Making Non-Profits Work

Gerald Chertavian: Absolutely. In fact, I think the whole movement of social entrepreneurship, which is about applying business principles to the nonprofit sector, it's solving social challenges in innovative ways and perhaps ways that weren't solved before. It's about what we call a tripartite partnership between the nonprofit sector, the private sector and the public sector, which is a new way -- it's a new social contract -- in terms of how we're going to solve social challenges in this country. And that is very different from the '60s and '70s, when government would scale up a nonprofit organization and have the resources to do that. So I think we're really in a paradigm shift as to how we collectively are going to solve social challenges in this country and who has skin in that game. And it's not just the government, it's not just the nonprofit sector and it's not just the private sector. Those three sectors have to work together differently than they have in the past. And I think many of the social entrepreneurs that I know and respect think about solving challenges in ways that really reflect that need to partner with those three legs of that stool.

Question: How do partnerships distinguish your organization from others?

Gerald Chertavian: There's a few ways I think we're very different from other organizations, the first of which is, we focus incessantly on what I call ABC -- attitude, behavior and communication skills. And that we know that employers -- that you hire for skills and you fire for behavior, right, when you think about how the labor force works? So we spend at least half of our time focused very, very clearly on making sure our young adults have the attitudinal, behavioral and communication skills they need to be professionals in the knowledge-based economy. Many training programs and often schools focus on just a skill or a kind of work competency. That's only half the equation. So yes, half of our time will be focused on a technical skill or a financial skill, something that will be kind of bought by the private sector. But half of our time is on ABC -- attitude, behavior and communications. So that's one big difference between ourselves and others.

A second difference is, we are so driven by the needs of our corporate and organizational partners, where -- and if you think about our economic model, you know, we receive contributions from those organizations. If we don't do well, we do not get paid. If we don't get paid, we go out of business. So our economic incentives are wholly aligned with success for our students. If students do well, we stay in business. And let me ask you: how many nonprofits is the payor the same person who's the recipient of the service? And I think that disconnect often means that the person you're providing the service to, you don't have to be beholden to them because they're not the payer. Whereas in our case we have clients; they're called companies. And if they're not happy, we're not in business.

So I think having aligned economic incentives as a general principle -- if one wants think about it in the nonprofit sector as to how do I better align those incentives to make sure that the work we're doing is -- we are rewarded for results, we are rewarded for outcomes, and we're not rewarded for efforts, which many, many organizations are rewarded for trying. Oh, in the private sector it would have been great if someone paid me to try to build software. But we got paid when we actually -- they flicked the switch and the software worked. In the nonprofit sector I think equally we should be held accountable to those standards, where we are paid, remunerated or given money when we actually generate results for those we serve, have proven outcomes, and are not paid just to try to do something. So I think those are kind of two very fundamental things different to us in terms of the ways in which we serve our students and the ways in which we work with our corporate partners and the way we serve them.

Question: What is the most significant barrier to success for low-income youth?

Gerald Chertavian: Well, unfortunately, many of our young adults were born on the wrong side of the opportunity divide. And that's unfortunate, and it's wrong, and it limits their potential. So right now we live in a country where if you were born in the wrong ZIP code, if you had the wrong education system, if your parents had the wrong bank balance, and if you're a person of color, you were born on the wrong side of the opportunity divide in this country. Now you and I both know that those are not good reasons to prevent a young person from being successful. But I can absolutely guarantee, having worked in this for a decade and worked with several thousand young people, is, given the appropriate opportunity, setting very challenging standards, and then supporting people to achieve those standards, that the young adults we serve can literally achieve anything they set their minds to. And I've seen that time and time again. So the barriers are as much about context as they are about anything inherently wrong or challenging in the individual themselves.

So, you know, if you say go a little bit deeper, you know, our young adults don't grow up in neighborhoods where they have role models, so other adults working in our knowledge-based economy, that they can look to. Remember, 20 years ago you could look to someone in an urban community who had a blue collar job who was solidly in the middle class. The number of those jobs has dwindled, as we all know, as our manufacturing sector has shrunk, so that -- do I have the role models of the technician, the technical administrator? Do I have the role models of someone working in a professional services firm or professional firm? So you have a lack of role models. You have, unfortunately, a K-12 educational system where the requirements to graduate are not the requirements to be college and career-ready. So if you want young adults who are college and career-ready, our K-12 system right now does not have that as its standard. So often our young adults are going to public schools whereby even when they graduate they're not prepared to go to college or to earn more than minimum wage. So I think that's one challenge as well.

And I think the third -- if you think of why is this happening -- is our businesses today don't look at the young adults that we serve -- who tend to be low-income, eighteen to twenty-four, ninety-eight percent of color -- they're not looking at those young adults as talent. So when you think about who's talented in this country, and where talent resides in this country, many of our businesses are not looking right within their own communities to those young adults as a source of talent. In fact, on the reverse, many of those organizations and/or individuals may see our young adults as deficits, as liabilities, rather than assets. So you also have some perception changes that really need to go on to enable those young adults to realize the God-given potential that they have.

 Recorded on: October 29, 2009

If the social entrepreneurship movement is going to be successful, an entirely new social contract will need to be forged between the private and public sectors. As the work of Gerald Chertavian demonstrates, these innovative partnerships may eventually solve some of our oldest problems.

Live on Monday: Does the US need one billion people?

What would happen if you tripled the US population? Join Matthew Yglesias and Charles Duhigg at 1pm ET on Monday, September 28.

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