IN SEARCH OF NOBLE ORGANIZING:

A STUDY IN SOCIAL ENTREPRENEURSHIP

by

ALKA SRIVASTVA

Submitted in partial fulfillment of the requirements

For the degree of Doctor of Philosophy

Dissertation Adviser: Prof. David Cooperrider

Department of Organizational Behavior

CASE WESTERN RESERVE UNIVERSITY

May, 2004 CASE WESTERN RESERVE UNIVERSITY

SCHOOL OF GRADUATE STUDIES

We hereby approve the dissertation of

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candidate for the Ph.D. degree *.

(signed)______(chair of the committee)

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(date) ______

*We also certify that written approval has been obtained for any proprietary material contained therein.

Copyright © 2004 by Alka Srivastva All rights reserved

TABLE OF CONTENTS ...... 1

LIST OF TABLES...... 3

LIST OF FIGURES...... 4

ACKNOWLEDGEMENTS ...... 5

ABSTRACT...... 8

CHAPTER 1 INTRODUCTION ...... 10

Section II Literature Review ...... 15 A Brief History of Entrepreneurial Thought...... 15 What is Entrepreneurship?...... 17 What is Social Entrepreneurship? ...... 20 Areas of Inquiry ...... 23

CHAPTER 2 METHODS AND DATA...... 29

Invitational Participation...... 29

Data Collection ...... 36

Data Analysis...... 39

CHAPTER 3 SOURCES OF DISCOVERY ...... 45

Narrative 1: Shorebank...... 47 Organic Evolution...... 48

Narrative 2: Cooperative Home Care Associates...... 119 Counterintuitive Development...... 120

Narrative 3: Greater Cleveland Community Shares...... 176 Democratizing Philanthropy...... 177

Narrative 4: Triangle Residential Options for Substance Abusers...... 214 Pragmatic Vision ...... 215

CHAPTER 4 RESULTS: METANARRATIVE UNDERSTANDINGS FROM THE FIELD ...... 252

Core Functions and Organizing Processes...... 252

1 Guiding Principles of Social Entrepreneurship...... 253

In-Depth Perspective on the Guiding Principles ...... 256

In Brief...... 280

In Sum...... 281

CHAPTER 5 DISCUSSION: INSIGHTS INTO NOBLE ORGANIZING...... 283

Introducing Propositions for Noble Organizing...... 283

In Summary ...... 301

CHAPTER 6 CONCLUSION...... 304

Noble Organizing...... 304

Contributions to Organizational Theory and/or Practice...... 305

Implications for Further Inquiry...... 307

BIBLIOGRAPHY...... 309

2 List of Tables

TABLE 1 CHARACTERISTICS OF SOCIAL ENTREPRENEURSHIP ORGANIZATIONS (SEO)...... 11

TABLE 2 HISTORICAL OVERVIEW OF THE ROLE OF THE ENTREPRENEUR IN ECONOMIC THEORY ...... 18

TABLE 3 SEO CHARACTERISTICS GENERATING INQUIRY INTO THE FIELD ...... 25

TABLE 4 SALIENT CRITERIA FOR PARTICIPATION IN INQUIRY ...... 30

TABLE 5 ORGANIZATIONAL PARTICIPANTS ...... 32

TABLE 6 INQUIRY PROTOCOL ...... 37

TABLE 7 CORE FUNCTIONS AND ORGANIZING PROCESSES...... 41

TABLE 8 PRESENTATION OF FINDINGS TO PARTICIPANTS FOR CONSENSUAL VALIDATION...... 43

TABLE 9 NARRATIVE COMPARISON OF CORE FUNCTIONS AND ORGANIZING PROCESSES ...... 254

TABLE 10 DEFINING THE GUIDING PRINCIPLES...... 255

TABLE 11 APPROACHING A THEORETICAL UNDERSTANDING OF NOBLE ORGANIZING ...... 256

TABLE 12 PROMINENT VALUES INSTILLED INTO THE ORGANIZATIONAL ETHOS ...... 262

TABLE 13 SUMMARY OF PRINCIPLES, PROPOSITIONS AND THEIR RELATIONSHIP ...... 284

3 List of Figures

FIGURE 1 A SENSEMAKING ILLUSTRATION OF ORGANIZING PROCESSES IN SOCIAL ENTREPRENEURSHIP ORGANIZATIONS 27

FIGURE 2 INTERRELATIONSHIP BETWEEN GUIDING PRINCIPLES 281

4 Acknowledgements

Where to begin- the continued journey that lies ahead began so long ago. This study is a culmination of multiple perspectives and experiences that have enriched my learnings and added to impending experimentations in life to follow. I would like to express my appreciation to colleagues, family and friends for their confidence and support in my pursuit…of just about anything. To my committee, I am grateful to David Cooperrider for his intellectually spirited wisdom and guidance. His passion and enthusiasm for introducing new, bold ideas has given me the courage to forge unknown territory. His genuine, innate capacities for elevating my hopes, dreams and aspirations to unimaginable levels has contributed greatly to my intellectual curiosities. I am also very thankful to David and

Business as an Agent of World Benefit for financial assistance in making this project possible. I am indebted to Ron Fry for his judiciousness in taking me in depth into areas unbeknownst to me. Throughout this doctoral program, his encouragement and fellowship has given me strength. His insightfulness in knowing where I am and forethought in guiding me to where I should be has provided me with an indelible, existential space to rest. I am deeply thankful to Vanessa Druskat who has supported and structured me in ways I never thought possible. Through her friendship, kindness, shrewdness and warmth, I’ve learned the values of living joyfully in a chaordic manner. As a woman, person and academic scholar, she will forever remain an exemplar of humanness. My appreciation to Bob Hisrich for having confidence in me to take me out into the field. By inviting me to participate with him on many consulting projects, not only did I earn some desperately needed income but I was given the opportunity to write and publish case studies, which provided me with a solid foundation for launching into narrative development work. His commitment and devotion

5 to scholarly pursuits at the crossroads of business has fast-forwarded my eagerness to join academic life.

To my family who has contributed to my intellectual, emotional, spiritual and personal development. I am eternally grateful to my parents who have supported every significant endeavor in my life. My father, Suresh Srivastva has bestowed on me a dramatic sense of appreciating and celebrating the other. His wisdom, generosity, integrity and intellectual might has inspired my thinking and shaped my existence. I have learned to think boldly and experiment without fear and I have learned the values of alternative interpretations that seemingly guide my curiosities and discoveries. He has taught me to simplify my life and because of him, I fully appreciate and understand the concept of joy. I am also deeply obliged to my mother whose compassion, strength, willfulness and grace has remained silently in the foreground. Her free-spiritedness and candor has permeated my soul. I would like to thank them both for also contributing to my ‘brain’ fund. For my brother who challenged me to finish this project, there’s no incentive greater than fraternal admiration.

To my husband Eric, who I now consider a saint. He has experienced my manic, explosive fits of glory and confusion during dissertating. I appreciate his encouragement and thoughtfulness in supporting me, feeding me, listening and understanding. Without him, stability would have no meaning.

My gratitude goes out to everyone who contributed their time, knowledge and resources to this study. My appreciation to those scholars and practitioners who helped guide my discoveries and learnings in the field; a special thanks to Greg Dees whose writings and conversations inspired my venturing into social entrepreneurship. It is with great deference that I am obliged to Shorebank, Cooperative Home Care Associates, Greater Cleveland

6 Community Shares and TROSA members who took the time to share their stories and experiences. In particular, my heartfelt appreciation to Mary Houghton, Ron Grzywinski,

Rick Surpin, Peggy Powell, Lana Cowell, James Levin and Kevin McDonald. It is in their sincerity, dedication, heart and soul that makes them such amazing, intelligent, caring and down-to-earth extraordinary, ordinary people.

7

In Search of Noble Organizing: A Study in Social Entrepreneurship

Abstract

by

ALKA SRIVASTVA

This dissertation is an invitation for dialogue and change. It introduces a generative, grounded theory of noble organizing; a dynamic process linking noble intentions and the translation of those intentions into social action through processes that defy traditional norms. This inquiry explores four social entrepreneurship organizations in their commitment to the common good and high purpose of developing human communities. Two for profit companies employ a multi pronged holistic approach to economic community development by 1) using the business of finance and credit to stimulate growth in disinvested areas and 2) providing quality service and care for a constituency that includes its low-income minority workforce, clients and ultimately the industry through public policy advocacy and reform.

Two nonprofit entities cultivate and maintain communities of the highest quality by 1) providing social justice organizations with alternative funding sources to promote community-based advocacy work and 2) serving recovering drug and alcohol abusers by promoting personal development and collective learning. Interviews with strategic persons, published materials and subsequent consensual validation from each of the organizations were used to develop narratives that provide the framework for this study. A discourse analysis of the narratives revealed six universalistic principles characterizing the ethos of social entrepreneurship. Exploration into the Principles of Intentionality, Serendipity,

Values-Led Governance, Unconventional Wisdom, Reinvention and Reverberation offer

8 ways of approaching ideas for developing new directions for organizing in the interest of human beings with the intent to engage persons who desire change for the future and wish to participate in that future by contributing and influencing its own transformation. The term noble is used as a verb qualifier to understand and describe organizing processes that focus on conduct in the service of others and expressed through actions. Through the study of social entrepreneurship, the development of propositions offer insights into noble organizing that provide implications for further inquiry. By promoting the generativity of noble organizing and its concomitant values that support and sustain social entrepreneurship organizations, contributions to the field of positive organizational scholarship, management theory and/or practice could generate a multiplicity of transformations toward a higher moral direction for members in society.

9 CHAPTER 1 INTRODUCTION Idealism is not a sin nor is conformity a reward; creating a dialectic between these competing

values become the contemporary challenge resting at the base of this dissertation. The 21st century has wavered our social consciousness to an undefined level, bringing with it violent acts of terror, corruption and a new daily focus on issues of corporate malfeasance and unethical conduct in organizational life. This, above and beyond the social ills of poverty, environmental degradation and humanitarian unease seem to make up most of the world we live in. So now what? Do we rest on our laurels believing that someday, life will be better or do we become actively engaged in the change process? How can we as citizens of the world contribute to developing the human spirit in light of these challenges, making it joyous for generations to come?

I began this inquiry in search of noble organizing. Describing noble in organizing terms can initially be understood by working with a few basic assumptions. First, the word noble

denotes a high moral quality in character, suggestive of Mahatma Gandhi who aligned

himself with the higher needs of the human spirit in the service of others. Second,

organizations are created for the growth and development of people and third, organizing as

a verb has generative capacities and captures the notion of a dynamic and continuous

coordinated effort involving persons and actions (Weick, 1979). Combining these ideas

evoked interest in a field of inquiry that has a core vision of serving others as a basic

commitment which led to investigating literature on social enterprise. The field of social

entrepreneurship emerged as a subsystem of this discipline and may be considered a

symbolic conduit in understanding the overarching principles of social enterprise endeavors.

However, social entrepreneurship organizing processes extend beyond the traditional scope

10 of social enterprise activities. While many social enterprise organizations serve the needs of society, social entrepreneurship organizations are committed to developing human communities. After discovering its ontological base, I developed a chart modeled after the

Historical Overview of the Role of the Entrepreneur in Economic Theory (Hébert & Link,

1988) identifying social entrepreneurship characteristics (Table 1) that helped stimulate my thinking about these organizations as realities; its creation helped me go beyond the static framework of its epistemology. It is proposed that generative theorizing about noble organizing can most adequately be explored and discovered in this type of environment.

Table 1 Characteristics of Social Entrepreneurship Organizations (SEO) SEO invite members to assume risks associated with uncertainty on behalf of stakeholders in society SEO members are innovative pioneers SEO members supply financial, social and intellectual capital into the enterprise in pursuit of change SEO are a collective of alternative resources SEO members make collective decisions based on societal needs and changes SE ventures are founded in response to society SEO manage their mission through cooperative leadership forms of organizing SE ventures are cooperative entities SEO members are managers of their mission SEO members are organizers and coordinators of a commitment to service in the social sector

The base of this inquiry emanates from the review of literature found in the field of social entrepreneurship. Since the topic of noble organizing is a new phenomenon and because the term noble intimates such a high virtue, we begin with the question of discovering its elements.

The etymology of the term noble has distant relatives in Sanskrit and has evolved into Indo-

European languages with multiple connotations. ‘Noble’ has been in the lexicon connected

11 with an adjective describing a person, situation or act. Nobility as a noun is a derivative of

intergenerational and historical accident. In this study, we are not concerned about using the

term noble as a noun or adjective, rather, we are exploring noble as a verb qualifier for

understanding and describing organizing processes.

The basic doctrine of this dissertation absorbs the meaning of the term as discovered in the

early 13th century pertaining to qualities of having a high moral character (Pickett et al, 2000).

In this inquiry we will focus on conduct in the service of others that are founded on the basis of goodness and expressed through actions. From a historical perspective, philosophers dating back to Sophocles, Plato and Aristotle consider noble actions instrumental to laws of justice and equality. As described by the French philosopher

François Voltaire:

“Men who are occupied in the restoration of health to other men, by the joint exertion of skill and humanity, are above all the great of the earth. They even partake of divinity, since to preserve and renew is almost as noble as to create.”

- Voltaire, 1764 (Andrews et al, 1996).

Later, the German philosopher Friedrich Nietzsche proclaims that a certain quality is essential to becoming a noble person:

“Men inadvertently comport themselves with nobility when they have grown accustomed to wanting nothing from others and always giving to them.”

- Nietzsche, 1878 (Andrews et al, 1996)

The search for noble organizing is a quest to learn about organizational forms that promote a sense of justice and equality for the common good and concurrently provide a guiding philosophy for others to follow. In the narratives we will discover that being noble entails suspending personal interests for the betterment of others without fear or recourse. It is

12 remaining within the confines of due process while intuitively discovering new ways to accomplish long-term positive change for improving the social condition. There is a profound belief that organized actions will lead to prosperity in the service of communities via a core commitment to pursue a vision and pro-actively engage in transformative development. Nobility as a noun is altered. It calls for sharing and disseminating knowledge such that others can learn from and engage in the process of constructing useful and productive systems that are far reaching in purpose. The humility and candor found in nobleness underplays noble acts that ultimately contribute to the paradoxical quality of noble mindedness.

“I long to accomplish a great and noble task, but it is my chief duty to accomplish small tasks as if they were great and noble. The world is moved along, not only by the mighty shoves of its heroes, but also by the aggregate of the tiny pushes of each honest worker.”

–Helen Keller (Washington D.C. Library of Congress, 1989)

Through various different processes, organizing as a course of action brings persons together to fulfill a purpose. How organizing is achieved is of great consequence to an organization’s development and accomplishments. I have chosen the pathway of discovering noble organizing as a process. Processes are a means to an end that becomes an act. A priori, noble processes lead to noble consequences. As Mohandas Gandhi wrote in

Experiments with Truth:

“That service is the noblest which is rendered for its own sake”

- Gandhi, 1948

This study hinges on a continuous commitment to use the simplest meaning of the term noble in the tradition of Gandhi’s thinking and one method of extracting the concept of noble organizing is to pursue his direction. By exploring noble processes in organizations

13 that are explosively in the rubric of servicing the development of others, we will unearth its theoretical base. When noble processes and noble acts co-exist, organizational development takes on a higher level of meaning that benefit its own objectives.

