LA Philanthropy Watch

Post #7 – Scott Harshbarger’s report “An Independent Governance Assessment of ACORN: The Path to Meaningful Reform” poses steep challenges for ACORN.

I have defended ACORN against the untruthful, trumped up attacks of its political enemies.  Many charges the right wing echo chamber has flung at ACORN are scurrilous and unsupported. I have looked at the other side of the ledger – at the good works for which the organization can take credit.

But, while ACORN is not a criminal enterprise and, in fact, has much to be proud of – its failures are not close calls: they are conspicuous, systemic shortcomings that have damaged the organization.  In this post I will comment on challenges posed by the report commissioned by ACORN and conducted by Scott Harshbarger and Amy Crafts.   “With our recommendations in hand, ACORN now has a roadmap for reform.  Our experience tells us that these recommendations, acted on with a sense of urgency, are crucial to reclaim, maintain, and strengthen ACORN’s ability to serve its members and constituents.”  Is ACORN capable of righting itself?  Or to put it another way, is ACORN’s “reform leadership” up to this task?  This is not at all clear.

Proskauer, the law firm of Mr. Harshbarger (former attorney general of the Commonwealth of Massachusetts) and Ms. Crafts, was retained by ACORN to examine the hidden camera controversy, to evaluate management and governance reforms undertaken after the embezzlement was revealed, and to offer recommendations going forward.  (I do not intend to review the report: it is 18 pages long with 39 pages of appendices.  I commend it to any readers interested in learning more about the nature and depth of ACORN’s financial, governance, and management challenges.  It is an easy read – and will convey a sense of the magnitude of ACORN’s problems better than any quotes I feature in this post.)

The report’s findings related to the hidden camera videos are representative: “While some of the advice and counsel given by ACORN employees and volunteers was clearly inappropriate and unprofessional, we did not find a pattern of intentional, illegal conduct by ACORN staff; in fact, there is no evidence that action, illegal or otherwise, was taken by any ACORN employee on behalf of the videographers. Instead, the videos represent the byproduct of ACORN’s longstanding management weaknesses, including a lack of training, a lack of procedures, and a lack of on-site supervision.”

ACORN’s defenders may be tempted to embrace the first sentence as a vindication and the second sentence as a call for a bit of tinkering – adding a training program and writing an employee manual, for instance.  I think this conclusion, in the first instance, suggests that the bar has been set way too low.  In the second instance, I believe (and I am confident that Mr. Harshbarger and Ms. Crafts would agree) that a more fundamental break with the past is required.

Their report (referred to hereafter as the Harshbarger report) makes reference to ACORN’s “reform leadership” – which must navigate the organization’s change in direction – in the statement of the second task:

“Evaluate the management and governance reforms that ACORN’s new leadership (the ‘reform leadership’) has developed since June 2008 …”

The hidden camera controversy came more than a year after revelations of the $950,000 embezzlement and nearly 10-year cover-up.  This failure was not manufactured by ACORN’s political enemies.

After making reference to the hidden camera controversy (“perceived by many as a third strike against ACORN”), the Harshbarger report continues, “It erupted just as ACORN’s reform leadership was about to complete an ambitious and professionally directed organizational and cultural transformation designed to revisit its mission, reshape its scope and charter, and meet squarely its legal, governance and compliance responsibilities.”

I would be remiss not to note evidence that strike one – the theft and concealment – appears to at least one observer, Wendy Kaminer, to have prompted a circling of the wagons, as much as a commitment to reform (“ACORN: A Cautionary Tale” September 24, 2009; see also her “ACORN and the Ethics of Leadership” December 8, 2009, both on the Atlantic’s web pages).

Perhaps a fundamental transformation was in the works, but the committed reformers just hadn’t yet had time to pull it off (as the report asserts).  ACORN’s history suggests why this might be regarded skeptically.

The executive summary continues, “The serious management challenges detailed in our report are the fault of ACORN’s founder and a cadre of leaders, who in their drive for growth, failed to commit the organization to basic appropriate standards of governance and accountability.”

We learn from the report that among the cadre of leaders on board when things went awry, many are still around, “The reform leadership, many of whom also served in the Rathke era, is now reaping what Rathke sowed, in combination from the fallout from their own failure to question or challenge him, and their inability to transform ACORN quickly and completely after taking over.”

