2012

End-of year-lists are the staple of journalists this time of year and how could it be otherwise? It is a point at which we all agree to stand back and take stock: “What just happened?” “What does it mean?” “What is next?”

It is an important moment and we at NPQ are going to try to make real use of this collective pause. We have chosen stories that we feel have traction and meaning for the future, stories that will need our further collective attention. Civil Society’s 10 big stories of 2012 do not stand apart from one another, so forgive us if and when we violate the standard rules of compartmentalized bullets common in these kinds of lists.

1. The Economy: It’s Really Broken

As we go to press, fiscal cliff talks have broken down. We have discussed ad nauseam what this may portend in terms of cuts but we are still watching. Will the Republicans break ranks in a significant way to make something move?

In this country and across Europe, economies continued to try to stabilize but the conversation about what constitutes a just and sustainable economy is still very much in question. Both in the U.S. and Europe, there have been protests in reaction to austerity measures. Occupy laid some base for questioning the entire structure of the economy, noting that “main street” is limping along even as the military industrial complex is paying itself handsomely.

Among the stories NPQ covered were the rising rates of poverty and the wider-than-ever gap between rich and poor. We have also covered the fact that race is still an important determinate of economic health. This is a basic issue of justice and fairness and it may be that we are on the cusp of understanding the work of rebuilding the economy, from a civil sector vantage point, differently. Maybe it is not only about demands made to others but a withdrawal of support from those who violate societal sustainability. We covered stories this year about cash mobs being used to support local small business and about the development of value chains to create business enterprises where the booty is shared more broadly. We believe this is about the commons in the most traditional of senses. All the while, nonprofits have also worked hard to quantify their contributions as economic drivers.

As we end the year, the conversation has turned to the fiscal cliff. The U.S. is apparently trying to address the tax question: should rich people be taxed at a lower rate than the rest of us working stiffs? In some ways, tax policy is only a symbol, but it is an important symbol and a necessary step. But don’t be fooled into thinking that a resolution of the question on tax rates for the rich might by itself create or even signal a fair playing field!

2. Nonprofits and the Election: Dark Money and a Demographic Time Bomb

Virtually no journalist covered the 2012 election without talking incessantly about the nonprofit role—a development that, in and of itself, is unusual. This was, of course, at least partially due to the Supreme Court’s Citizen’s United decision, which sent every political operative in the world scurrying to find “social welfare organizations” through which they could funnel dark money. More “outsider” money was spent on this election than ever before—but much of it to little avail. Luckily, we had nonprofit monitors like the Sunlight Foundation monitoring expenditures.

And then, in the middle of all this ugliness that had been thrust upon us, we saw an extraordinary thing happen. We believe we saw big money get trumped by a big, loose coalition of groups whose memberships were being disrespected by extremists who had been allowed to hijack the tone of the Republican Party narrative. This big, loose coalition was, apparently, the result of a long-heralded demographic time bomb combined with good, strong organizing. There was a lot of organizing among nonprofits dedicated to getting out the vote. Nonprofits that took the time and effort to mobilize constituents to vote, take a moment to give yourselves a hand.

There were several other high profile, nonprofit-centered moments in the election, the attacks on Planned Parenthood and Big Bird (and by association, the Corporation for Public Broadcasting) prime among them. The two organizations in question handled the attacks very differently and probably rightly so. We’ll discuss Planned Parenthood’s work below.

3. Women as Sensei in Political Martial Arts

As the issue of women’s reproductive rights surfaced in election rhetoric this past year, women’s organizations were under attack, but some saw the moment as a political opportunity to be seized. Throughout the year, women were handed gifts of memorable phraseology (for example, “Women know how to shut that process down” and “binders full of women”) that they adopted, like abandoned weapons on a battlefield, and later made good use of. They also made excellent use of their constituent base, which had risen up on previous occasions to declare themselves present and awaiting orders.

Think of the martial arts principle of Kuzushi, which entails the unbalancing and off-centering of your opponent while maintaining your own center and balance. A skilled martial artist knows and uses the power and momentum of an opponent to overcome.

In case you doubted the ability of the civil sector to organize itself for the political scene, here comes a powerful example of success. According to an analysis by the Sunlight Foundation, if you judged political effectiveness by return on investment (ROI), Planned Parenthood Votes and Planned Parenthood Action surpassed all other groups active in more than one election. Planned Parenthood Votes spent a little more than $5 million and achieved a 98.45 percent ROI and Planned Parenthood Action spent almost $7 million and achieved a 98.11 percent success rate. Altogether, Planned Parenthood-related groups spent $15 million, which was more than triple what it spent in 2008.

As a comparison, the largest spender listed in the Sunlight Foundation’s analysis was American Crossroads, Karl Rove’s super PAC, which spent almost $105 million and achieved a 1.29 percent success rate. Crossroads Grassroots Policy Strategies, a nonprofit social welfare organization also affiliated with Rove, is listed as having a success rate of 14.4 percent.