Section II of this introduction presents a brief literature review that will weave concepts of entrepreneurship research from a historical perspective through to our present day knowledge of social entrepreneurship. Areas of inquiry for this study based on the review of literature will be elaborated upon in greater detail. Finally, we will lift the concepts from social entrepreneurship onto a framework for exploring new directions for organizing.

14 Section II Literature Review

Entrepreneurship

The field of entrepreneurship is a well researched discipline yielding many theorists dating as

far back as the 17th century. To date there is no agreed upon theory of entrepreneurship

(Hisrich and Peters, 1998; Ripsas, 1998) yet various economists have attempted to delimit the meaning and composition of the term entrepreneur and processes of entrepreneurship, resulting in varying degrees of definition (Authers, 1998; Thompson, 1999; Van Praag, 1999).

Some classic contributors to the field include Jean-Baptiste Say (1767-1832) in the 18th century, Alfred Marshall (1842-1924) in the 19th century and Joseph Schumpeter (1883-1950) in the 20th century.

More recently, psychological and sociological studies have been incorporated into entrepreneurship research such as those done by McClelland (1961) and Hagen (1962) who attribute social and economic change as well as personality to the study of an archetypal entrepreneur. Casson (1990) employs a cultural approach to understanding entrepreneurship and other contemporary theorists such as Leadbeater and Stevenson have expanded on classic economic thought, extending the concept of entrepreneurship beyond the business sector into the social sector. The next sections will encompass various thoughts on the field of entrepreneurship including defining the term through past research, exploring the concepts of social entrepreneurship and contrasting knowledge learned in the fields of business and social entrepreneurship.

A Brief History of Entrepreneurial Thought

A great deal of information has been written about the field of entrepreneurship.

15 Historically, it was shown that entrepreneurial actions and undertakings were a vehicle to fortify economic activity and promote capitalistic growth. The lack of theory in entrepreneurship research is in part due to disparate perspectives on how and what the economics of a system is doing at any given period in time (Van Praag, 1999). The history of the term dates back to the 1700’s when French economist Richard Cantillon (1931) described the entrepreneurial function as a role to facilitate an exchange of goods at a price to be later sold at an uncertain price, thus operating as a risk-taker. The Industrial

Revolution of the 1800’s brought changes into the market economies that demanded new ways of thinking in order to keep up with rapid industrial development. During this era, new technologies were born by inventors yet financed by capitalists. French economist Jean-

Baptiste Say expanded on Cantillon’s definition of the entrepreneurial function by proclaiming that entrepreneurs created value and were their own managers. He defined an entrepreneur as one who raises their own capital in addition to organizing the production and distribution of goods and services (Say, 1971).

With the growth of small business owners in the mid 1800’s came the advent of middle-level managers and overall organizational development, resulting in an increased division of labor.

Alfred Marshall incorporated this into his interpretation of the meaning, adding that an entrepreneur must have the capabilities to manage with and through other people and must be constantly alert to seek opportunities or innovate in order to minimize costs and make progress (Marshall, 1930). The 1900’s brought modern economics into existence. German economist Joseph Schumpeter heralded the cause for innovation and leadership as critical and necessary components to his economic theory of entrepreneurship, of which he incorporated psychological theory into his defense. The Schumpeterian model identified the

16 entrepreneur as motivated intrinsically and not by profits; he also felt that entrepreneurs were the driving force in economic development. In this vein, he believed it was essential for entrepreneurs to engage in ‘mental freedom’ and emphasized the importance of creativity and dynamism in the economics of any system (Schumpeter, 1934); he felt this would propel the equilibrium of economy onto the next higher level promoting growth and constant renewal. In other words, discontinuity in the economics of a system would propel development in society.

The concept of entrepreneurship in the history of economic thought has taken the individual as the unit of analysis and the role of the entrepreneur has been viewed as a risk-taker, leader, coordinator, manager, innovator and arbitrageur. Table 2 (adopted from Hébert and

Link, 1988) gives an historic overview on the role of the entrepreneur by major theorists in the past 200 years. Twelve main roles of the entrepreneur were identified and thus emerged the Austrian, German and Chicago schools of thought, all of which have contributed to the present day evolution of entrepreneurship theorizing.

What is Entrepreneurship?

‘Managers describe entrepreneurship with such terms as innovative, flexible, dynamic, risk taking, creative, and growth oriented. The popular press, on the other hand, often defines the term as starting and operating new ventures’. -Stevenson and Gumpert, 1985 p. 85

Defining the term entrepreneurship is a challenge, as economists and behaviorists differ in their perspectives and conceptual framework of the term. Economists tend to focus on the nature of the entrepreneurial function and behaviorists center their research on the personality and quality of the entrepreneur (Hamilton and Harper, 1994). Overall, the related epistemology of the term deem entrepreneurial behavior as innovative, creative and

17 Table 2 Historical Overview of the Role of the Entrepreneur in Economic Theory Source: Hébert and Link (1988, p. 152)

The Role of the Entrepreneur Theorists The entrepreneur is the person who Cantillon, Thünen, Mill, Hawley, Knight, Mises, Cole, Shakle assumes the risk associated with uncertainty The entrepreneur is the person who Smith, Turgot, Böhm-Bawerk, Pigou, Mises supplies financial capital The entrepreneur is an innovator Baudeau, Bentham, Thünen, Schmoller, Sombart, Weber, Schumpeter The entrepreneur is a decision Cantillon, Menger, Marschall, Wieser, Amasa Walker, Francis maker Walker, Keynes, Mises, Shakle, Cole, Schultz The entrepreneur is an industrial Say, Sain-Simon, Amasa Walker, Francis Walker, Marshall, leader Wieser, Sombart, Weber, Schumpeter The entrepreneur is a manager or Say, Mill, Marshall, Menger superintendent The entrepreneur is an organizer Say, Walras, Wieser, Schmoller, Sombart, Weber, Clark, and coordinator of economic Davenport, Schumpeter, Coase resources The entrepreneur is the owner of an Quesnay, Wieser, Pigou, Hawley enterprise The entrepreneur is an employer of Amasa Walker, Francis Walker, Wieser, Keynes factors of production The entrepreneur is a contractor Bentham The entrepreneur is an arbitrageur Cantillon, Walras, Kirzner The entrepreneur is an allocator of Cantillon, Kirzner, Schultz resources among alternative uses

risk-taking coupled with defined objectives for turning profits and growth (Leavitt, 1989;

McDaniel, 2000;Osborne, 1995). Some economists view entrepreneurship as a process to join intellectual and financial resources, materials and labor into a mix that creates added- value and achieves a high return on invested capital for the individual entrepreneur (Peters and Waterman, 1982). Others view the concept of entrepreneurship as a process for creating a new enterprise or something new of value for both the creator and the consumer

(Fuller, 2000; Low and MacMillan, 1988). According to Hisrich and Peters (1998), the process of entrepreneurship involves four distinct principles including the creation of new value, dedication of time and effort, risk bearing assumptions and personal rewards that

18 include independence, personal satisfaction and at times, financial gains. In this context, the self becomes the reference point and the mission becomes either personal success or wealth creation.

Modern management philosophies have integrated human behavior and incorporated social sciences into its definition and research of entrepreneurship. In viewing the supply of entrepreneurship as opposed to function, McClelland (1961) analyzed psychological factors into the personality type. He focused on motivational variables that drove entrepreneurial thought and deduced that entrepreneurs were a creative breed and their psychic needs for achievement were more significant than making profits. Hagen built on McClelland’s ideas by adding social elements and societal influx into the equation. He found that certain psychological changes resulted from social changes (Hagen, 1962); the supply of entrepreneurship was related to both group subordination and social blockage. In other words, becoming alienated from society produced the need to assert oneself through enterprise.

According to Thompson, Alvy and Lees (2000), entrepreneurship is a combination of vision, leadership and desire to build a sustainable entity. Parston and Casson emphasize the cooperative as opposed to individualistic elements of entrepreneurship. Parston (1998) defines the process of entrepreneurship as managerial behavior that invariably exploits opportunities to produce results beyond one’s own capabilities. In other words, enterprising persons rather than the entrepreneur are considered active agents of change. Casson (1990) has brought sociological and cultural factors into the field of entrepreneurship. He views culture as a primary determinant for entrepreneurship behavior. One aspect of his research

19 has shown that entrepreneurship behavior is interdependent with society. Norms begin to function as an act of inclusion; the moral fibers of society legitimize business behavior thus motivating entrepreneurs to respect the legal processes and norms in a society setting. In turn, a shared understanding emerges generating honor and mutual respect. Cooperative and supportive reciprocity ensues which in turn generates transactional efficiency. “…Some moral attitudes are far more entrepreneurial than others, and so are more conducive to the process of economic development” (Casson, 1990, p.92). This may be considered the point of departure for entering the world of social entrepreneurship.

What is Social Entrepreneurship?

Gregory Dees builds on the concepts of earlier theorists in describing social entrepreneurship:

“The following definition combines an emphasis on discipline and accountability with the notions of value creation taken from Say, innovation and change agents from Schumpeter, pursuit of opportunity from Drucker and resourcefulness from Stevenson. In brief, this definition can be stated as follows: Social entrepreneurs play the role of change agents in the social sector, by: adopting a mission to create and sustain social value (not just private value), recognizing and relentlessly pursuing new opportunities to serve that mission, engaging in a process of continuous innovation, adaptation, and learning, acting boldly without being limited by resources currently in hand, and exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created”

(Dees, 1998 p.1)

The history of the concept pre-dates the history of the term. Social mission-based organizations founded by persons such as Florence Nightingale (founder of modern nursing) and Vinoba Bhave (spiritual advisor to Mahatma Gandhi and founder of the Land Gift

Movement in India) amongst other movements and organizational creations are examples of what is today, the present day language used to describe social entrepreneurship ventures.

Social entrepreneurship as a subsystem of social enterprise is a relatively new field; it has

20 made its foray into the field of management and behavioral sciences in the past twenty years.

According to Gregory Dees (1998) the name given to the field is in itself important; the boundaries of entrepreneuring in the business and social sectors have become less polarized

(Penrice, 2001). Capitalizing on opportunity and innovation in the non-profit or social sector is integral to society’s development (Drucker,1985).

The realm of social entrepreneurship can be considered an interdisciplinary synthesis blending the fields of entrepreneurship, social change, social responsibility and venture philanthropy. Various ideas have been used to describe the field yet an overarching definition for purposes of this dissertation incorporate fundamental concepts as described by the Center for Entrepreneurial Studies at Stanford Graduate School of Business and the

Social Entrepreneurs Network(2002):

Social entrepreneurship invites its members to ‘…take innovative approaches to solving social issues, using traditional business skills to create social rather than private value.

Included with this definition are:

♦ For-profit organizations that use their resources to creatively address social issues ♦ Nonprofit organizations that assist individuals in launching their own small, for- profit businesses, referred to as micro-enterprise or self employment ♦ Nonprofit ventures that create economic value to fund their own programs or create employment and training opportunities for their client population’. Source: Stanford Graduate School of Business web page (1998, p. 1)

Social entrepreneurs are highly practical and courageous, creative designers that invent strategic means of approaching the social sector to effect positive change and transformation in society. They break new ground in pursuing visions and championing change and have been described as pathbreakers, pioneers, activists and innovators (Bornstein, 1998;

21 Brinckerhoff, 2000; The National Center for Social Entrepreneurs, 1998). Social entrepreneurship engages its members in the social sector building sustainable enterprise into the framework of society. The quest for new and innovative solutions to social problems becomes paramount; the intent is related to making and sustaining social contributions, building social capital and producing social profit to improve and transform the quality of life on a local, national and global level. In essence, social entrepreneurship organizations are born to make a positive social impact in human communities by creating alternatives to the existing system. This transformative process begins by first identifying the issues, creating a vision that will improve the social condition, putting an organization together in hopes of changing the system, collectively spreading alternative approaches and then transforming intentions into action by engaging members of society toward collectively pursuing positive social change (Ashoka Foundation, Web page; Thompson et al., 2000).

The fields of social responsibility and venture philanthropy are near relatives to social entrepreneurship and social purpose ventures. Society becomes the reference point in the process of change involved in each of these closely related fields. They represent alternative ways of transferring resources from the wealthy to the disadvantaged, promoting dialogue and action to engage people in either investing their finances, intellectual resources and social capital in contributing to societal development (Visagie et al., 1998). [Social capital in this capacity, as defined by Fukuyama (1995): the abilities of people to work together towards a common purpose in organizational life]. The locus of control is internal and the dependency on government funding becomes mute (Colin, 2001). Members in and around the organization collectively work towards transformation; the interplay among initiatives and business acumen become integrated with personal values in accordance with the

22 organizational mission and visions for change in society. Persons take a proactive role in prescribing business practices and techniques including mobilizing capital, forming partnerships, taking risks, strategic thinking and goal driven orientation to begin a new venture in hopes of promoting long-term systemic change. The underlying connection supporting the kinship of these areas is the discipline itself that involves a collaborative process of designing and implementing solutions to social problems (Smale et al. 2000), the process of organizing coupled with the contribution of others.

Areas of Inquiry

It is apparent that social entrepreneurship organizations need to become a primary setting for further knowledge creation due to their increased importance in contributing to societal advancement; they have a cumulative impact on our future in benefiting society as established by many organizations around the world. We need more inquiry based on the creation of innovative organizations with a social purpose; to date, there is very little information available in the field of social enterprise. If we study the processes of creating social change organizations from an organizational design perspective, we may gain insight into the development of new organizational forms which have at its base visions, underlying ideologies and values.

As an emerging field, there is not much written on the co-creative aspects of social entrepreneurship ventures nor are there large sample studies available concerning cooperative leadership behavior; this may lead to discovering new forms of organizing that can be used for generalizing or comparison. An unknown area of inquiry is the study of social entrepreneurship members, management and processes. Who are they? How do they co-create? What forms of cooperative leadership do they employ? How do they organize?

23 This dissertation will be an exploration in the genesis, development and transformation of social entrepreneurship organizations that exist for the common good. By discovering how they are constructed and learning what consequences they have on their members and the populations they serve, we will contribute to organizational scholarship in hopes of reaching new understandings and new forms of organizing that benefit human development. We anticipate discovering how they transform, create and respond to the environmental press rather than simply adapt. Based on the review of literature, the basis of this dissertation assumes that social entrepreneurship organizations are isomorphic with social change; as the context in society changes, the content transforms based on societal needs and new ways of approaching acts of service are created. These types of organizations are capable of creating an environment that promotes societal good while simultaneously remaining adaptive to societal transformation in order to survive and remain self-sufficient.