The report continues, “There is a general consensus among leaders, organizers, and observers that, under the prior administration, ACORN grew large too quickly, and efforts were not made to grow in a reasonable, cautious manner or with an adequate infrastructure.”  Of course, nothing about ACORN – a tough grassroots group that challenges powerful, entrenched interests – suggests a reasonable, cautious manner.  Amy Schur told to me that political organizers committed to social justice are (unsurprisingly) not much interested in management (or, I would surmise, infrastructure).  The Harshbarger report makes the same point.

The report offers nine recommendations; implementing all of them represents a daunting challenge.  Some of the recommendations play to ACORN’s strengths and all the recommendations, taken singly, appear doable.  But the Harshbarger report urges implementation of every recommendation as part of an interrelated set of imperatives.

Taken as a whole, the recommendations call for a fundamental cultural transformation of the organization – requiring steps that rip against the grain – and quickly.  Mr. Harshbarger and Ms. Crafts emphasize that ACORN’s leaders must pursue reform with a sense of urgency.

Why does reform pose such a formidable challenge? First, because there is so much to do – “governance reforms, senior management reforms, financial reforms, structural reforms, and staff investments.”  Second, because there are so many ways that the reform effort could go wrong.

To follow up with the doubts expressed by Wendy Kaminer about reform leaders who were formerly Wade Rathke loyalists: When there is disagreement among the leadership about how fast to push for change or about whether a proposal is a step too far – what happens?  The old guard – savvy enough to have become the old guard – may have the upper hand.  And organizational inertia will be on their side.

Even with a genuine (and unitary) commitment, bringing about a cultural transformation would be a huge undertaking even for the most skillful, seasoned management team.  Is this the team in place at ACORN?

A cultural transformation – requiring “a significant infusion of professional oversight” and a focus on matters such as human resources, accepted procedures, professional development, staff training, and onsite supervision – will require deliberately shifting resources from neighborhoods with pressing needs to administrative infrastructure. This shift will be as grating to committed political organizers as fingernails scraping across a chalk board.  ACORN chapters – in neighborhoods or even whole states – may need to be shuttered as ACORN strives to develop the professionalism missing among staff and volunteers captured in the undercover videotapes.

Change is hard.  Reform isn’t cost free.  ACORN will lose something significant when it implements reforms.  An organization with “a reduced size and scope” is likely to result.

Even if the reform leadership is consistently committed, up to the task, and willing to follow through with tough decisions, the staff closer to the grassroots may not be on board.  Will reform efforts displace the “smart, capable organizers” the report acknowledges and put trained administrators in their places?  If there is room – and resources – for both, will political organizers stay put as change comes?

Lean and mean may be in ACORN’s DNA.  A charismatic local organizer with a passion for changing things in the neighborhood may be a more credible grassroots leader, than a professional nonprofit manager would be.  And such a leader, focused on social justice rather than on a career path (or on following the rules), may make successful organizing possible – even when resources are scarce.  ACORN’s entrenched “culture of hands off management” may be a powerful attraction as well.

I’m not suggesting that ACORN’s reform leadership will fail – but their climb is a steep one.

Update: This is the final post in this series on ACORN, the national organization.

The first post on the launch of ACCE (with perspective gleaned from an interview with Amy Schur) begins here: The Birth of ACCE: First Post in a New Series.

(Photo of Scott Harshbarger by rappaport center via Flickr.)

Previous posts in this series:

• Sixth post: Just What Can We Say on ACORN’s Behalf?
• Fifth post: The Filmmaker’s Invisible Art – Editing to Tell a Story
• Fourth post: Conservative Activists’ Sting: The Undercover Videos
• Third post: Mickey Mouse Registers to Vote (as a Democrat)
• Second post: Three Strikes – A Mighty Grassroots Group Goes Down Swinging
• First post: California Chapter Splits from ACORN to Form New Group

Post #2 in a series on California ACORN’s transformation into ACCE.

Like many Americans, I knew virtually nothing about ACORN (which was founded in 1970 by a gifted community organizer, Wade Rathke, who led the grassroots organization for nearly four decades as it grew into a powerful force nationally) until a series of controversies came to light in recent years.

