Strings attached: The unfortunate current spirit of charitable giving

We still talk a lot about charitable giving at the Family Partnership. Most social-service agencies do, despite the fact that charities went the way of the garter belt decades ago.

The Partnership came into being at the tail end of the humane movement. Animals were that movement's first priority. Britain led the way, creating the Society for the Prevention of Cruelty to Animals in 1836. John Quincy Adams and Ralph Waldo Emerson were among the founding luminaries in this country. It wasn't until 1877 that children were added to the purview of another "humane" group that called itself the American Humane Society.

In 1878, what became the Partnership was established "to fill a glaring gap in services to children," according to our online history. Minneapolis already had a chapter of the SPCA. This new agency reached out to vulnerable children and their families, first as the Minneapolis Humane Society and then as Family and Children's Service. Its mission hasn't changed. We still serve children and families. No pets.

Our "clients" (also known as "the poor") pay next to nothing for our services, which include counseling, education and advocacy. We recently changed our name from Family and Children's Service for two reasons. One, our clients kept mistaking us for the welfare department. (The irony is that increasingly we are part of the welfare department. The county contracts with us to provide services, as tax cuts have shrunk its own programs to bare bones.)

The second reason is brand identity. We fished around for months for the right combination of words that would build awareness. But even though we now have clients, a business model and a brand, none of these have magically conjured up the private donations required to serve the 32,000 people who annually come to us in desperate need.

That's partly because our mission statement runs counter to the giving goals of today's wealthiest donors, many of whom think charity is wasted on the poor. They want to see evidence-based outcomes. Our CEO's job title reflects the new reality.

The Family Partnership used to rely for most of its funding on the local chapter of the United Way. Originally called the Community Chest and modeled on the powerful Jewish Federation, this umbrella organization was renamed the United Way when it began growing by leaps and bounds in part by expanding its reach (as did the JF) to poor people all over the world.

When the Minneapolis Community Chest/United Way was established in 1915, it provided more than just fundraising support and wise counsel. Its sponsorship assured would-be donors that a member agency was on the up-and-up. Family and Children's Service, a founding member, enjoyed a stellar reputation. We local philanthropists didn't need measurable outcomes to be convinced that we were doing good work.

Unfortunately, by the 1980s, the United Way had its own credibility problem. Its CEO was fired for attempting to defraud the organization of hundreds of thousands of dollars. In the ensuing tumult, the United Way worked furiously to restore its brand to respectability. One spectacularly successful move was partnering with the National Football League, whose advocacy enhanced the reputations of both organizations and helped the United Way's current CEO, Chris Brian Gallagher, secure a seven-figure annual compensation package.

Our local United Way's own online history traces this evolution. The organization stopped making "lump-sum donations" in the aftermath of the 1980s scandal and set out to downsize by focusing on one "specific need." In the 1990s, "donor concerns about accountability" coincided with corporations' concerns about declines in workplace readiness, which some linked to an excessively generous welfare system, prompting the United Way to choose early childhood education as its specific need.

As for its members, organizations like ours, we were forced to add another task to our job description: fundraising. Any nonprofit involved in pre-K can still apply to the United Way, but "[f]or the first time results must be demonstrated in order to receive funding."

A 2007 merger with a nonprofit preschool in north Minneapolis kept us eligible. That's the good news. The bad news is that we not only have to get positive outcomes but prove it. This requires accumulating data, which requires time and expensive technology and expertise.

It was also assumed that anyone willing to work for peanuts to educate 2-, 3- and 4-year-olds was doing the best they could.

In this era of hard-nosed philanthropy, it isn't enough that many of our clients don't have anywhere else to go during the day — or night — which is why giving a child a bus ride to the homeless shelter is a higher priority for us than data-collecting.

It isn't enough that the children we serve face severe emotional and intellectual difficulties. We also have to prove they are "ready for K."