Four social entrepreneurship organizations participate in the development of this study providing us with a descriptive and explanatory lens to learn about organizing processes that mirror organizational realities. We anticipate fresh knowledge creation through and with these organizations that will guide society toward learning and developing new concepts of organizing with the intent on making a positive impact in human communities.

The foundations of inquiry originated from my own sense-making process in learning about the characteristics of social entrepreneurship organizations as realities which enabled me to go beyond the static framework of what currently exists in the literature. Table 3 highlights these characteristics and curiosities generating inquiry into the field.

24

Table 3 SEO Characteristics Generating Inquiry into the Field

SEO Characteristics Inquiry into the Field

SEO invite members to assume risks associated How are these acts and ideas promoted? with uncertainty on behalf of stakeholders in society How is membership generated? Why become involved? ______SEO members are innovative pioneers What are the sources of innovation? What types of people become involved? ______SEO members supply financial, social and intellectual How do organizations pool their resources? capital into the enterprise in pursuit of change How do members get on the same page? ______SEO are a collective of alternative resources What resources are required? How are these resources allocated? ______SEO members make collective decisions based How does society influence the organization? on societal needs and changes How does the organization evolve to meet these needs? ______SE ventures are founded in response to society Are there precipitating factors involved in making the decision to become involved? What strategies are involved? ______SEO manage their mission through cooperative What are the leadership values? leadership forms of organizing How do members work together? ______SE ventures are cooperative entities How is this accomplished? How do they organize? ______SEO members are managers of their mission How are responsibilities shared? How do they manage their mission? ______SEO members are organizers and coordinators How does the coordination of efforts impact of a commitment to service in the social sector the commitment to society? What are the values driving this commitment?

Understanding and developing the values and meaning of social entrepreneurship will demonstrate the role organizations can play in improving pieces of society through mission based mantras and commitments to the renewal of societal development. We will gain insight into how the intersection and side effects of social purpose organizations and the business sector can benefit one other; valuing mission and profit help generate improvements in society fueling an organization’s commitment to making profits. The

25 following areas of investigation will provide a foundation for exploring and learning about social entrepreneurship.

1. What are the fundamental values of members and what do they value in the organization that help them implement their vision?

2. How do social purpose ideologies and values forge an organization’s design and creation?

3. How do members organize and mobilize their actions leading to social acts and consequences?

4. How does the evolution of a social purpose affect the fluidity of an organization’s capacity to remain adaptive and innovative in response to society in order to continue promoting long-term systemic change?

5. What are the generative capacities of social entrepreneurship organizations and how do they act as a catalyst for others to create and respond?

Organizations have an extraordinary capacity to positively effect individual, societal and global change. Methods of organizing in accomplishing this task vary in size, scope and complexity dependent on actors within the context of the environment. Virtuous and utopian forms of leaders, individuals, organizations and organizing (Cameron, 2003; Collins,

2000; Mannheim, 1936; Meara, 2001;) have been proposed to create and achieve a moral and ethical society through organizational behavior, structures and politics. The purpose of this dissertation is to add to the discussion and break new ground in putting forth a fresh, humanistic concept of organizing that promotes new systemic long-term arrangements in society through economics, policy and justice. We will explore the emerging field of social entrepreneurship as a framework for discovering the transformative nature of organizational forms and its significance in contributing to ongoing positive societal advancement. An attempt will be made to understand and develop the generative capacities and values of social entrepreneurship in hopes of creating dialogue and social action.

26 Remaining faithful to grounded theory principles, simultaneity in making meaning of social entrepreneurship characteristics generated inquiry into the field that paralleled my exploration of organizing processes. I developed a pathway representing organizing processes relative to the creation, development and transformation of a social entrepreneurship organization’s efforts to achieve positive change (Figure 1). Further exploration into the concepts of social entrepreneurship will support unearthing new directions for organizing around a noble purpose.

Figure 1 A Sensemaking Illustration of Organizing Processes in Social Entrepreneurship Organizations

Social Entrepreneurship Characteristics

Creativity Innovative Passion Driven Visionary GENESIS Committed Resourceful (Create) Courageous Risk Taker

- Development of a common vision - Attaining membership - Pooling Resources GENERATIVE CAPACITIES - Leadership - New organizations emerge - Advancement of long-term objectives for society’s well being DEVELOPMENT (Sustain) POSITIVE - Fulfilling a purpose SOCIAL - Actions leading to consequences CHANGE - Organizational learning - Strategy and accountability REORGANIZING

- Adaptive in response to societal needs TRANSFORMATION - New ways of approaching acts of (Renew) service are created

- Organizational impact on society - Evolution of the social purpose - Co-creative response of members - Societal influences on its members

Chapter 2 presents a methods and data section. Preliminary inquiry issues on the selection process and criteria for identifying organizations that have co-joined in this study will be addressed. The data collection section will outline methods for collecting and obtaining organizational information and data that become the basis for developing narratives. In the

27 data analysis section, the process of constructing and deconstructing the complete collection of materials through grounded theory building will be expanded upon.

Chapter 3 presents the Sources of Discovery, an anthology of four narratives that provide the framework of this dissertation. Chapter 4 contains a results section that describes meta- narrative understandings from the field. This segment analyzes the sources of discovery section and presents an overview of its findings on social entrepreneurship. Chapter 5 presents a discussion on insights for noble organizing derived from the results chapter.

Propositions are put forth based on discoveries from the narratives in conjunction with organizational theory. Chapter 6 concludes the dissertation and incorporates a summary of findings, contributions to the field and implications for further inquiry and research.

28 CHAPTER 2 METHODS AND DATA

As stated in the previous chapter, because so little interdisciplinary research has been done at the intersection of social enterprise management and organizational sciences, we need to conduct an in depth analysis of the preliminary issues under study. Discovering the appropriate framework for noble organizing entailed searching for the ‘ideal type’ and utilizing a qualitative inductive method through organizational inquiry was considered the most viable strategy. Adopting a grounded theory approach facilitated the preliminary inquiry issues, data collection and conceptual framework to proceed and evolve simultaneously (Glaser and Strauss, 1967) yielding a substantive theory that remains faithful to the area under study. The subsequent development of narratives to illustrate organizational historicity and living phenomenon provides a descriptive and explanatory lens to investigate the context of social settings that mirror organizational realities. The advantages of this approach implore theoretical variation of the concept broadening a theory’s applicability to different instances in any given organization (Strauss and Corbin,

1997).

Invitational Participation Organizational Participants Exploring literature on social entrepreneurship led to familiarity with leading academics, practitioners and institutions knowledgeable and actively involved in the field under study.

In order to gain a comprehensive perspective of organizations that would serve as good candidates for this dissertation, an international panel of scholars and thinkers in the field of social entrepreneurship were identified and invited to contribute to a selection process by nominating global organizations based on tentative criteria (Table 4). Emphasizing the organizing process rather than results, the criterion focused on characteristics

29 Table 4 Salient Criteria for Participation in Inquiry 1. Does the organization rely on its own private funding? A true social entrepreneurship organization is creative in finding the right sources of funding to begin the venture, ultimately moving towards self-sufficiency through its members’ own activities, generosity and capital. The organization must rely on the spirit of its mission through its own self- generating resources, rather than relying completely on government funding or individual donations. The ultimate objective is to become self-sustaining.

2. Is the transforming mission of the organization around the needs of society, and is it dedicated toward a commitment to the service of others?

3. Does this organization articulate a very noble social purpose that advance long term objectives for society’s well being?

4. Is there a high probability that the organization’s work will reverberate across generations? Will the impact be so strong as to become a catalyst for newer and more organizations like it to sprout?

5. Does the organization show a tendency towards transformation in a higher moral direction for society?

of social entrepreneurship organizations as defined by the inquirer, including funding and resources, the transforming mission around the needs of society, a commitment to service that advance long-term objectives for society’s well being and the generativity of an organization in the probability that its efforts will reverberate across generations and simultaneously act as a catalyst for newer organizations to form. The organizations can be multi-organizational, for profit and nonprofit alike and should be in existence for at least five years such that the infrastructure has been developed facilitating a detailed exploration of its organizing processes.

More than forty global organizations involved in multiple activities covering various sectors of education, human rights, health care, rural development and micro enterprise development were nominated by the eighteen-member panel (consisting of eight academicians and ten practitioners), including twenty-nine organizations based in the U.S.

30 In order remain in-depth in size and scope and due to budgetary and time constraints, it was suggested by my professors to engage four U.S. based organizations involved in four different kinds of core tasks and activities.

Twenty-three organizations were contacted by telephone and discussions held with founders from each organization to learn more about its organizing processes and share information about the study. Twelve organizations fulfilled the tentative criteria and five organizations were willing, available and agreed to participate. By invitational co-participation, four organizations representing a variety of experiences and differences in their core task, function and mission were selected as participants and contributed their intellectual resources and time to this study, including various members from Shorebank Corporation,

Cooperative Home Care Associates, Greater Cleveland Community Shares and Triangle

Residential Options for Substance Abusers. Each organization participating in this study is captured at a glance in Table 5: i-iv. The organizational purpose, revenues, number of employees, organizational affiliates, structure and persons interviewed and their titles are described. Various miscellaneous pieces of information are also included that remain unique to each organization.

31 Table 5 Organizational Participants Table 5i. Shorebank Organization Shorebank Corporation Financial holding company established 1973

Purpose Empowering people in disinvested communities by using financial resources to create lasting economic and environmental change

Type of Organization For profit entity

Revenues $1.3 billion (2002)

Number of Employees 500+ in the US

Organizational Affiliates ShoreBank Chicago established 1973 - nonprofit affiliate established 1978

Shorebank Advisory Services established 1987

Shorebank BIDCO established 1992 - nonprofit (affiliated with Shorebank BIDCO) established 1985

ShoreBank Cleveland established 1994 - nonprofit affiliate established 1994

ShoreBank Pacific established 1997 - nonprofit affiliate established 1994

ShoreBank Detroit established 1998 - nonprofit affiliate established 1996

Persons Interviewed/Titles

Anne Arvia President, ShoreBank Chicago Leana Flowers Senior Vice President, Human Resources, Shorebank Corporation Ron Grzywinski Chairman, Shorebank Corporation Mary Houghton President, Shorebank Corporation Steve McConnell Consultant, Shorebank Corporation Bob Nash Vice Chairman, Shorebank Corporation Jean Pogge Senior Vice President, National Accounts, ShoreBank Chicago Lynn Railsback Manager, Corporate Services, Shorebank Corporation Puchka Sahay Vice President, ShoreBank Chicago George Surgeon Chief Financial Officer, Shorebank Corporation Richard Taub Professor, University of Chicago Beth Wagner Vice President, Shorebank Corporation

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Table 5ii. Cooperative Home Care Associates Organization Cooperative Home Care Associates (CHCA) Established 1984

Purpose Providing quality care to clients and quality jobs for low-income minority women in New York City

Type of Organization For profit entity

Revenues $17.5 million (2002)

Number of Employees 700+ in New York

Organizational Affiliates

Nonprofit entities: Paraprofessional Healthcare Institute (PHI) established 1997 Independence Care System (ICS) established 2000

Cooperative Home Care Network (founded in tandem with CHCA): Home Care Associates Philadelphia Quality Care Partners New Hampshire Careers in Health Care Arkansas Visiting Nurse Association Training Institute of Southeast Michigan

Persons Interviewed/Titles

Julia Bethea Records Specialist, CHCA Steve Dawson President, PHI Paul Dieterich New York State Policy Director, PHI Michael Elsas President, CHCA Sharon Martin Service Delivery, CHCA Peggy Powell Director of Workforce Strategies, PHI Stu Schneider Special Projects Associate, PHI Rick Surpin President, ICS

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Table 5iii. Greater Cleveland Community Shares Organization Greater Cleveland Community Shares (GCCS) Established 1985

Purpose Support social justice organizations through workplace giving programs and other philanthropic initiatives

Type of Organization Nonprofit

Organizational Structure Board Members, Board of Trustees, Staff Number of Employees 15 Member Organizations 34 Workplace Sites 150+

Financial Summary (2001) Public Support $834,924 Individual donations/ corporate gifts 5% Foundation support 6% Campaign pledge 83%

Revenues $52,244 Member dues 5% Interest 1%

TOTAL INCOME: $887,168

Distributions to Member Organizations by Issue Women, children and families 35% The Homeless, Housing and Employment 22% Neighborhoods 15% Education, Health and Environment 15% Civil Rights and Diversity 13%

Persons Interviewed/Titles

Rick Bastian Past President and former Board Member, GCCS

Chip Bromley Past President/Treasurer and Board Member, GCCS Executive Director, Housing Research and Advocacy Center

Lana Cowell Executive Director, GCCS

Daniel Elliott Past President and Board Member, GCCS Director of Advocacy, Lutheran Metropolitan Ministry

Stuart Greenberg Membership Committee, GCCS Executive Director, Environmental Health Watch

Thomas Hawn President and Board Member, GCCS

James Levin Membership Committee, GCCS Executive Director, Cleveland Public Theater

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Table 5iv. Triangle Residential Options for Substance Abusers Organization Triangle Residential Options for Substance Abusers (TROSA)

Established in 1994

Purpose Serving and developing recovering drug and alcohol abusers by promoting personal development through self-supporting programs and business enterprises

Type of Organization Nonprofit

Organizational Structure Board Members, Staff, Community Partnerships

Number of Employees 34

Number of Residents 300+

Financial Summary (2001)

Annual operating budget

$6 million (90% generated through its own enterprises) *TROSA Moving accounts for $3 million *In-kind division accounts for $3 million worth of product donations

Revenues $3.5 million

- TROSA Moving $2 million - Contract Labor $1 million - Catering $30,000

Persons Interviewed/Titles

Keith Artin Chief Operating Officer Jesse Battle Director of Men’s and Women’s Programs Tara Cates Chief Financial Officer Buddy Dove Manager, Automotive Division Randy Garcia Manager Michael Keene Moving Company Manager Kevin McDonald President and Chief Executive Officer Lisa Seago After Care Coordinator Over 15 Residents at TROSA

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Data Collection

Scheduling Interviews

The first phase of the inquiry process included data collection through on-site visits and interviews. I contacted the founders of each organization to schedule the dates for my visit.

A co-founder at Shorebank Corporation organized an itinerary for my three day visit that included pre-arranged appointments with nine strategic organizational members and a

Professor of Sociology at the University of Chicago. I met with nine individuals in total and conducted two telephone interviews upon my return. The founder of Cooperative Home

Care Associates organized a schedule for my two day visit that included pre-arranged appointments with three strategic organizational members. I met with five strategic persons and three staff members during this time and attended the board meeting. In cooperation with a co-founder from Greater Cleveland Community Shares, we collectively organized a schedule for my three day visit to the organization. I attended a board meeting and met with seven strategic persons from the organization, member agencies and workplace sites. The founder of TROSA invited me to stay at the residential housing complex for women residents during my three day visit. I spent most of my time in conversation with the founder and appointments with others were not pre- arranged. I met with five strategic persons and over fifteen residents from the program.