The three controversies were: a nearly $1 million embezzlement and cover-up, persistent allegations of voter-fraud in state after state across the country, and secretly recorded videotapes in which a couple posing as a prostitute and a pimp elicited advice from ACORN staffers on illegal activities.

“The hidden camera controversy is perceived by many as a third strike against ACORN on the heels of the disclosure in June 2008 of an embezzlement cover-up, which triggered the firing of ACORN’s founder, and the allegation of voter registration fraud during the 2008 election, done in collaboration with Project Vote.” – Scott Harshbarger, December 2009 report [pdf]

A closer look at these controversies reveals considerable institutional misconduct and negligence on ACORN’s part, as well as trumped up allegations and manufactured outrage by the organization’s political enemies.

In this post, I will relate the basics of the first controversy.  (Two of my sources, which provide much detail, are: ‘Funds Misappropriated at 2 Nonprofit Groups,’ by Stephanie Strom, New York Times, July 9, 2008 and “After an Embezzlement, An Advocacy Group Seeks to Regain Trust,” by Pablo Eisenberg, Chronicle of Philanthropy, October 2, 2008.  In a future post, I intend to look a bit more closely at each of these accounts and at what I learned from Amy Schur, ACCE’s executive director, in my interview with her last week.)

In May 2008, a whistle-blower revealed to ACORN funders that Dale Rathke, Wade Rathke’s brother, had embezzled $948,607.50 from a number of organizations affiliated with ACORN nearly a decade earlier – in 1999 and 2000.  Wade Rathke had arranged an in-house resolution (which appears to be more deferential to his brother’s interests than to ACORN’s) of the wrongdoing and imposed a cover-up.  The theft was carried on the books as a loan, which the Rathke family agreed in writing to pay down at a rate of $30,000 annually – over 31 years’ time – beginning in 2001.  Dale Rathke was retained as an employee of ACORN at an annual salary of $38,000.

Wade Rathke hid this information from the organization’s Board of Directors, though he did advise ACORN’s Management Council (a small group of senior staff members) of the misappropriation and the agreement to make restitution in installments.  When this information came to light in May 2008, the organization finally took steps to increase accountability.

On June 2, 2008, Dale Rathke was removed from the payroll, and Wade Rathke stepped down as the organization’s president (though he continues to serve as chief organizer for an affiliated group, ACORN International).

This was (before May 2008) a case-study of appalling institutional failure.  Senior management demonstrated loyalty and trust, but also a dearth of integrity and judgment, while institutional checks and balances, transparency, and accountability were nowhere to be found.  These missing elements are essential to a responsible, well-managed nonprofit organization.

Strike one.

Tomorrow I will turn to the second controversy, representing strike two.  In a later post, I will look a bit more closely at the organization’s responses to the embezzlement – first when the Management Council learned of the theft and years later when foundations, big donors, and 150 ACORN organizers discovered what had happened.

(Photograph of Albert Pujols courtesy of artolog on Flickr.)

Next post: Mickey Mouse Registers to Vote (as a Democrat)

Initial post in this series: California Chapter Splits from ACORN to Form New Group

On January 13, 2010, a news release / statement from Amy Schur – with the headline, “California Chapter Splits from National ACORN to Form New Group” – announced the formation of the Alliance of Californians for Community Empowerment.

Amy Schur, the new organization’s Executive Director, had been the lead organizer of California ACORN – the Association of Community Organizations for Reform Now – and had spent 21 years working for ACORN in a number of cities, including Chicago, Detroit, Oakland, San Jose and, most recently, Los Angeles.

The news release praised ACORN’s accomplishments on behalf of working families in California and the new leadership of ACORN nationally, but observed that recent controversies that have engulfed the national organization threatened to jeopardize the effectiveness of the group’s grassroots organizing throughout California.

The California group had been a chapter of ACORN, a national organization.  “Until now, governance and financial management resided at the national level. In recent months it has become increasingly clear to the leadership, staff and members in California that the serious challenges ACORN is facing are jeopardizing the important work we are doing here in California.”

While the statement acknowledged missteps by ACORN, there was more emphasis on unfounded, malicious political attacks.  The decision to step away was clearly pragmatic – based on a clear-eyed assessment of how to sustain the level of effectiveness of the group’s community organizing activities throughout California.