Which we do. That our kids are 88 percent successful is a minor miracle. But donors want to see "return on investment." They insist on knowing how many of our preschoolers finish high school, go on to college and "give back."

Are we tracking them cradle to grave? Well, no. It would bust the budget if we did. And honestly, what difference would it make? Do we have to discover a Rhodes scholar to show that helping people "pays off?"

One of our many PRIDE clients is a former prostitute and drug addict. Today she is clean and working happily as a school bus driver. It would have been better (for us) if she'd launched her own chain of laundromats.

Former General Mills executive Steve Rothschild knows how tough it is build an outcomes-based social-service agency. In 1994, he started Twin Cities RISE! It selects the best and brightest from the swelling rolls of available felons and grooms them for bigger things. A glowing cover story about Rothschild's brainchild was published in 1998 in the magazine of "The Philanthropy Roundtable." Headlined "Better Living through Capitalism," it begins: "Twin Cities RISE! is not your typical nonprofit job training program. While many [such] operations are run by grizzled workers with a professional grudge against free-market capitalism, RISE! is run by a Wharton MBA. … Just so there is no confusing RISE! with the market-haters, Rothschild puts the program's motto, 'A Market-Driven, Job Training Model,' in bold letters at the top of his program's letterhead."

Rothschild promised that each of his felons (mostly African-American males) would be matched with a specific real-world job in a local corporation, thus eliminating the "problem" of cookie-cutter trainees lacking specialized skills. Funds that once went directly to the poor in the form of charity would now flow to corporations in the form of customized workers ready to punch in. Corporations would further benefit by the fact that major local foundations had awarded RISE! large start-up grants.

Rothschild described RISE! as a full-service fixer. "We treat a minor drug problem and a lack of English skills and a dyslexia problem all at the same time," he said in a newspaper interview.

Back in 1998, even Democrats, led by the rightward-leaning Clinton administration, were captivated by the notion that market-driven nonprofits could solve social problems more efficiently than charities could. Rothschild, a Republican, predicted that his model would disrupt the clunky old welfare system even faster than welfare reform could. It would transform poverty-related problems by working "with capitalism instead of against it." He set himself a goal and promised that if he didn't meet it, the laws of the marketplace would put him out of business.

Joe Selvaggio is best known in our community as the founder of Project for Pride in Living, a nationally recognized and widely emulated low-income-housing program. A few years ago, Selvaggio launched a nonprofit called MicroGrants. Rothschild has been a key supporter and consultant. MicroGrants awards seed money for start-ups. Its major donors are large local corporations.

One grantee actually did launch a laundry business. Her story is pretty amazing: For a few months, she ran the business out of her car.

The United Way's single-focus approach seems to have caught on. "We do one thing, but we do it well," sounds good in a grant proposal for the same reason it sounds good in a business plan. Rothschild's "we fix everything" sounds good, too. The convenience and cross-fertilization of old-school charities go unmentioned in our grant proposals as well as the competitions'. So do the cost savings of a full-service charity. So do the convenience and comfort for our clients.

Why? They don't sell.

Making capital available to ambitious people who'd be laughed out of a commercial bank is an excellent idea. But what about those who can't get out of bed in the morning?

The time has come, now that models like Rothschild's have been around awhile, to ask this question: Has helping only those able to thrive in a free-market economy had an ameliorating effect on society as a whole? Have the poor stopped making stupid mistakes? Have they looked to their brothers in the RISE! program for inspiration and shed their learning disabilities, their low IQs, their stress-induced traumas, their self-loathing and depression and just overall loser status and metamorphosed like the stuff inside an egg into full-fledged success stories ready for prime time?

Sadly, these days the least talented among the poor die young, and the most talented apply their entrepreneurial skills in the drug and prostitution trade because money is the only measure of a person's worth. Isn't that the message of return-on-investment philanthropy?

That's why I still believe in charity. It sends a different message: We live in a compassionate community, not a jungle.