Inquiry Protocol

The development of an inquiry protocol (Table 6) emanated from an appreciative inquiry perspective in searching for organizational vitality. Open-ended questions form the base of the inquiry protocol and focus on membership, values, organizational and personal histories,

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Table 6 Inquiry Protocol

Membership. Learning about the values and ideals that are alive and vibrant in the day-to- day mission of the organization to make a positive impact in society.

a. What do you value most about the work you are engaged in, for example, the things you find most exciting, meaningful or even challenging? How does this coincide with the organization’s mission? b. Please take a moment to reflect on the attributes of your colleagues; can you describe the most prominent virtues brought into the organization by its members? c. Can you recall a specific moment that stands out when you felt a members’ innovation to be a driving force in your organization’s mission?

Creation. Discussing the visionary ideals combined with the mission realities so that insight may learned and transferred.

a. Were there any particular events in your life (factors/people/moments) that perpetuated you to pursue or become part of this vision? b. How have you and others contributed to the organizational directives?

Contributions. Discovering activities that have enhanced the development of the organization’s course of action.

a. Can you recall specific instances that aided and created newer possibilities for change? b. What has been the direction of thought, visions and ideas that have increased the capacities for growth and expansion? c. What kind of learning takes place that enables you to keep focused on achieving your visions and re-vamping your strategies if necessary, while at the same time remain committed to the high purpose of developing communities?

Transformation. Exploring the foundations and changes that have evolved over time in order to gain insight into connecting history with the future in the present context.

a. Has the organization’s ideals and mission grown as society has developed? b. Did the organization encounter changes that directed or re-directed its course of action? c. What guided the organization along its course?

Future Visions a. If you could look into the future and describe the ultimate positive social change, what would that look like? How would you suggest it could happen? b. What is your image of the future for the organization? c. Do you see other organizations following in your wake? How can you envision imparting your knowledge to them?

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contributions, transformation and futuristic hopes and visions. These questions were designed to capture organizational realities through its members’ own knowledge and experiences.

Interviews

During the first round of inquiry, interviews were held with persons on an individual basis at the organization or by telephone if persons were unavailable during my on-site visits. Each conversation lasted between thirty minutes up to 3 ½ hours depending on the participant’s availability and time. These individuals were recommended by the organizational founders as overall good sources of knowledge and information.

Enquiring about membership began each conversation. Often, responses from the participants led to new thoughts and questions raised by the inquirer and participants themselves that deepened the meaning of the discourse. Grounded theory principles substantiate the development of initial questions in their holistic form which then proceeds to enlarge the inquiry on the basis of responses by participants. The topic of discussion was different within each interview yet by asking the same or similar questions to each participant in the organization, we hoped to gain a comprehensive overview of historical issues, realities and experiences. All of the interviews and telephone conversations with organizational members were recorded on tape and transcribed.

Gathering Field Texts

Transcripts and field notes based on conversations and observations were compiled to assist in capturing the ethereal essence of each organization. Theoretical sensitivity of this raw

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data in conjunction with company literature, reports, press releases, publications, articles, websites and additional books and resources were used to support the development of narratives for each organization that provide the basis of the theoretical framework presented in this dissertation.

Data Analysis

Using Narratives as Interpretive Inquiry

Much of organizational theorizing maintains an underlying traditional, positivist logic of causality that attempts to understand and define organizational functioning through control, rationality and truth that demand facts and validation of theoretical ideas. One method to learn about the Why of organizational actions have been the focus of many conventional theorists (Simon, 1976;Thompson, 1967) who have approached theorizing from an outside- in approach, ultimately generating static yet potent ways for persons to manage and respond in organizational life. Another approach in understanding the How of organizational functioning is through experiential based learning. Barnard (1968) and Follet (1995) used their own personal experiences to develop an inside-out approach to management theory when elaborating on notions of cooperation and hope as a source of building organizations rather than using causal assumptions of rationality.

This present study uses the development of narratives as an alternative inside-out approach and source of knowledge to understand and learn about the What in organizational life.

Narratives are poetic, holistic and forward thinking. By interweaving history, present experiences and visions for the future, a wholeness of relationship and interdependence among people and actions in a contextual framework is presented. Narratives involve a first-

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person re-creation of situations and events related to the individual or social experiences

(Ollerenshaw and Creswell, 2002) relative to organizational history, folklore and activities.

In creating a broader and more holistic sketch of organizations, the inquirer can remain faithful to the area under study from a practical and ethical perspective (Bochner, 2001) because activities, actions and events are defined by the participants themselves.

Organizations are understood by how and what it does. It is these processes, acts and services rendered for its own sake that shape its accomplishments and development.

Narratives help persons to imagine and understand their own personal or another person’s stories, actions and reactions (Bruner, 1986). By collaborating with organizational members, the inquirer is able to authenticate what is heard and reported in order to capture existence and transform it into a social context that is representative of their actions.

Developing a theoretical understanding of noble organizing that emanates from the development of narratives gives credibility to the emergence of evolving systems that are consistently dynamic and “such theory may properly function to sustain value commitments and to restructure the character of social life” (Gergen, pg. 1344, 1978). A narrative’s generative capacity allows experiences to be viewed as vibrant and continuous (Dewey,1930) which for purposes of this dissertation, will hope to extend horizons and invite conversations and co-creation for social action in the future.

Narrative Development

In conducting a holistic discourse analysis of the field texts, the inquirer attempts to present a thematic, descriptive and chronologically sequenced narrative based on members’ responses that captures the meaning and substance of each organizational reality. The

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narratives are a compilation of responses and ideas emerging from the interviews and

literature, entitled based on the most prominent and distinct characteristics evident in the

organizing culture of each organization.

Narrative Data Analysis

The constant interplay between proposing and checking cross-organizational discourses directed the development of a line-by-line open coding analysis for each narrative. After conceptualizing the data, conducting a thematic analysis of the narratives led to labeling phenomenon and creating categories central to each organization. Simultaneity in reviewing each narrative resulted in making comparisons for similarities and differences relating to organizing processes and characteristics inter-organizationally.

Four distinct core functions relative to organizing processes (Table 7) resonate amongst all four organizations. These core functions representing a core image, commitment, task and output are labeled as such based on the inquirer’s experiences, knowledge and intuition. The organizing processes as depicted by the lived experiences of organizational members in the narratives are comprised of noble intentions, the translation of noble intentions into social action, social action combined with reaction and consequences resulting from the overall organizing processes.

Table 7 Core Functions and Organizing Processes Function Organizing Process Core Image Noble Intentions Core Commitment Translating Noble Intentions into Social Action Core Task Social Action

Reaction Core Output Consequences

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After conducting a thematic analysis of the four narratives, various unique themes specific to each organization and eight common, universalistic principles prominent to the organizing processes emerged in the data. The development of an initial framework characterizing the ethos of noble organizing included developing the Principles of Voluntarism, Serendipity,

Values-Led Governance, Unconventional Wisdom, Progressive Determination, Collective

Action, Reinvention and Reverberation.

Gaining Consensual Validation

A second visit was made to each organization to deepen the discourse, learn additional information and gain consensual validation through collective discourse on the aforementioned principles. Conversations were held with a majority of members contributing to the first round of inquiry along with some members not present during the initial data collection phase. Discussions were held with dyads when possible and individually if necessary to gain clarity and validation of the findings to date. Dyads were coordinated based on members’ scheduling and availability to meet and intentionally planned with the organizational founders, which was accomplished at Shorebank Corporation and

Greater Cleveland Community Shares. There was no inquiry protocol, rather, informal discussions were held with the participants to share my findings and gain confirmation of its significance pertaining to the members and organization. The core functions, principles and its definitions were presented to the participants (Table 8) and conversations with each organization was unique. Our discussions revolved around the concepts of the principles relative to examples and experiences brought in through my knowledge of the organization and members’ experiences. Through collective discourse, the universal guiding principles were supported and reaffirmed the organizing processes present, however, it was overwhelmingly clear that the Principle of Voluntarism needed to be re-evaluated.

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Table 8 Presentation of Findings to Participants for Consensual Validation Core Function Definition Core Image The betterment of society Core Commitment The desire to contribute oneself toward the betterment of society Core Task How to organize commitment to achieve the image Core Output Consequences resulting from action

Guiding Principle Definition Voluntarism Willful desire to participate as an agent or catalyst for social change Serendipity Learning and discovering through unplanned actions and events Values-led Governance Members’ ethics and values drive the organizational mission Unconventional Wisdom Intelligence in a vacuum needs the capacity to strategize and prioritize alongside others Progressive Determination To have an image and commit oneself at whatever lengths to pursue that image in spite of everyday realities and obstacles Collective Action Building on the strength of its members to propel the organization toward its mission Reinvention New paradigms and ways of approaching acts of service are created in response to societal needs Reverberation Sharing experiences and knowledge for others to create and respond

Theoretical Saturation

By exploring different patterns across the data through axial coding measures, an attempt was made to develop relationships between the categories (or principles) and their sub- categories. After a more systematic review of the narratives at the dimensional level, six categories emerged as primary overarching principles. Themes evident in the Principle of

Collective Action were similar and related to the Principle of Values-led Governance and concepts from the Principle of Progressive Determination were similar and related to ideas found in the Principle of Unconventional Wisdom. Therefore, the Principles of Collective

Action and Progressive Determination were subsumed into the Principles of Values-led

Governance and Unconventional Wisdom, respectively. Based on further review, the

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Principle of Voluntarism was re-named Principle of Intentionality due to feedback from organizational participants, its thematic conceptualizing and meaning.

Integrating the principles of social entrepreneurship involved a selective coding process within the narratives. Relating the conditions, context and consequences of each principle onto the creation, development and transformation phases of these organizations revealed that a relationship exists between the guiding principles, core functions and organizing processes within the organizations. However, a cross-fertilization of themes within each principle can be located across different phases and in varying degrees of the organizing process. There is a constant interplay between these principles based on validating the relationships against the data. The Principle of Intentionality is the starting point of departure into the Principles of Values-led Governance, Serendipity, Unconventional

Wisdom and Reinvention. The Principle of Reverberation is the consequence evolving from the thematic interrelationship between the universalistic themes.

The guiding principles of social entrepreneurship emerged from grounded theory building.

In taking the analysis one step further, an attempt was made to develop a relationship between social entrepreneurship and organizing. Thus, merging the guiding principles of social entrepreneurship with organizational theory led to the development of propositions that serve to determine the framework for approaching a theoretical understanding of noble organizing, an ideal type which remained consistent across the organizations.

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CHAPTER 3 SOURCES OF DISCOVERY

This chapter captures the realities, acts and actions of four social entrepreneurship organizations through the development of narratives. Narratives focus on the relational aspects of people within the context of events and by drawing on dialogic accounts of personal stories, meaning can be attributed to experiences, consequences of experiences and knowledge. A brief overview will introduce each organization and a rich description of the unique accounts of four social entrepreneurship organizations will follow.

Narrative 1 Shorebank Corporation Organic Evolution

Shorebank Corporation utilizes a multi-pronged holistic approach to economic community development using the business of finance and credit to stimulate growth in communities, protect and restore the environment and help customers in priority disinvested areas build capacities and wealth. It is constantly evolving and has become an institution because of the generosity, resourcefulness and acumen of its organizational members.

Accomplishments are in large part due to its experiential learnings and creative wisdom in exploring unconventional approaches to business solutions in achieving its social objectives.

Narrative 2 Cooperative Home Care Associates Counterintuitive Development

Cooperative Home Care Associates is a worker-owned cooperative home care organization committed to developing the human spirit by providing jobs for low- income minority women in New York City and working towards effecting change through advocacy and reform in a highly disciplined and regulated environment. Community values drive the organizational directives enabling members to intuitively create responses to internal needs. Collectively, its organizational members have successfully capitalized on their

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own experiences, opportunities and knowledge to enhance the mission to serve the

development of a community by creating alternative approaches to social action.

Narrative 3 Greater Cleveland Community Shares Democratizing Philanthropy

Promoting and maintaining an open and integrated community of the highest

quality by providing social justice organizations with alternative funding sources to promote community-based advocacy work is at the heart of Greater Cleveland Community Shares.

The organization has reawakened Cleveland’s awareness about social advocacy and democratic institutions have been strengthened by their work. GCCS continues to legitimize workplace giving as part of an overall philanthropic effort; they have the power and fortitude to keep reinventing themselves, particularly in response to changes and needs of its member organizations.

Narrative 4 Triangle Residential Options for Substance Abusers (TROSA) Pragmatic Vision

TROSA is dedicated to serving and developing recovering drug and alcohol abusers by

promoting personal development and collective learning through a variety of programs and

business enterprises that provide real life vocational experiences for residents to acquire job

skills, work habits and ethic, facilitating re-entry into society. It is a mission-driven

organization that is intent on saving lives and building a future for those who have lost faith.

TROSA runs itself in an effective and resourceful manner, capitalizing on opportunities to

help sustain the organization. Each person within the system is taught and trained, helped,

supported and developed by others, contributing greatly to its purposeful meaning, success

and future development.

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Narrative 1: Shorebank The Beginning The Founding Team i. Establishing a Purpose ii. Purchasing SSNB

The Turnaround i. The Market ii. Evolution - Acquisition - Public policy - Global Initiatives - Expansion in the US SB BIDCO (Upper Peninsula) SB Cleveland SB Detroit SB Pacific - Adoption of Conservation Discoveries i. Trial and Error…and then Success? - Shorebanc Cleveland - Commercial Lending - Mortgage Lending ii. Learnings iii. Challenges - The Mission and Striking a Balance - Expansion - Products and Services - Competition - The Future

The Organization i. Impact - Imparting Knowledge - Societal Impact on Shorebank - Community Outreach - Shorebank’s Impact on Local Communities ii. Organizational Structure iii. Strategies for the future - R&D - Organizational Restructuring - Advantaged Business Lines - Marketing and Branding

Nature of Organization i. The Culture ii. Values - Entrepreneurialism and Creativity - Empowerment and Financial Tools - Diversity iii. The People at Shorebank: A multi-talented ad hoc work force

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Organic Evolution

My first communications with Shorebank set the stage for what was yet to come. I contacted Shorebank Cleveland to discuss their interests and availability to participate in this study. I was directed to speak with the founders in Chicago and was immediately put in touch with Mary Houghton. We talked in detail about the project and she believed there needed to be more research done on the topic of social entrepreneurship organizations to facilitate the exchange of knowledge and ideas. She was dispassionate, however, about the term noble and asked if I had alternative synonyms to describe my inquiry; she felt ‘noble’ was elitist and preferred a more democratic word. I suggested ‘virtuous’ or ‘utopian’ and she preferred ‘altruism’ or ‘equity’. Mary supported the idea in hopes of further knowledge creation and offered the services of Shorebank Corporation to aid in my exploration.

Several banks and subsidiary companies consisting of twelve for-profit operating units and five non-profit affiliates based in five separate locations around the U.S. fall under the umbrella of Shorebank Corporation1, a holding company based in Chicago, Illinois. The institution itself is owned by a collection of shareholders, many of whom are individuals, institutions and corporations. Currently there exists approximately 500 employees (300 based in Chicago), an overall capital base of $81 million and assets totaling $1.3 billion. This is a significant change since their inception three decades ago.