“We, the California leadership, staff and members who have been working with ACORN, believe that ACORN, both locally and nationally, has been a tremendous force advancing the interests of low-income and working families in this country. At the same time, very real internal mistakes have been made and vicious politically motivated attacks have led to right-wing activists digging through our trash and editing undercover videos to tell a lie so malicious that, if it were true, would upset any citizen.”
…
“Nevertheless, those of us who have been working with ACORN in California believe that we can’t wait any longer to be in full control over our destiny. The leadership and staff that were working with ACORN in California made the decision to break off from ACORN and launch a new organization here in California called Alliance of Californians for Community Empowerment (ACCE).  The organization will work to advance the mission of organizing and empowering low-income communities, and launch a statewide, multi-year campaign to win key policy changes that will break the cycle of continuous fiscal crisis in the state of California and cuts that hurt ordinary people and their communities.”

I sat down this week with Amy Schur at the Los Angeles office of ACCE (which formerly housed California ACORN) to discuss the launch of the new organization.  The interview focused on a number of issues related to the decision to found ACCE (pronounced like the playing card, ‘ās’).

We discussed the former relationship of California ACORN with the national group, recent ACORN controversies – which Ms. Schur described as “Three strikes,” her career with ACORN, and the challenges she, the staff, and volunteers of the new organization face in establishing ACCE on a firm footing.

Over the next two weeks, I will present a series of posts on the national organization ACORN, including three controversies that have engulfed the group, a brief assessment of ACORN’s accomplishments, and a final post with comments on the independent report commissioned by ACORN.  Then, I will turn again to ACCE, with a second series of posts on the decision to break away from the national organization and a sketch of the challenges going forward with the new group.

(Update: I have revised the paragraph immediately above to reflect the direction the series has taken.)

Next post in a 7-part series on ACORN: Three Strikes: A Mighty Grassroots Group Goes Down Swinging.

Next post in the series on ACCE: The Birth of ACCE: First Post in a New Series.

(Image from Wallpapers-Free.)

“One hundred years after the birth of Saul Alinsky…,” note the authors of a paper presenting a pragmatic overview of fund raising, with a former community organizer in the White House and high-profile political attacks on community organizing groups, “… almost every American has at least heard of community organizing.”

The Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy and Marjorie Fine, director of the Linchpin Campaign (a project of the Center for Community Change) have teamed up to write a paper with tips and strategic perspective on fund raising for community organizers.

“Seizing the Moment: Frank Advice for Community Organizers Who Want to Raise More Money” [pdf] offers basic advice, which will be familiar to experienced fund raisers in the nonprofit community, with reference to the mission and activities of community organizing groups.    The points include a focus on building relationships with donors, prospecting to identify additional donors, communicating clearly – and with examples – the work of the organization, and listening to donors and program officers.

“Listen actively and with focus so that you can build bridges between their interests and yours.

The first time a donor or funder gives your organization money, it is an act of faith upon which trust will be built.”

Along with savvy tips and techniques, the paper includes a list of resources to help organizers raise money.  The NCRP offers free downloads of this and other recent publications.

(Image from Wikimedia Commons.)

LA Voice led a rally and prayer vigil in front of the Blessed Sacrament Catholic Church on Sunset Boulevard on Tuesday in support of health care reform.  Two Members of Congress, Xavier Becerra and Diane Watson, were among the speakers who addressed the crowd.

Much, if not most of the crowd of perhaps 125 was prompted to attend after receiving email alerts from Organizing for America.  Unfortunately, Nazi symbolism, which has become a commonplace of civic engagement in recent weeks, was in evidence (part of what Josh Marshall has called the “nonsense feedback loop” that seems to be driving the public debate at this stage).  Yet even the two followers of Lyndon LaRouche who brought huge signs of Obama-as-Hitler expressed support for health care reform – though they favor a single-payer system.

LA Voice, an interfaith nonprofit, works with 25 member congregations in Boyle Heights/East Los Angeles, Hollywood, South Los Angeles/Mid-City, and Santa Monica/West Los Angeles.  LA Voice is affiliated with the PICO, a national network of faith-based community organizations.

If you are interested in attending a Town Hall or other meeting with your Member of Congress to express your views, ask questions, or just learn what your Representative has to say about health care reform, the website Venice for Change has a list of scheduled events during the August recess.