to you here at UUFF this morning, and especially thank Stew Engel and his committee for the invitation.
Whole books have been written on globalization. I highly recommend two recent ones--The World is Flat by Thomas Friedman and Three Billion New Capitalists by Clyde Prestowitz. Today, I will confine myself to just one aspect of this vast subject—how to better prepare America’s workers for this new global marketplace.
Prestowitz says that, while skiing at Lake Tahoe with his son Chummy, Chummy asked if he would co-invest with him in a local snow removal company. Prestowitz then asked Chummy why he would want a career in something as mundane as snow removal. Chummy replied, “Dad, they can’t move the snow to India!”
Chummy was expressing the anxiety of many a 21st century American worker. For most of the last century, we could reasonably think of preparing our workforce for an American marketplace. People could attend high school, technical school or college, get a middle or upper class job, and be rewarded with a gold watch and a pension after a 30-40 year career with the same employer. Foreign competition was weak, and technological change was gradual and usually initiated in America. We cannot restore those more settled times with protectionist trade barriers or any other means. We must prepare our workers to compete in today’s global economy in which foreign competition is strong and getting stronger and technological change is proceeding at breakneck speed.
One very big difference between the task of preparing workers for the primarily American marketplace of the past and the global marketplace of today and tomorrow is that, from now on, preparation requires not only giving our young people a good start but also continually re-training people of all ages, especially older workers. I see six reasons why:
• First, jobs are created and destroyed at a dizzying pace because of fast changing technology.
• Second, employers want and are getting increasing flexibility to hire people only for their immediate needs rather than for lifetime careers.
• Third, traditional retirement is dying. Fewer and fewer employers offer pensions that guarantee a lifetime income based on average salary and years of service. Instead, workers now finance retirement with a combination of tax-advantaged investments and Social Security and must work later in life to retire comfortably.
• Fourth, a variety of factors like student loan debt and the high cost of health care, childcare and elder care are preventing people from saving enough for early, self-financed retirement.
• Fifth, people increasingly don’t want to retire. Medical and public health advances have added years to the healthy part of our lives, and people want to keep working and feeling useful in those added years.
• Sixth, there won’t be enough skilled workers to replace the baby boomer generation if they all retire at the traditional age of 55-65. So employers will need more older workers whether they like it or not.
We have been preparing our workforce for the new global marketplace with shock therapy. The shock therapy is loss of well-paying American jobs to outsourcing, “offshoring”, or automation. “Outsourcing” is contracting with other organizations for work outside an organization’s core competence (e.g., custodial services). Outsourced jobs usually pay less because they are not unionized and are often filled by immigrant workers. “Offshoring” means contracting for work in low-cost, foreign countries. Because of “offshoring”, China has become the world’s manufacturer and India the English-speaking world’s call center. Traditionally, offshored jobs have been those requiring low skill levels, but they now also include higher skill level positions. In fact, any American worker whose output can be digitized as well as those remaining on the factory floor risks losing his or her job to an equally or more skilled, but less well-paid, worker in another country. Automation means replacing human workers with machines. Machines are continually becoming more able to replace humans, and are even more responsible for loss of jobs than outsourcing and offshoring. All too often, those left on the job after each dose of shock therapy adapt as best they can until the next round of job cuts.
This job loss shock therapy has helped our economy, but it has hurt many individuals. It has improved productivity, broadened consumer choice, and helped check inflation, but it has forced workers into lower paying jobs or unemployment, and widened income disparities. The first two principles of our UU faith-- the inherent worth and dignity of every person and justice, equity and compassion in human relations—require us to advocate a much more rational adjustment to this new economic reality.
I propose a four-part strategy to effect this rational adjustment.
Part 1 is to continuously identify the career fields in which Americans have a reasonable chance of finding decent paying, reasonably stable jobs. Friedman divides these jobs into three categories-- special, specialized and anchored. There are very few special jobs. People who have them have exceptional entrepreneurial ability or talent like Sam Walton and Tiger Woods. Anyone who can get a special job has a bright future, so I won’t talk further about them. Specialized jobs are much more numerous and require high levels of skill and training (e.g., intellectual property attorney). Anchored jobs are those, which require some degree of local, human physical effort in America such as plumber, barber or auto mechanic.
In your handout, I have identified ten career fields, which will provide a lot of the specialized jobs of the future. Of these, I believe environmental preservation and restoration is the most important with conversion to a non-petroleum-dependent economy a close second.
I have also identified five career fields likely to provide a lot of anchored jobs. I believe construction and care of the elderly are the most important of these fields.
These career fields won’t guarantee traditional job security. But they are promising because they will require increasing numbers of workers and present great opportunity for innovation. America’s strength has traditionally been its ability to innovate. The next best thing still often is American.
Part 2 of the strategy is to continuously identify the skills needed in the specialized and anchored job fields. Both require, to a continually increasing degree, the written and oral communication skills and basic mathematical and scientific literacy one is supposed to get in elementary and secondary education.
Americans in the specialized jobs need the skills of people in traditional occupations like engineer, scientist, lawyer, accountant, and journalist and knowledge of the substance of the career fields in which they will apply those skills like environmental restoration. They need undergraduate and advanced university education to acquire such skills and knowledge. For example, a young person would be well prepared for today’s and tomorrow’s marketplace if he or she had a BS in environmental science and a law degree or MBA.