The Beginning

The mid-1960’s was a time of racial turmoil in the U.S.; an era of civil rights and marches, the passage of the Voting Rights Act and the assassinations of John F. Kennedy and Martin

Luther King Jr. Urban cities across the U.S. were undergoing racial change in many

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neighborhoods, minorities were looked upon as secondary citizens and the rights of human beings were in an embryonic stage of development. Chicago was a hotbed of these kinds of activities and like most enormously important social movements, it took less than a handful of persons in dialogue to envision, enact and implement social change for the betterment of society; this handful consisted of Ron Grzywinski, Chairman and co-Founder, Shorebank

Corporation; Mary Houghton, President and co-Founder, Shorebank Corporation and

President, Shorebank Pacific Corporation; James Fletcher, co-Founder, Shorebank

Corporation, deceased as of 1998 and Milton Davis, co-Founder, Shorebank Corporation, retired as of April, 2000. Together they were able to conceive of ideas that caught the imagination of their fellow liberal constituencies, government regulators and community activists.

i. The Founding Team

Ron Grzywinski, a Caucasian man of Polish descent grew up in a blue-collar neighborhood on the South Side of Chicago. In the early 1960’s he graduated from college without ever having taken a business course and went to work for IBM as a salesman selling computers to banks in the Chicago area. He did this from 1960-63 and was less than enthused about his job responsibilities: “I knew very early on that I didn’t want to do that in life.”2 In 1963 he got a job with a small banking group in Lockport, Illinois, a small town forty miles from

Chicago. In 1965 he was promoted to manager and in early 1966 became its President.

In mid-1966 the owner of the Lockport bank became involved with the purchase of another bank in Hyde Park, a neighborhood in the affluent South side area of Chicago. Circa 1964, the Hyde Park community began changing racially. African Americans, looking for better

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housing moved into the neighborhood and Caucasians, fearing this migration began moving

out quickly. After almost eight months into presiding over the Lockport bank, Hyde Park

Bank was acquired and Ron was asked to become its President. By the Fall of 1966, the

bank lost several million dollars in deposits and Ron’s responsibility was to get involved in

the community and make the bank prosperous and profitable once again. He took it upon

himself to become educated about the intricacies of working in an economically and racially

diverse community. “Somewhere along the way I think because of that work (becoming involved

in the Hyde Park community) and perhaps because of other values, I for the first time became

really conscious of racial divisions in our society in ways that I had not previously. And so

initially it was mostly to be able to do my job- I began reading Black literature and got

exposed to the inequities in this society.”3 Ron learned about various acts of racial

discrimination while working at Hyde Park Bank. He became familiar with redlining issues

(racially biased appraisal guidelines) and discovered why most banks stay clear of investing in

predominantly Black populated areas. “ It was somehow still an abstraction…it wasn’t first

hand knowledge.”4 Ron routinely visited with customers having commercial accounts at the bank and in early 1967, he experienced first-hand the negative effects of discrimination.

“ An account was opened by man who owned a furniture store…I visited with him and observed how all the merchandise that he sold was not name-brand but that the prices were what one might expect to pay for name-brand merchandise…I asked him how he financed the purchases of refrigerators and stoves and that sort of thing…he told me they financed it themselves and explained to me that was where they made all of their money…their interest rates started at 28% upwards to 40%...I asked him if he had high default rates and he explained to me that it didn’t matter very much because they recovered all of their costs in the down payment so everything else was just extra…it was the first time I had experienced how institutions or in that case businesses took advantage of people who didn’t have access to credit or information or the ability to move the dollar freely in the marketplace.”5 On or about this same time Ron met Audrey, his future wife. She was very involved in

independent, liberal politics in the Hyde Park community and they were both very

concerned about disinvestment in the neighborhood. “She had then and still has now a very

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strong value system and was much better informed than I was about the injustices that are associated with racial discrimination in this country.”6

In 1967 Hyde Park Bank was experiencing difficulties in making their debt services. The owners were relegated to sell their interests in the bank and Ron took it upon himself to look for purchasers. He and a former IBM colleague put together a group of investors from the

Hyde Park community and elsewhere and purchased the bank on June 30, 1967. Bill Polk was President of the Adlai Stevenson Institute for International Affairs, a Professor at

University of Chicago and one of the investors in the bank. He knew Adlai Stevenson III, the Treasurer of the State of Illinois at the time and suggested Ron meet with him because he was looking to invest temporarily excess cash in a socially responsible way. After several conversations, Adlai Stevenson agreed to deposit $1 million in the Hyde Park Bank to be used for making loans to minority-owned businesses. “Adlai told me that the little research he had done revealed there were virtually no banks in the city or perhaps the state that were willing to make loans to qualified small business operators…he put in a $1million deposit from the State of Illinois into our bank for one year at the market rate of interest so that we could provide loans to minority-owned businesses…we accepted that… and that could well have been the beginning of social investing in the United States.”7

A raised level of awareness in the consciousness of America to find private sector solutions to urban business problems emerged in the late 1960’s. “It seemed to me as though there was no way that was going to really happen because corporations were created to do whatever it is they do, you know, manufacture computers, run railroads, fly airplanes…they weren’t really set up to deal with inner city issues. But it seemed that if we had a viable

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program for making loans to minority-owned small businesses and if Adlai Stevenson was willing to make a deposit in this little neighborhood bank in exchange for it doing something that it might not otherwise do, that it might be possible to convince other corporations, churches, unions to make similar deposits with us.”8 In early 1968, Hyde Park Bank created a separate division within the bank whose sole purpose was to make and service loans to minority-owned businesses.

“And because we would raise additional deposits from outside the market that with the earnings on those deposits this program would be self-sustaining…It would not be a drain on the shareholders and we would operate it at least at a break-even…and then in what was one of life’s great fortunate events that evening after the board approved it, I went to pick up my wife from work at the alderman’s office and there was a very friendly woman who interned there- a Japanese-American woman and she asked me what was new…I told her that I needed to find somebody to run the new department at the bank and she told me that it was imperative I meet Milton Davis.”9

Milton Davis, a man of African American descent worked full-time at the University of

Chicago, was a civil rights activist and also a volunteer and leader of the Chicago chapter of

CORE (Congress of Racial Equality), a very radical organization in the 1960’s. After four or five meetings spanning an equal number of weeks Milton agreed to leave his current job to join Hyde Park Bank and manage the minority lending department. “ He didn’t know anything about banking - I told him I didn’t either, but I would teach him.”10

Mary Houghton, a Caucasian woman raised in Wisconsin joined Hyde Park Bank almost sixty days after Milton Davis. She does not describe herself as a social activist yet recalls experiences contributing to her sense of civil liberties. Out of college Mary went to work for an insurance company, was bored after one year and went to graduate school.

Afterwards she went to work at the Johnson Foundation for about one year, got frustrated and “started wandering the earth looking for jobs.”11 She came to Chicago in search of

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employment and visited with Bill Polk who sent her to meet Ron. “ I showed up in the

Hyde Park Bank lobby and Ron came out and said he was too busy to talk, yet I could stick

around for dinner and he’d be free. He also told me that I should go drive up and down 47th

Street and 63rd Street to make sure I was really interested in the kind of work they had at the bank…so I did and then we had dinner- a very pleasant dinner and I went away. I kept looking for a job.”12 She continued her search for employment and for lack of anything better, called Ron and ended up doing an internship at Hyde Park Bank during the Summer of 1968. She liked the meaningful importance of the job, enjoyed working with the people and chose to stay awhile longer. “ I decided that economics was more fundamental to me than politics…and the idea of a bank is a great place with which to bring about change.”13

According to Ron, when Mary and Milton joined, the minority lending program really began

to take on some structure.

First Pennsylvania in Philadelphia was the first bank in the country to create a separate

department to promote minority lending; Hyde Park Bank was the second. In the late 60’s

Hyde Park Bank was growing by leaps and bounds; their percentages and absolute dollars

were well beyond most banks in the country for this type of program. The bank needed to

hire more staff and Milton Davis contacted his good friend Jim Fletcher who was working

for the Citizen’s Action Program in the Office of Economic Opportunity during the Lyndon

B. Johnson years. It was 1968, the year Nixon was elected President and Jim worked with

the internal transition committee for the new administration. As part of this committee he

saw the beginning of the end of OEO (which ultimately happened); Jim was open to

discussing other employment opportunities and on June 30, 1969, joined Hyde Park Bank.

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The era of civil rights and War on Poverty was ripe in the 1960’s with issues vibrantly alive

more so about political rather than economic empowerment.

“ The War on Poverty had been full of the concept of community control of the institutions…the federal government would send money via community organizations with community boards where the boards are made up of the residents who decide where the monies go in the community. It was unusual in this era to find African Americans who were both committed to working on issues of poverty and race but courageous enough to 1) associate themselves with any White people and 2) to think that there might be something to this idea of a business approach. So for Milton and Jim who were both well regarded and would have been seen in the African American community as successful, committed, strong people- they were doing an unusual mixture of commitment to community development by joining a business.”14

ii. Establishing a Purpose

The founding four would often get together after work at the Eagle Bar to hang out and let

their imaginations run wild. They developed a vision, a kinship and were impassioned to do

something greater. “ They all came out of the left, were opportunistic in the best of senses

and had a very special kind of package…”15. They were young, successful and enjoyed

working with each other. “It would be four of us talking and dreaming…we’d all been

involved one way or the other in the civil rights movement and community action

programs”16. Mary ran a daycare operation for low income families, Milton was a civil rights activist, Jim was with the OEO during the days of the Great Society and Ron created the minority loan program at Hyde Park Bank; together they saw the limitations of their organizational activities to deal with community revitalization in a comprehensive way and believed their impact was limited to families using their services. “ I think Jim felt the OEO was able to make an impact yet he believed it was marginal compared to the monies that were being put into its programs. Milton was frustrated in really being able to impact the lives of people…they could accomplish changes in legislations, get people the right to vote etc. but was it really changing their economic outlook?”17

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The crux of their conversations centered on a few main issues: “ At the time it seemed the

only organizations in our society that cared about the totality of needs that existed in urban

communities-housing, schools, childcare, crime, small businesses…were volunteer

neighborhood-based community organizations…the problem was and still is- they are

voluntary associations that are highly dependent on whatever kind of money they can raise

from everything under the sun including bake sales to foundations and grants…an unstable

source of funding…so it seemed to us as we would drink beer that there ought to be a way

to take that kind of organization with that kind of agenda and wed it in some way with what

we were doing at Hyde Park, which was essentially running a self-sustaining organization

that was dealing with one facet of that life and doing something that everybody said could

not be done…”18 Declining neighborhoods are about societal forces and other factors;

“Ron wanted to challenge those social forces.”19 If they could get control of a bank and use it for social purposes, they could use it as a financial intermediary to enlarge their scope of community activity and development. In retrospect, Mary recalls it was a fun, radical idea to do something no one thought could be done and devising innovative strategies was exciting, satisfying and rewarding:

“ Our job was to turn the banking industry upside down…we had this idea that the people’s deposits ought to be used in the people’s neighborhood or that you could attract deposits from outside and channel them into a neighborhood…these ideas kept us going- that we would prove that racial change and economic deterioration were not inevitable…we were going to prove that neighborhoods that were African American might be economically stable, too…there were not just poor people living there, there were working class, too…and the neighborhood didn’t have to go in the way of demolition…the satisfaction of innovation!”20 Changes in banking regulations stipulated that bank holding companies could invest in

community development corporations. “And so they thought if a bank holding company

could invest in a community development corporation, could in fact a bank holding

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company be a community development corporation or own a community development

corporation?”21 They believed they could accomplish a great deal in terms of community development for the communities they wished to serve, felt they were outsiders to the banking industry and enjoyed that posture. “ It was white and black together, shoulder to shoulder against the poor (with reference made by Mike Nichols and Elaine May).”22 Their

approach was more unconventional than traditional banks and their style was non-

conforming; the mission appeared to be the engine driving their convictions. Ron believes

he could never have achieved the success of buying South Shore Bank without Milton, Jim

and Mary. It was a true interracial team at the top; Milton and Jim at the time were “

…flexible enough to be willing to associate themselves with this venture at a point in time

when in the African American community, it was truly politically correct to be highly

ideological…they were unusually practical...Ron came from an un-liberal, blue collar family

and he was not like his banker friends. He was not ideological from his class… nor was I.” 23

Finding good friends and yearning to buy a bank appears to be the essence of a good partnership. “ We really thought each other was just the greatest thing we ever met…this was really a tight team and we just sort of clicked…we had enough success that we thought we could do something bigger than this and so we just dreamed it up and did it.”24 The foundation of their relationship was “ …a liberal political thing…”25; it was a passion they

shared for racial equity and their faith that a bank would be the perfect tool to create

neighborhood change. “They did not believe the federal government could create lasting

change…it was their belief that only the private sector, which was able to free the energies,

finances and the interests of local residents could create real neighborhood development.”26

They formed a very real and uninhibited comfort level in talking to one other about race

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relations in the country which was unusual at the time. “ There was no way to succeed at

what we were trying to do unless I really was able to trust Milton’s judgment on race issues

because I just didn’t have the experience or the knowledge.”27

When the minority lending program was created at Hyde Park, the intent was to become

self-sustaining. They were successful at raising deposits in support of the program and as a

result, it was very profitable. How the profits were distributed, however, posed a

conundrum. “Milton, Mary and I then Jim wanted to use a significant portion of those

profits to grow the program or to reinvest it and expand it and do what we could with

it…other colleagues felt that those excess profits belonged to the rest of the corporation and

the shareholders…it was the philosophical difference of opinion that probably united the

four of us to really start thinking about ways to get out of that situation and to create a

situation in which we would not be dependent on that ever happening again…in the end,

capital controls, and if we were going to try to pursue the mission or the vision that we had,

we had to have shareholders who agreed with that position.”28 When Shorebank was established, investors did not seek the highest return on investment; they purposefully invested in a regulated, sound organization with a development mission.

The four founders underwent a long three-four year methodical process to determine the type of business they wanted to create. They had some expertise in banking and had experience with developing minority lending programs and because the small business loan program was such a great success, they believed that a bank (considered a credible institution) would be a good platform and intermediary for contributing to economic community development while simultaneously yielding a profit; this still remains an

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incredibly high value at Shorebank today. “We thought- should it be housing, credit unions,

jobs, banking? We thought a bank- wow! To try and buy a bank and raise capital…we all

got excited! A period when you’re raising capital- you just get totally focused on actually

raising the resources to do it… We did a big study project and thought if you could

intervene for minority small businesses and find a lot of demand and make good loans, what

else could you do?”29 They researched five or six other lines of businesses and stayed with banking. At Hyde Park Bank, they extended loans to persons throughout Chicago. In their new venture, they made the conscious decision to target specific neighborhoods and focus their energies and resources into one area in order to make an impact.