So here is our observation, a lesson from the feet of the sensei: when faced with the gift of an attack, consider quickly how the energy in use by an opponent can be turned to secure a win.

4. National Health Insurance Lives!

The debates over the survival of the Affordable Care Act, which some called “Obamacare,” ended twice this year. First, the Supreme Court defied the expectations of most pundits and refused to rule the law unconstitutional. Then, on November 6th, President Obama’s reelection ensured that there would be no president to call for its repeal come January. That train has left the station, but the implications of the ACA for nonprofits still roil the sector. Nonprofits know exactly where this leads: to a shifting of the burden of health care coverage for families back to the nonprofit sector and its array of health clinics.

In the midst of all of the commotion of the Affordable Care Act, a category of nonprofits—nonprofit hospitals—were questioned for what they do to merit inclusion as a public charity. Others have wondered whether the concept of nonprofit hospitals itself would be deemed unnecessary when the ACA takes full effect. Last year, the nonprofit question was whether nonprofit health insurance cooperatives were an appropriate replacement for the “public option” in health insurance reform, but this year, the question is whether private insurers and the government should be looking at nonprofit models to reduce the cost of health care treatment. Going forward, the implementation of the ACA hinges on a number of current and potential roles for nonprofit providers.

In the year ahead, we’ll find out if nonprofits are simply a holding pen for issues to be worked out on a higher plane—the health insurance exchanges, the roles of cooperatives, nonprofit hospitals’ community benefit—or whether the nation is now recognizing that national health care reform cannot make much headway unless the nonprofit sector is at the table to shape it.

5. Journalism: Mad Change in the Laboratory

The face of journalism continued to change this year, with nonprofit news websites figuring prominently in the ongoing experimentation to find a new enterprise form that will support high-quality journalism. Meanwhile, the IRS was slow to approve the new sites for tax-exempt status based, apparently, on skepticism about the public benefit of the endeavors. In the view of the IRS, media is by default a for-profit venture unless it is aimed at legitimate educational—and not just information—purposes. This block began to ease up towards the middle and end of the year but by then more than one site ran out of time to wait for an approval that would have allowed it to receive grants.

Unfortunately, more journalists were imprisoned around the world in 2012 than in any previous year since the Committee to Protect Journalists began tracking the issue in 1990, and more of those imprisoned published primarily online. Journalists are central to the ability of citizens to take informed action and it is clear that although we have the ability to move information more quickly from more points of direct reporting, we are at risk of losing some of our investigative capacity.

In this situation, readers’ discernment of who can be trusted and who is a credible source counts more than ever. A relatively new concept has begun to more fully emerge in the role of the trusted “curator” who can surface, select and comment upon information for a particular audience. Institutions now play this role at times but in some cases it is played by individuals or a combination of the two.

The morphing of journalism and the proliferation of new models, many set in the nonprofit sector, is a story with much import and long roots and branches.

6. Transparency and Accountability: Problems and Problem-Solvers

The nonprofit sector is home to many of the entities harassing the government and the business sector for the need for transparency and accountability to the public. This domain becomes even more fully ours as journalism moves to be a larger part of our ranks. In fact, there has been some interesting discussion of late about where the work of human rights monitoring groups ends and journalism begins; this points to a natural interdependence that has existed for years in many spheres.

The ways in which transparency and accountability are ensured, however, have changed with the emergence of such Wild West entities as WikiLeaks and Anonymous. Neither organization is new to the scene this year and, in fact, WikiLeaks has been rocked by marginalization and founder problems. Still, there is a message that the sector could and should get about its role in helping us hold accountable the institutions of our lives.

However, in order to be taken seriously as society’s hall monitors, we have to see to our own behavior. Problems with lack of transparency and accountability in the nonprofit sector have abounded this year and, in some cases, constituents have been more than willing and ready to pursue a problem. The Susan G. Komen for the Cure/Planned Parenthood incident, which started in January of 2012, is perhaps a poster child for this.

Challenged for defunding Planned Parenthood for political reasons, Komen had to be backed into the corner of truth by their own constituency, in league with the press. No wide-eyed denials and protestations of do-gooding were sufficient to make the hordes back off. This suggests that nonprofits must think differently about the integrity with which they conduct their work and how the trust factor in their relationships with constituents can either make or break them. It is interesting to consider how the Komen incident may have set the stage for the election ROI enjoyed by Planned Parenthood-related groups.

7. Billionaires, Crowdsourcing, Disintermediation and Other Philanthropic Events

The landscape of funding has become more and more tumultuous over the past year but we might suggest that the theme of disintermediation applies here. The growth of donor advised funds—which do not offer advice on where to give—held by Fidelity, Charles Schwab and others has been nothing short of phenomenal. For instance, Charles Schwab went from contributions of $833,919,344 in Fiscal Year 2008 to $926,437,695 in Fiscal Year 2010; its grants went from $246,876,049 in Fiscal Year 2008 to $422,361,526 in Fiscal Year 2010. In other words, this DAF actually increased its giving during the recession in response to societal need during a recessionary period when many private foundations retrenched.