Americans in the anchored jobs need the skills common to those job fields, which continually change with new technology and new requirements.
All American specialized and anchored jobholders will also increasingly need uniquely human, non-automatable skills for success. In an article in the current Futurist magazine, Richard Samson calls these “aliveness” skills. They are:
• Discovery
• Creativity
• Implementation skills like planning, organization and persistence
• Positively influencing other people with social skills and
• Using the body and working with things in a range of activities
To these, he adds three enabling skills
• Basic mental skills like perception, classification, and emotional release
• Symbolic thinking and interpretation and
• Responsibility including global consciousness and a religious sense
These human skills are especially necessary to prepare people to innovate—the key to American workers’ success.
Part 3 of the strategy is to assess continually how well we are doing in imparting these skills to American workers. At best, our performance in elementary and secondary education is mediocre. Many students scored below basic level in the latest National Assessment of Educational Progress--in reading, 21% of 4th grade and 32% of 8th grade students and in math 38% in the 4th and 29% in the 8th grade. In comparison to previous years, math scores improved slightly, but reading scores were virtually unchanged. A 2003 report of the Program for International Student Assessment on math performance of 15 year olds showed that students in 20 OECD countries including South Korea, Japan, the Czech Republic, the Slovak Republic and Ireland had better scores than US students, and students in only 5 OECD countries; Greece, Italy, Mexico, Portugal, and Turkey had poorer scores.
I believe implementing the requirements of the No Child Left Behind Act detracts further from any minimal attempts of our schools to impart the non-automatable human skills I just talked about. This new law IS forcing our schools to look hard at the academic achievement of all students. They can no longer declare success because average achievement across good schools and bad and the total student population is acceptable or better. They have to examine the results school-by-school and child-by-child. So they are focusing on improving standardized test scores. No doubt this will eventually improve our children’s knowledge of the basics of reading and math—AN ABSOLUTE NECESSITY, but it is likely to do so at the expense of creating a teach-to-the-test mindset that short changes development of essential skills for innovation.
I also question whether our vocational high schools are producing enough people qualified for work in the anchored jobs, which do not require a college education. A 2004 report to the Ford Foundation entitled Responding In A Turbulent Economy: Creating Roles for Workforce Investment Boards raised concern about the lack of skilled people for those jobs.
In higher education, we do better. Our universities are the world’s best. Jiao Tang University in Shanghai recently ranked 17 American universities in the world’s top 20.
We have traditionally used our fine universities to prepare foreigners to fill critical gaps in our workforce. Foreign students have come for the superior education our colleges and universities offer in the sciences, engineering and business, and they have accepted American jobs upon graduation. Now, two factors are changing this situation. Job opportunities are improving in the rest of the world, particularly India and China, and students studying in America, as well as skilled foreign-born workers already in our workforce, are returning to their home countries in increasing numbers. Second the heightened requirements to gain the necessary entry visas since 9/11 have made foreign students more reluctant to come here in the first place.
Despite the excellence of our universities, we are not producing enough scientists and engineers from our native-born population to fill the gap left by foreigners. Enrollment of US students in science and engineering majors has been flat or declining despite the increase in demand for people with those degrees. One often-cited cause is the lack of qualified science teachers in our high schools. If a student’s high-school preparation in science is poor, he or she will fail science courses in college or not take them at all.
America has an excellent infrastructure for retraining workers desiring or needing career changes. The burgeoning online education industry and community colleges provide many opportunities for working Americans to improve their skills. For example, my local community college, Montgomery College, offers a broad range of courses in its Workforce Development and Continuing Education programs as well as academic subjects.
While we have the infrastructure for continuing education, American employers are not sufficiently accepting of older workers. The Age Discrimination in Employment Act of 1967 provides some protection for workers over 40 in establishments that employ 20 or more workers. However, savvy employers can get around it, and they do. A big reason why they do is the bottom line. Rightly or wrongly they believe older workers cost more. They especially fear paying the cost of older workers’ health benefits. Also, they may feel that older workers are not sufficiently capable technically, even though most baby boomers and many people born before World War II, like me, have long since incorporated computer technology into their work routine.
The final element of the strategy is to take action to implement the first three and to assure that our society meets the identified workforce preparation needs. Here are some essential steps!
• Our schools must teach the basics of reading, math, and science and the human skills essential for innovation in a fast changing world.
• Our schools must prepare every student who wants to attend for college and all the rest with technical skills to get and hold a decent job on graduation.
• Our society must assure that either government or private financial assistance is available for those who need it for college, technical school or job retraining.
• Federal and state governments must accept the reality of an aging population and strengthen age discrimination laws.
• And, workers, particularly those over 50, also must do more, to prepare themselves for the emerging global marketplace, including upgrading job skills at personal expense, if necessary, and working as an independent contractor or in a small business rather than following the traditional path of working for a big company or government agency.
America has been relying on shock therapy—forcing its workers into lower paying jobs or unemployment at great social cost to remain competitive in the global marketplace. We can do better and we must!
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