Al Raby was a very important influence on the founding of Shorebank and in fact was one of its incorporators. He was an African American civil rights leader, organizer, Martin

Luther King Jr.’s chief advance person in Chicago and a former teacher. He was a personal friend to Mary and Ron and more famous than Milton and Jim. He believed that integration was a good solution for the problems of race yet was thought to be too much of a compromiser with whites in the African American community.

“ He had a very complicated profile in the city because he was a very strong public leader but he wasn’t far left, yet he was on some level very left. He was an intense union organizer but on some other level he was seen as much too accommodating. He lived in Hyde Park which was an integrated community….and he hung around with us- we were white. We were thinking of going to all sorts of much poorer neighborhoods like Woodlawn or Englewoord and Al just got so frantic with us because we were going to try to do something that was too hard….so he was the one that sort of single-handedly pushed us toward South Shore as opposed to the other neighborhoods…it was really important because if we had gone to the other communities- we would have failed. Al was that pragmatic- we thought that we’d have to pick a really crappy neighborhood and he would simply say ‘Don’t be like all the other great white liberals who are going to do the most for the least of us…you guys will fail!’”30

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The founding four had a basic plan and were committed to the idea. “ My guess is that they

didn’t have any idea what they were doing…but they had heart and they had passion.”31 The wheels were set in motion to begin a new venture and the principals mustered up the courage to forge unknown territory. “ We didn’t really think too much about all the things that could go wrong nor did we really imagine that we were going to learn as we go along…we were just going to go one step at a time and figure it out.”32 This coincides with their basic philosophy and contributes to the entrepreneurial heart of the organization, a quote from Napoleon that sits in Ron’s office: ‘First commit, then figure it out.’

iii. Purchasing South Shore National Bank33

In the Fall of 1969 Ron left Hyde Park Bank to pursue what became Shorebank. He

stepped down from his position as President yet stayed on in a part-time capacity as Vice-

Chairman, which he describes meant nothing. He went to work at the Adlai Stevenson

Institute which “…served as a think tank for mature individuals who wanted a break in their

careers in order to consider social issues…Grzywinski made use of that period to look into

possibilities for a neighborhood development business.”34 He spent over two years trying to

figure out the legal structure, testing the idea, looking for a bank and then raising capital. “

And Ron the visionary really believed that banks had influence in the process- his theory was

that a bank, having confidence in the positive economic future of a neighborhood, could

make a difference in reversing this cycle of decline.”35 Mary, Jim and Milton stayed on at

Hyde Park to continue running the small business loan program. They continued to be very successful and created more lending than any other bank in the U.S. They found the work fun, exhilarating and refreshing and were ready and prepared to pursue their dreams.

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In the early 1970’s, South Shore National Bank (SSNB) was based in the heart of a South

side neighborhood in Chicago that had become disinvested. “The bank was losing

profitability and blamed their demise on the economic deterioration taking place in the

community…these were code words for racial change.”36 The bank appealed to the

Comptroller of Currency (the regulator for national banks) to move its location to a downtown neighborhood. For many reasons including protests by a local neighborhood community organization against the move, SSNB was denied permission and consequently put the bank up for sale. Three days later Ron went to SSNB and informed the Chairman that he had just begun to raise capital in anticipation of purchasing the bank and had commitments for $320,000. The Chairman told him to come back when he had more money.

Ron, his partners and investors formed the Illinois Neighborhood Development

Corporation (INDC)37, a regulated bank holding company. By the end of June, 1973 the

INDC raised $800,000 of philanthropic capital, secured a loan for $2,500,000 from

American National Bank and bought South Shore National Bank [several years later, renaming it South Shore Bank (SSB)] on August 23. Its assets had shrunk to about $42 million so there was plenty of work to do in turning the bank around. Mary quit Hyde Park

Bank approximately one-two months prior to the purchase and joined Ron. Milton quit

Hyde Park Bank on the day before the bank was purchased and started with SSB on day one.

Jim Fletcher remained at Hyde Park Bank for another four ½ years and continued to run the minority lending program. It took him that long to join SSB because they did not have enough money to pay for all four of them. It was a high risk they were taking yet as Ron describes it, “ …everybody knew we’d fail so it didn’t matter…we didn’t have enough

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capital, it was the most densely built neighborhood in the city and about 75% of the housing stock was in these multi-family block of buildings.”38

“The founders’ ideas were very based in ideology but it was grounded and rooted in real life business experience…and so I think without those two things they wouldn’t have succeeded.”39 The spirit was alive and dreams about to be made into reality for these four young mission-driven individuals. As a team they believed their ideas would work. Ron was experienced at running a bank and played the role of primary salesperson with the investors. According to Mary, he had the strongest entrepreneurial capacity of the four.

With all senses of her true self-effacing nature, Mary describes herself as being the

“…youngest, least experienced and most plain vanilla of the four…a generalist with commercial lending experience…Milton was a man with complex, good judgment on dealing with issues…he was familiar with the realities of banking, race and customer courtesy- he was a community activist… Jim loved banking…he wanted us to create a great bank for business people. He was a deal maker…”40. Jim had a passion to finance small business people and businesses and together “ …there was real comfort in numbers…there were always four people who made the decisions…together.”41 They wanted to make credit accessible to people denied in the past, allowing them to build wealth and become players in the community; the democratization of credit, per se. The high degree of persistence in the values of these four persons has permeated into the organization contributing to a culture which is still very much alive today. “ The founders have given their lives to this institution…there’s not much more they care about in this world other than this institution and what it is doing for the people in the communities we serve…this institution is their heart, their mind, and their soul and that’s a big piece of the success of this bank.”42

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The Turnaround

South Shore National Bank was seen as a failing institution. Lending and deposits were headed in the wrong direction and there was no core left to the bank . It was evident that turning a profit would be a hope for the distant future. “ Not only had the depositors left this bank and management wanted to sell the bank and get rid of it, but there was no staff in the bank…there was only one mortgage loan officer who made two mortgage loans in total that year…there was no consumer loan officer, nobody making car loans or unsecured loans or home mortgage improvement loans.”43 The first few years was an extremely important period in the history of SSB. Ron, Mary, Milton and Jim had to focus on the financial outlook, recapture the support of the local community, staff up the bank and change the mindset of residents and business persons from avoiding the community to diving deeper into it. They tried to bring in a few senior banker types but conventional bankers felt the bank was doomed and chose not to become part of it. The turnaround came in late 1974 when South Shore National Bank decidedly focused their efforts on training their own appraisers and single-family mortgage lending.

“ The problem was the appraisal. A certified appraiser using the established guidelines would have to give very low values or refuse to appraise a property in a racially changing neighborhood…in the appraisal industry there are many ways to appraise property. One is based on appraisal guidelines, another is based on the demonstrated market value, another is comps-what did the house down the street sell for. So what they decided to do was train their own appraisers…got them certified so they would be credible and then sent them out and said ‘Don’t do it on appraisal guidelines…we want to appraise it based on their real market values’…so they gave selling price values to these homes…as a result, property values in South Shore rose faster between 1970 and 1980 than any other community area in Chicago because of their appraisal process- and not only would they appraise it but they would stand there and make the loan…and so by having a bank able to appraise at true value and then make the mortgages, it created a much more active and more interesting mortgage market. So that’s what we did and it was very successful!”44

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The bank lost money in the first year and turned itself around; the holding company (INDC)

lost money for ten years. “ I think the bank started making money in ’75 and have been

making money ever since…they have built a national reputation because they care so

much.”45

In the late 1970’s, the founders deemed that a bank by itself was not enough to create true

community development. “ Banks by their nature are reactive institutions. We have to wait

for people to ask us to borrow money- we’re not allowed to own and rehab property and

we’re not allowed to run businesses by banking law.”46 Two sister companies, City Lands

(now Shorebank Development) designed as a for-profit real estate development company and The Neighborhood Institute (now Shorebank Neighborhood Institute, SNI), their non- profit affiliate were created to provide ‘tenant advocacy, education, job training and placement services.’47 This became their model for the development of Shorebank

Corporation; a multi-pronged holistic approach to economic community development.

i. The Market

In the late 60’s and early 70’s, there was a spiral of decline in neighborhoods of many urban areas in the U.S. including Chicago. “ When a neighborhood would start changing racially from white to black, realtors and predatory lenders would come in and fuel that change with a lot of ‘panic peddling’…first the realtors would literally walk through the neighborhoods knocking on doors saying, ‘I’ll buy your house today for X, but if you wait a week, they’re

(referring to African Americans) moving in and your house will be worth less.’ People would get scared, want to sell and they would get out fast.”48 The second problem that compounded the situation was redlining, a policy of the Housing and Urban Development. When a

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neighborhood was in transition or racially changing, determining the value of property and housing was difficult to assess and no loans were extended to individuals living within the redlined area of the neighborhood. This policy was eliminated in 1979.

Housing market opportunities opened up to African Americans in the 1960’s. South Shore neighborhood had dense housing and African Americans began moving in. An urban renewal program at the University of Chicago assisted the Hyde Park neighborhood but no funds remained to help with any other areas to the north or south side of Hyde Park; in effect it became an island of sorts. Because the Hyde Park neighborhood is adjacent to

South Shore (they are joined by a large park), it was assumed that South Shore would suffer the same fate as the northwest neighborhoods of Woodlawn and Englewood did ten years earlier, which at the time was a wasteland and the worst of urban blight. In terms of their role in society, Shorebank stopped that tide for South Shore. “ This neighborhood would be far different if we had not started making investments early on…and what happened then is that our investments encouraged others to invest because investing is about confidence…so that has made an impact physically on the neighborhood and South Shore has never been considered blighted.”49 Social elements were added over time such as gangs and drugs which have slowed down their efforts or made it more challenging, but for homeowners in South

Shore, they now have a stable community in which to live. As for the other areas, they have stayed dormant for almost 20 years and recently have begun to get rebuilt into less dense housing; apartments buildings are being rehabilitated, other buildings are being made into condominiums and a fair amount of single-family housing are being newly constructed, much of it financed by Shorebank.

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During the first decade, efforts were mainly spent on turning the bank around. “ It wasn’t

just stopping the bank from failing, but it was getting it to a positive trajectory which really

took 10 years.”50 The second decade from 1983-1993, Shorebank did very well. It was a time of modest expansion in other neighborhoods of Chicago (Austin) and an active consultancy contract to assist in creating a similar community development bank with

Southern Development Bancorporation in Arkansas at the request of the Winthrop

Rockefeller Foundation (providing financial support) and Governor Bill Clinton. When he became President, Mr. Clinton enforced the Community Reinvestment Act partly due to the efforts of Shorebank in Arkansas. In response to this newly enacted program, Shorebank was able to encourage many major Chicago financial institutions to invest in them; they raised $7-9 million of new equity capital. At this time, Shorebank was a $200-250 million bank and growing.

ii. Evolution

Transformation within the organization spans over three decades worth of acquisitions, affect on public policies, influence on the banking industry, global outreach, expansion, internal growth, organizational change and new directions for the future. It is apparent that

Shorebank naturally and continuously add levels and layers of programs to their agenda with an infrastructure that supports its movements and growth. This helps broaden their portfolio while sticking to their mission of community development and profitability. It has been invigorating for many at Shorebank to branch out into other areas and create different projects; for the most part, it has been profitable and they have been able to make a positive impact on communities.

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During the era of expansion, Shorebank tried different models to expand and replicate

themselves in other locations “which was exciting and interesting…I think that the

continued focus on development has been a result of the holding company expanding and

establishing operations in new locations and raising capital for doing development work.”51

In spite of sporadic inter-organizational issues, management has held steadfast in their belief; there are different kinds of ways to impact communities and there are different kinds of communities Shorebank is capable of impacting.

Recently a different approach has been adopted. “I don’t recall what year it was but at one time we started 3 companies at once…most of the expertise was here in the Chicago bank so people were pulled all over the place…we really were much more of the tail wagging the dog but now we’re trying to become more disciplined about our future moves.”52 They are in the process of establishing some guidelines before venturing into unknown territories and intend to assess projects over a shorter period of time than in the past to evaluate whether it makes sense to go forward. Acknowledging they are incapable of doing everything at once,

Shorebank is taking one step at a time.

Acquisition

In 1995, a local CEO at a large corporation offered to support Shorebank if they would raise

more capital and solidify their base in Chicago by doing more acquisitions in the area.

Management proceeded to investigate and identify banks that would complement their

community development agenda when they were approached by the owners of Indecorp, an

African American-owned bank holding company that owned Independence Bank and

Drexel National Bank (both retail banks located on the South Side of Chicago). “ We raised

the capital to purchase the banks through a very collegial process using a lot of people both

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in and out of management, bought the two banks and doubled our size overnight…we went

from $2-250 million to $450-500 million in one day.”53 This acquisitions had a major impact on what Shorebank has become today. It expanded their geographic locus from the South

Shore community to the larger South Side area of Chicago and it took Shorebank into retail banking. Prior to this acquisition they had a small retail operation of $100 million in deposits from individuals in the communities and small businesses and an equal amount was in the form of development deposits from customers outside Chicago. They transformed into a bank that was mostly retail and had to figure out very quickly how to manage it otherwise they would lose the value of doing the transaction.

Jean Pogge was asked to manage the consolidation efforts which she found to be exciting and challenging. There were many issues to be dealt with from technical integration to cultural reorganization.

“ There were a million things to do which included interfacing with our Washington lawyers for all the regulatory approvals…it was building teamwork because the two banks we were buying had two very different cultures and we had a third…Drexell was almost a plantation mentality…Independence was very hierarchical…and then Shorebank came in with its meritocracy…so we had to figure out how to consolidate and where we wanted to consolidate quickly and where we wanted to wait…and we had to figure out how to build a shared culture among all of these organizations. It was a real change management process- we had ten teams of people, one for each functional area of the bank mixed with employees from all three banks…and by March 1996, we created one bank out of it.”

Public Policy

In 1985 Governor Bill Clinton asked Shorebank to help create a community development

bank in Arkansas. Bob Nash was the Economic Advisor to Governor Clinton and acted as

a liaison with Shorebank and the local community institution to develop Southern

Development Bancorporation. He brought Shorebank to Arkansas because he was

impressed by their role and social commitment to society. “ And when I met them I liked

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them. I could feel their passion ad as a public policy official, I was an advocate for them.”54

When Mr. Bill Clinton became President, he pushed for others to develop Shorebank-like institutions in the country because he believed it represented the future of small to medium- sized banks in the U.S. “ It was the basis for the CDFI Program that President Clinton introduced in 1993…he used this model to cite in passing the federal legislation that has resulted in community development banks in this country.”55 The Community

Development Financial Institution (CDFI) program was established and is run by the

Department of Treasury. Institutions, banks or non-bank entities can get certified for

CDFI credit and they become eligible for funds or investments from the government. Since its passage, almost forty community development banks have sprouted around the country.