Meanwhile, all kinds of online sites designed to help individuals make donations or decisions about donations have proliferated; many of them promise to “finally” provide a path for individuals to deploy rational or innovative giving. Crowdfunding is giving people the chance to invest not just in charities and social enterprise but to give directly to individuals. Online fundraising provides ease-of-giving in the wake of tragedy, but the Red Cross launched a study in 2012 to address the issue of donor retention because they have found that online givers do not tend to repeat their giving at levels as high as donors have done in the past when using other processes.

In 2012, foundations, corporations and individual donors have been playing with invitations to the public to engage in philanthropic decision-making through contests while billionaires have been hobnobbing with one another about their strategies for (beneficent) world domination.

8. Education Reform Fever Grips the Nation

Education reform has some school districts in turmoil, caught between teachers’ unions that support traditional public schools and teacher evaluation and school reformers looking to try school “choice” and “privatization”—and de-unionization. The debate spilled over into a discussion of whether public sector workers should have the same kind of collective bargaining rights as employees of private firms, as we saw in Wisconsin and in the Chicago Teachers Union strike.

For nonprofits, school “choice” through charter schools and privatization through vouchers present fundamental challenges. Although parts of public school systems, charter schools are frequently privately operated and managed by nonprofits as well as by some for-profits. Whether charters do better than other public schools was hotly debated in 2012 due to a number of studies that didn’t necessarily demonstrate that charters were achieving results anywhere near the hype generated by charter school promoters. Even charter advocates recognized that a significant number of charter schools should be closed due to poor performance.

This put nonprofits in an awkward political position. The biggest foundation funders all seem to line up behind charters, starting with the Bill & Melinda Gates Foundation, the Broad Foundation and the Walton Family Foundation. If foundations are increasingly, as we have suggested, beginning to exercise substantial influence on public policy (and notably education policy such as the federal government’s “Race to the Top” program), they may be giving signals to nonprofits and government in 2012 that might be financially difficult to resist.

We recently saw the Gates Foundation awarding grants for charter schools in a number of school districts throughout the U.S., with more expected where that came from. Should nonprofits turn down opportunities because they might sense that they would be sledding down a slippery slope toward school privatization? Or, should they take advantage of the opening to promote quality educational experiences even if it antagonizes the teachers’ unions and others who see charters a threat to public education as this nation has long known it? With public schools and public school teachers as the backdrop, the year’s education reform stories compel nonprofits to think about who and what they are.

9. Gay People Are Not Planning on Going Away

There is no doubt that one of the most memorable moments of 2012 was when President Barack Obama moved from an “evolving” position on marriage equality to declare himself an outright supporter. NPQ has to believe that this was merely a dramatic “tipping point”—one of many reached over the past year by a movement that refused to see any particular battle as the war. Same-sex marriage won at the ballot box in three states in November: Maine, Maryland, Washington (and Minnesota voters also refused to enshrine the illegality of same-sex marriage in the state constitution). More organizing lies ahead. Here is another small martial arts thought: “The strength of water lies in its ability to flow around obstacles and in its suppleness. Its force is soft yet powerful.”

10. Changes to the Default Form of Enterprise

“[A] large amount of resources and more individuals in your organization do not necessarily equate to victory over your opponent if you have lost the advantage of formlessness.”


- Kambiz Mostofizadeh, 25 Principles of Martial Arts

Again with the martial arts stuff? Yes, because one of the big behind-the-scenes stories in the sector this year was our realization that old forms of organization need to be questioned as possibly being too static, heavy and/or centrally managed for the times. NPQ has covered this trend in a lot of different ways over this past year. The emergence of an understanding of the power of networks over the force of individual organizations is one of the gains made by the civil sector this year.

We see the understanding of a need to examine organizational form playing out in any number of ways. The excitement of some who have already attached themselves to new forms like the B corp or the LC3 has been taken with a grain of salt here at NPQ, but we’re watching practitioners figure out how to mobilize themselves more effectively and sustainably in a world where the rules and tools have changed significantly over the past generation.

Business models are being addressed all around the sector, from local food banks to the national Council on Foundations. NPQ published a number of stories this year referencing new organizational and business models that are more highly engaged, have fewer fixed costs and are more constituency- and network-based. We love the statement on the F.B. Heron website titled, “The World Has Changed and So Must We.”

This year, NPQ also addressed the intense civil society issues that have occurred around the globe. This was the year of the arrests of members of the Russian punk band Pussy Riot and the Putin crackdown on NGOs receiving foreign money. In Canada, advocacy organizations receiving foreign donations also came under scrutiny. Late in the year, we took a step back to look at those issues.

This has been a year marked by turmoil and sometimes-rancorous partisanship. The year ended in mourning and an apparent standoff on the fiscal cliff. However, there have been moments of breakthrough when it has been possible to see the potential power and influence of the social sector and of a loose but active majority minority coalition. This year, the country cannot be faulted for a lack of engagement and that, in and of itself, is worth celebrating.