Shorebank replicated itself in a sense through these initiatives by creating the industry of community development banking which bred competition. They were influential in the creation and passage of the Community Reinvestment Act (CRA) in 1977 which established an affirmative responsibility for banks and savings and loan institutions to serve the credit needs of low and moderate income communities, making it somewhat of a mandate to invest in communities. Banking institutions’ response to this? Some have no idea how to institute development work and instead opt to invest in Shorebank because of their expertise. Banks choosing this route receive credit from the CRA and Shorebank increases their

Development Deposit portfolio. Shorebank also manages the National Community

Investment Fund (NCIF) which invests in the CDFI and are certified by the Treasury. This fund attracts money to do more community development work and effectively, acts as a catalyst to create more institutions like Shorebank.

Global initiatives

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Ron and Mary felt there were opportunities around the world that fit within the scope of their mission. They began doing work overseas and in 1983 signed their first consulting contract to advise Grameen Bank in Bangladesh.

Poland

In 1990, Shorebank launched their first on the ground long-term international program.

“South Shore Bank began administering a small business loan program in Poland in cooperation with the Polish/American Enterprise Fund to finance small, privately held businesses.”56 They helped reconfigure the banking system and assisted with small business development after the fall of the Berlin Wall. The Poland project acted as a catalyst for creating Shorebank Advisory Services (SAS) whose main focus is to “provide consulting services on non-conventional approaches to persistent development problems.”57 In 1993

Shorebank concluded their contract with the Polish/American Enterprise Fund and SAS has catapulted onto a much larger scale in terms of international development work.

Russia

In 1994 Shorebank took on a pilot project in Russia that resulted in a long-term project with the European Bank for Reconstruction and Development (EBRD). “ Shorebank was contracted to administer a small-business loan program in Russia by the EBRD and in

Bulgaria by the Bulgarian-American Enterprise Fund.”58

Currently SAS continues to work in Azerbaijan, Armenia and Romania and also has contracts for development work in Georgia, India, Jordan, Kenya, Mexico, Nicaragua and

Northern Ireland. Shorebank is in the process of building a separate investment corporation, ShoreCap International to be managed by Shorebank. They have raised $17

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million and are looking for additional investors to invest in regulated micro-funds and

financial institutions focusing on small and micro-businesses around the world.

Expansion in the US

1987-1997 was an era of expansion for Shorebank. This ten-year period of growth has

amounted to several new companies being formed in multiple locations. “ All of the

expansions except for the first one have been opportunistic- an opportunity came along and

we took it…the timing may not have been right and in a perfect world the way we did it

might not have been the way it should have been done for maximum, early best results but

we took the opportunities and ran with them.”59 This ultimately led to paving the road toward future growth and expansion.

South Shore Bank in Austin was established in 1987 and its primary focus is lending. It was

Shorebank’s first expansion outside of the South Shore neighborhood, located on the West side of the city in a low-income neighborhood. They made a conscious decision and deliberate choice to enter this neighborhood after a cogent analysis of the environment including layers of detailed research and community outreach.

Shorebank BIDCO (Upper Peninsula)

In 1991 Shorebank partnered with Northern Michigan University to create a non-profit subsidiary, Northern Economic Initiatives Corporation (now called Northern Initiatives) “ to provide business development assistance and micro-enterprise loan programs in

Michigan’s Upper Peninsula. In 1992, Shorebank established North Coast BIDCO (now

Shorebank BIDCO) to originate flexible secondary financing and provide management assistance to local businesses.”60

Shorebanc Cleveland

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Cleveland Tomorrow, an association of top business leaders and corporations in the

Cleveland community requested Shorebank to provide an assessment on ways to address economic development. In a consultancy capacity, they evaluated opportunities for creating a community development bank and the results indicated that the environment was ripe.

Shorebank in conjunction with the City of Cleveland, Cleveland Tomorrow and various foundations proceeded and implemented a strategy to open a bank. Shorebanc Cleveland

Corporation, the holding company opened its offices in 1994. Their products and services include banking (ShoreBank Cleveland), real estate development (ShorePlace Development

Company which is currently inactive), a non-profit affiliate focusing on business assistance

(Shorebank Enterprise Cleveland) and equity financing (ShoreBridge Capital Corporation).

Shorebanc Cleveland has traversed a rocky road, however, they are energetic and creative about opportunities for development and achieved profitability in 2001 with an asset base of

$50 million.

Shorebank Detroit

Wayne County in Detroit requested Shorebank to advise them on the possibilities for establishing a community development bank in the area. Detroit Development

Bancorporation was being formed in 1995 and in 1996, they opened a loan production office and incorporated two non-bank development affiliates, a real-estate entity called Shorebank

Development and a non-profit affiliate called Shorebank Enterprise.61 In 1998 Shorebank acquired the assets of Omni Bank in Michigan from the FDIC to create ShoreBank Detroit.

The Detroit operations have been the least successful for Shorebank. “ It has been too hard…Detroit was in horrible shape when they went there, the political system was not cooperative and there was no ‘Cleveland Tomorrow’ type of group to support it.”62 Some of

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the capital that went into the Shorebank Detroit expansion came through the Treasury’s

CDFI Fund.

Shorebank Pacific

“ Historically the argument is you either have jobs or you save the environment…and rarely

is there conversation about jobs or improving the economy while protecting the

environment.”63 In the early 1990’s, Ron and Mary were approached by Ecotrust in

Portland, Oregon about exploring ways to combine community development with their

environmental work that focused on coastal temperate rain forests in the Pacific Northwest.

“ Mary went out to the Pacific and got all excited about the whole idea of

conservation…they’re out there and they came back talking about oysters- there was a whole

deal about Bay oysters and that they’re the best oysters in the world and we kept thinking,

‘what the hell are they talking about?’…the next thing you know we’re talking about

developing a nonprofit in relationship with Ecotrust and everybody thinks they’re crazy!”64

Ron and Mary felt that environmental issues were becoming increasingly more important to their socially conscious customers and believed they should address those concerns. They envisioned the opportunity to marry conservation with profitability and expand the concept of community development with a focus on the environment. One would think this to be a stretch, after all, Shorebank began as an urban-based financial institution focused primarily on African-American disinvested communities in the city.

Ecotrust and Shorebank established Shorebank Enterprise Group Pacific in 1995, a nonprofit organization based in Ilwaco, Washington to provide financing, marketing and management assistance to small businesses in the Pacific coastal rain forest. In 1997

ShoreBank Pacific was opened in Ilwaco and shortly afterwards, Portland, Oregon to focus

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on real estate and commercial lending. Shorebank Pacific Corporation, the holding company

was established and presently are nearing profitability with an asset base of approximately

$80 million.

Adoption of Conservation

Shorebank began as an organization with a dual purpose of achieving financial returns and

development output on their investments in conjunction with revitalizing and creating

development activities for the communities they serve. “ The dual mission is equally

important and achieving one without the other doesn’t work.”65 Smart Teams, comprising inter-company cross-functional groups were established in 1998 to concentrate on strategic planning issues centered on human resource development, management information systems and the environment. The environment group was called the Eco-Team: “ We now had these two entities out in the Pacific Northwest for which that was their primary mission, and we saw both the value of incorporating it into who we are and the necessity of doing so…if you’re going to have two organizations who say this is their primary mission, it’s not very valid to have the rest of the organization ignore it entirely.”66 As of 1997 Shorebank adopted a triple bottom-line strategy including conservation alongside financial returns and community development-three equally important foci in their visions for a better society. At the end of 1999 the Board of Directors approved an ecological management policy for the corporation and each of the companies officially incorporated it shortly thereafter.

Corporate-wide, Shorebank is building conservation features into their products and services yet it still remains in its embryonic stages of development.

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Discoveries

i. Trial and Error…and then Success?

ShoreBank Cleveland

When the founding four conceived of the idea for a community development bank, they

believed it would be so grand that everybody would want to do it around the globe: “And

their job was to grow managers inside who could then be transplanted around the world to

recreate what we’ve done…well, reality strikes. They spent the first five years just trying to

make the bank profitable.”67 Around 1990, the Executive Management team (Ron, Mary,

Milton and Jim) felt things had stabilized and believed it was time to take Shorebank to other

parts of the country. Managers in Shorebank Chicago disagreed with ideas for expansion so

they resisted providing resources and sharing information. Shorebank Advisory Services

(SAS), the newly created consulting arm was asked to step in and create Shorebanc

Cleveland without the support of bankers within the institution. “Cleveland is set up based

on the best knowledge of the consulting group and the management committee but without

the hands on, day-to-day nitty-gritty knowledge of the people here who had been doing the

work…bad decisions were made and it took a long time for our Cleveland operation to

become profitable and self-sustaining.”68

If Cleveland were to have failed it would have reflected poorly on the entire corporation.

Yet in hindsight it was a significant event that helped Shorebank recognize the importance of collaboration. “ There were key people in key positions who refused to make that shift and are no longer here…we went through a period of time from 1996-1998/99 when there was a significant turnover of company presidents and senior managers within different parts of the company for a variety of reasons…what came out of that was great because we had a

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bunch of new people who came in who couldn’t think of any other way to do it besides work together.”69 Cleveland has been operating profitably now since 1999-2000.

Commercial Lending

Throughout the years Shorebank ventured into lines of businesses which were not successful but in retrospect, many of the initiatives had no impact on community development.

Commercial lending to small businesses on 71st Street was a combination of good faith and bad luck. Shorebank made credit available to the new breed of entrepreneurs and merchants enabling them to start up small businesses, retail shops and restaurants in hopes of rebuilding the street (it had become very suspect in terms of crime, gangs and drugs). It was unfortunate but the bank lost money as more than half the loans defaulted or the merchants went out of business. In hindsight, there was not much spin off for community development because only few persons in the neighborhood benefited and no real impact was felt in terms of it cascading. Shorebank revamped and developed a new strategy and in the mid-1980’s, took a more progressive path. Realizing that retail shopping strips were a product of yesteryear, they began from scratch and took control of eight acres of land by using eminent domain to build a brand new shopping center. This displaced some businesses, however, Shorebank anticipated it benefiting the majority of the community. It opened in 1990 and has been extremely successful, profitable and has impacted the community in very positive ways.

Mortgage Lending

A product that bred its own success very early on was mortgage lending for individuals to buy homes in the community, “…it was our primary development product and economic engine.”70 Shorebank was extremely profitable at a time when no other financial entity would offer loans into the community because of redlining issues. Due to their success,

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other banks and financial institutions began venturing forth into South Shore creating a great

deal of competition. At Shorebank, only one person was responsible for extending these

loans and with the increased competition, became more inefficient. Larger, more profitable

institutions came in at lower rates and Shorebank decided to exit the business. Only recently

have they decided to re-enter family mortgage lending again because “… we thought we

could create the economies of scale and run our operation and be competitive.”71

ii. Learnings

At an early stage the executive management team set a precedent at the bank and chose to

manage departments and subsidiary companies as entrepreneurial entities rather than

imposing a high level of centralized command and control. They sought out entrepreneurial

talents, placed them at the heads of companies and delegated all responsibility and authority

to these individuals. Unit managers were given the flexibility to be creative and received a

great degree of latitude on running their companies. A large part of their successes and

failures are due to the activities of the individual managers and their teams. “ Successes here

often don’t emanate from direction from the top…they generally come out in a very organic

way as the managers take the responsibility to move things forward…What we’ve

accomplished is due to all these people on the line, on the crew, and doing their job…it’s

constantly evolving and sometimes out of control. Sometimes it works really very well and

other times it falls off a cliff but at the end of the day, all the management people are

producing a lot of activities that are really relevant and they’re moving the organization in

new ways all the time…it’s a completely non-static company.”72 This contributes to more excitement at the organization yet simultaneously yields greater risk.

The flexibility of the corporation is unlike many for-profit organizations and can certainly be

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considered atypical in banking. Several attributes contribute to the dynamic of Shorebank

including its unconventional wisdom to stay ahead of the current trends by creating them in

their wake. Through its own experiential learning, Shorebank has evolved beyond its own

evolution creating newer possibilities for the future. In the midst of the 1990’s expansion

era, new management expertise was brought in from the outside because there was not

enough organizational depth internally to draw upon. Mary and Ron spent an enormous

amount of their time searching for the right kinds of people and the result was bringing in a

group of non-traditional people. “ They wanted to attract talent to the organization- talent

that had the right values and the right experiences that could contribute to the organization’s

development from a mission and operating standpoint…that influx of talent has brought

with it obviously a different perspective on what to do and how to do it…and the

organization has been very receptive to that.”73 New perspectives were brought into the organization enabling them to stay fresh in their pursuit of new techniques and ideas. What transpired? The creation of their own consulting company in 1987, Shorebank Advisory

Services (SAS) and other divisions enabling Shorebank to keep its finger on the pulse of development activities. “ We have tentacles that reach out into the industry and are connected with the industry in a variety of ways to see how other people are doing things…that information is transmitted back into the organization and evaluated as it might relate to Shorebank.”74

The original multi-pronged holistic approach to community development incorporated the establishment of a bank, real estate company and non-profit affiliate to be based in each company location. Recently, branching out beyond these operating units have come to the forefront of attention and Shorebank has evolved beyond that model into newer and

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different endeavors. People coming into the organization are given the opportunity to

create, test and implement new ideas. Steve McConnell contributed to transforming a few of

the non-profit affiliates into self-sustaining institutions by pushing for the establishment of

loan programs so they could survive without subsidy from the holding company and outside

grants from foundations: “We needed a core set of products …the one advantage to providing loans is that they provide an income source to the nonprofit and therefore they’re less dependent upon grant funding to survive as an organization.”75 They have accomplished their objectives to some degree.

iii. Challenges

The Mission and Striking a Balance

When Shorebank was created, the primary purpose of its mission was to do development

work and not maximize returns on capital for its shareholders. “It is the distinguishing

characteristic of Shorebank…nobody has ever invested in Shorebank to make money…”76

From a realistic perspective this has created a tension. Shorebank must adhere to the requirements set forth by the regulators that stipulate a certain standard of safety, soundness and profitability to support future growth and simultaneously they must achieve community development in order to serve their shareholders. “ Regulators by nature are risk-averse and so doing development generally means a higher level of risk- it’s easier for the bank to fall back into a safer operating mode where it’s taking less risk.” Pushing the mission agenda has at times been difficult. There is a healthy respect for different approaches to achieve the bottom line objectives; some persons are more passionate about development and others, profitability. The need to keep the balance is paramount yet it has always remained an internal struggle. “ In order to do good in the community and do development we’ve got to

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make money which was one level. Then it evolved to creating the perfect tension between

development and profitability which was talked about for many years. Now where we are is

talking about a perfect marriage between development and profitability.”77 Early on, turning a profit was of utmost importance; Shorebank believed it would enable them to create a positive impact for the very bottom of the economic scale. A perfect tension evolved, epitomizing the need for both ends of the spectrum to co-exist and the culmination of present day realities in creating a marriage indicates a higher level of understanding. “We know that it’s a perfect marriage- that you can make money by going through it.”78

On a day-to-day operating basis, retaining a balance needs to be continually managed,

pushed and emphasized particularly as the organization gets bigger. It is a challenge to keep

the core values and mission intact when there are over 500 employees canvassed around the

country and overseas. “ It requires constant vigilance to protect the mission…it starts at the

top but it goes all the way down through the organization…the founders are the key to this

balance as they have subscribed to this belief for more than thirty years and it’s well

ingrained in them. They’ve never given up on the idea of being able to make a difference

using conventional banking and other techniques…that has remained constant over a long

period of time which adds stability to the whole notion.”79

Expansion

It was a big challenge at various points to deal with such rapid growth and expansion. The

Austin neighborhood was the first expansion and there was much debate about its location

and operational concerns such as the appropriate allocation of resources for the project,

work flow and reporting structure. “ It was a tough time because not everyone here thought

we were ready to expand…senior management did but not everyone else...Ron, Mary, Milton

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and Jim always emphasized that what they were doing was not a fluke. It wasn’t something

that just happened to work here and wouldn’t work anywhere else-it was a real idea.”80

Shorebank took steps to accomplish their objectives with practical considerations, illustrating it was possible to create community development within a different milieu; the Austin neighborhood was dissimilar to South Shore and had different needs as well, different opportunities.

Shorebank did three company expansions in other areas of the country in a period of five years and there were many growing pains associated with this. “ In the early years, we didn’t value management-we were a collection of individuals with good technical skills and good judgment…then this philosophy began to change on or about 1992. What happened was that these start-ups didn’t work-they weren’t profitable and they really weren’t doing that much mission…so we got to know ourselves in terms of our capacity to be successful through these many expansions, which were bleeding the holding company.”81 In 1996-97,

Executive Management made the decision to stop all expansions and invest in the infrastructure of the institution for the most effective long-term results. Shorebank solidified the acquisition of Indecorp and invested heavily in management, human resources, training, technology and strategic planning. Talk of further expansion has been placed on the back burner for the time being but if and when it happens, “…it will be a careful, thoughtful, prudent expansion based on the lessons we’ve learned and with the capacity in hand to go out there and do it.”82

Products and Services

Shorebank Chicago has always been the largest, most successful, oldest and conservative of

the operating units. Multi-family rehabbing, it’s core mission product has always been the

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mainstay and primary vehicle for growth from a mission standpoint. “ It’s been hard to

introduce more mission based products that have gained traction within the bank because

they were perceived as being risky or there was a learning curve on them…up until recently,

the bank was cautious about taking on new development products or services because of the

perceived risk.”83 Recently Shorebank has begun to add a more diversified product range to their artillery including faith-based banking and more expansion into development programs.

They are continuing to push forward on the mission front to find products that strike a balance between profit and development.

Competition

“ The most exciting thing for me is to see the impact that we’re having on our chosen communities, whether it be small businesses, multi-family housing, single family housing, church financing, day-care centers…the impact that would not happen nine times out of ten without us. That’s exciting for us…and we’re doing that with people and in areas where many financial institutions could not believe it could be done.”84 More and more financial

institutions are now working with populations and in geographical areas where they would

not have considered ten years ago because of the risk in profitability. Bank One, Bank of

America and LaSalle Bank to name just a few have come into the South Shore

neighborhood. This competition has been welcomed by Shorebank- the more banks focus

on community development, the more neighborhoods prosper. It has also, however, forced

Shorebank to keep up with the current economic community development and banking

trends. They have become more customer oriented in order to provide the best, efficient

and courteous service to their clients. Shorebank Chicago is the biggest piece of Shorebank

Corporation, encompassing 94% of all assets; they have deemed their primary markets to be

located on the South side of Chicago catering to the African American, Hispanic and low-

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income communities. In order to stay on top of the competition they are creating products

and services that appeal to everyone from the single mother on welfare up through to the

minority-owned businessperson who runs a several million dollar retail outlet.

The Future

An organization that can embrace uncertainty and ambiguity will most likely progress

beyond even its own visions. “ The organization is continually producing these individuals

that step up and take leadership when leadership is called for and do it in sometimes non-

traditional ways, sometimes in traditional ways.”85 Shorebank continues to envision and

create plans for the future. Presently they are laying the groundwork for the succession and

development of the organization mainly by focusing on its people. “ It’s preparing for

leadership and other people moving up and helping to ensure that we have people who have

the same values as we have and the same sort of energy to continue this thing because this

thing is bigger than any of the people who are here… I want to make sure Shorebank

doesn’t go away because we’ve got people to serve.”86 Some are concerned about its future direction as the organization will need to entrust their vision, mission and striking a balance to new leadership after Ron and Mary’s departure. “ The balance between profitability and mission will eventually be the responsibility of someone else and that can be a scary thing because anybody who does take on the leadership role will obviously have a tremendous impact on whether it maintains the balance that it has or it leans to the left or right, depending on their views and experiences.”87

The Organization

i. Impact

Imparting Knowledge Shorebank believes very strongly in sharing their practices, expertise and experiences both domestically and internationally and have done so in very practical ways. They manage a

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fund that invests in community development banks and are in the process of raising capital

for an international company that will invest in small enterprise lending and micro-finance

banks. They have taken advantage of their publicity and recognition to find ways to

establish investment pools to invest in development finance institutions. Members of

Shorebank serve on boards and manage funds not of their own capital, for investment

purposes in other developmental institutions. “ Ron and Mary specifically have been trying

to share our concepts with others, trying to build an infrastructure that will support

institutions of a similar type…that we encourage institutions to be formed to do the same

kind of work I think is the real legacy of the organization, the whole idea.”88 What it takes to impart knowledge and make a difference is comprised of just a few, simple ingredients: “It needs the capacity to figure out where people are and how you can address particular needs with the tools that you have or how you can design your tools…I don’t think it’s a field of endeavor that is esoteric, it begins with somebody who starts with that commitment and is intelligent enough to figure it out.”89

Societal Impact on Shorebank

In terms of coming together to respond to environmental changes, there is colleagueship

and camaraderie yet the spirit of entrepreneurialism remains alive. “ We don’t really come

together…we go out and forage for deals and we go explore what’s going on…and then we

come back and try and do the ones we think are viable…when we come up against obstacles

that we can’t necessarily think our way out of, then we get expertise from our

colleagues…it’s a very easy environment to engage people.”90

Government regulations and programs continue to supply Shorebank with more arsenal to

create and innovate in ways that are socially responsible and beneficial. There are many

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community needs that a bank cannot address yet the federal government passed legislation

for banks to create non-banking institutions to respond to these social purposes. Shorebank

created other entities such as the non-profit SNI to do job placement and training and

established a real estate development company in 1978 (now called Shorebank

Development, Chicago) anticipating it would become a catalyst for jump starting activities in

the neighborhood. “ When it got hard for the bank to find individuals willing to invest

because things around them were so bad, having a big player tackling some of the worst of it

creates a sense for individuals to say, ‘Oh look. Here’s an opportunity. Things are

happening. Things are changing. Maybe it’s worth my getting involved and maybe it’s

worth my investing. Maybe it’s worth my staying here and taking care of my house instead

of trying to figure out how I can get out.’”91

Issues and problems change amongst their priority communities and in order to make an

impact, Shorebank must respond to the changing environment. They grow with their

customers and borrowers and are working towards becoming a customer-focused institution,

externally as well as inter-organizationally. “ We have to change and recognize who those

people are so that we can be ready to provide them with what it is they need for us to be

viable because we’ll only be viable as long as we offer a service that people are looking for.”92

Societal influences such as gangs and drugs have necessitated that Shorebank develop new skills to deal with certain issues such as how to protect buildings, how to prevent crime and how to find and screen for good tenants to lessen the potential for drug related crimes in buildings. They assist customers in coping with these types of social elements in order to make for a safe neighborhood. Shorebank is also exploring more opportunities to do

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lending in tandem with daycare providers and faith-based institutions, both of which are effectively capable of making a dramatic impact on the communities they serve.

Community Outreach

Historically the activities at Shorebank have been shaped by their consumers to some extent.

At the onset, Milton and Ron spent the first eight-nine months in the community and neighborhoods meeting with local church groups, attending parlor meetings and going to

PTA events to talk about their visions for the bank and neighborhood; they were also exploring peoples’ aspirations for the community. TNI (now SNI) was established as a non- profit affiliate in 1978 for purposes of relating to the community; they were initially funded by the government and received only city and state contracts which meant they had to create programs in accordance with government stipulations. TNI got over extended in its real estate line of business and in the late 80’s, the program was re-evaluated.

After the Austin expansion, the Austin Labor Force Initiative (ALFI), a non-profit separate entity was established and brought into the Austin neighborhood; it was designed to make linkages between people who lived in the neighborhood and jobs. They looked for involvement from local people yet ended up working with local community group leaders who may/may not have even lived in the neighborhoods. A few years later, ALFI merged with TNI and became Chicago Neighborhood Institute (CNI). Employment was a huge problem and they had to find an appropriate strategy. After three years of dissecting the issues and reinventing the structure, they decided to focus on building an employment program in combination with a manufacturing loan program and expected both would come together. They put together an advisory group to test the concept in the neighborhoods.

The response was overwhelmingly negative- the community wanted the bank to focus on

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wealth as opposed to job creation. “ It took us a long time to decide how we were going to

change that and by the time we had figured out something that we thought might make

sense, we were well out of sync.”93

Shorebank has since not had the energy to work in complete dialogue with community

organizations in Chicago since their earlier frustrations in trying to keep its finger on the

pulse of neighborhood groups. “ We are not a community organization and we don’t act

like one.”94 However, they have become more responsive to the needs of the community. “

Building on what works to have a positive influence rather than trying to force our thinking on a situation…our products and services are better adapted and supported by the community rather than trying to dictate something that people don’t take advantage of or don’t see the value of…we’ve gotten a lot better at that.”95 In Cleveland, Detroit and the

Upper Peninsula, there has been a fair amount of effort to work with community organizations which is partly a function of the environment and smaller size of the organizations. Community focus groups were created in Chicago to gauge people’s perception of the bank and on banking and an intentional effort has been made to learn about their target markets and customers. They wish to become a resource within the community in order to effectively create change. “ The kind of development within a community is not something we want to make happen to the community, we want to make it happen with them…we want to be a catalyst but not an agent.”96

Shorebank’s Impact on Local Communities

Development work is about taking small steps to produce systemic change and Shorebank

has committed to doing so since its inception. The human condition is constantly changing

and so is the business environment. This element keeps Shorebank members in perpetual

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motion facilitating their creativity and innovation enabling them to revamp, regroup and reconsider when necessary. Through credit and investment by and large, Shorebank has contributed to revitalizing communities by improving housing and employment opportunities, providing loans to small-business owners, creating commercial development and addressing other needs and social concerns in underserved communities. It is an ongoing challenge to keep the momentum going as problems transform into other social ills that can weigh negatively on the community. “ Society and other external factors also contribute to having an impact in the areas we’ve worked …for example in the 70’s when this institution started, you had a lot of racial segregation…but that started to break down and has become more about the haves and the have-nots…so even those blacks who were able to get an education and get a good job would leave urban communities because they wanted better schools or less crime or a nicer place to live which left concentrations of poverty- and the community becomes poorer. There’s less economic integration in the community, so these are some of the things that are working against you when you’re trying to improve it.”97 In the case of South Shore, Shorebank has experienced positive gains in terms of substantive impact yet in other areas, it still remains a battle.

Shorebank also offers educational assistance to high school and middle schools in the Austin neighborhood through their Banking on Our Future program. Students learn about finances, budgets, savings and credit in preparing for the future. To date Shorebank has committed $8 million to finance college scholarships for students in their service areas. ii. Organizational Structure

Non-profit subsidiaries, community development (banking and real estate) and environmental conservation constitute the main functions at Shorebank companies around

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the country. There are multiple organizations in different locations with different structures

and each have a different focus, but all of them remain true to the same mission. “ We’re

place-based and we customize ourselves to where we are.”98 Diverse functions take place at the various banks based on demographics and culture. Focusing on the environment is different in Michigan than it would be in Washington. Shorebank Pacific has a very strong focus on sustainable issues and environmental impact is their primary concern. Shorebank

BIDCO concentrates on rural areas and Chicago, Cleveland and Detroit focus on urban issues. Cleveland does not do much home lending yet Detroit and Chicago do. The non- profits are just as diverse.

For most of Shorebank’s existence, there was no formal management committee directing the operations of the institution; the de facto structure fell under the auspices of the four founders and even then the responsibilities of each shifted from time to time. Ron has always been the CEO of the holding company and in effect, the Senior Executive for the company and all of its subsidiaries. Mary has primarily functioned as COO responsible for managing most of senior level management throughout the organization. Milton Davis was

Chairman of Shorebank Chicago and also managed the public relations side of the businesses including community, city and governmental activities. Jim Fletcher managed the operations side of Shorebank Chicago and was the most pro-active member for posturing the holding company. The Executive Management Committee was formalized in recent years; it consists of Ron, Mary, Bob Nash, George Surgeon, Steve McConnell and Todd

Brown who joined the organization in August, 2003 after a distinguished career at Kraft

Foods. “ It’s really Ron and Mary’s style to use a management committee in one form or another to manage the operations of the company.”99 Ron and Mary continue in their roles,

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Bob works more with the nonprofit subsidiaries, George Surgeon is CFO, Todd Brown will

eventually spearhead the Marketing side of the business and Steve McConnell fills in the

gaps when necessary; he manages various projects on behalf of the corporation.

The death of Jim Fletcher and the retirement of Milton Davis forced Shorebank to re-

evaluate its future. “ When Jim died we lost a founder who could really touch people…we

have been attempting to recover from that and have made some inroads…without Jim and

Milton, we are forced to realize that our founders are not immortal. Who’s next and what

are we going to do? So we have to think about the whole internal restructuring thing

because not everyone comes here for the mission thing.”100 Many of the newer recruits are coming into Shorebank via SAS or coming up through credit as an analyst with a business banking degree; these rising stars want to know what the future holds for them at the organization. Shorebank is in the process of streamlining the future direction in terms of its management and leadership. “ Ron and Mary want to make sure that there are always people here who care about development and they want this bank to continue long after they are gone…you do that by making sure that you’ve got enough people who have the proper balance.”101

iii. Strategies for the Future

R&D

Shorebank has always been very opportunistic about achieving their objectives. “ We didn’t do a study of the 100 cities in the US and decide that these are the ones we want to be in…it just sort of happened.”102 Provided they were able to deliver development output, financial

returns and now its conservation element, it has been acceptable to ‘first commit, then figure

it out’. Since the third era, their growth spurt has slowed down only in terms of expansion,

not necessarily growth and development. In the past few years Shorebank has purposefully

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become more strategic in planning for the future. “Research and Development is calling for

figuring out what we want to do next…we need to focus instead of reacting so much to

opportunities.”103 They are now trying to reassess ways to measure impact rather than just

output; providing a product or service requires market acceptance. “ If the market doesn’t

accept it on a value-added pay as you go basis, it becomes nothing more than subsidy and in

most cases doesn’t lead to positive change…so we look very hard at providing services that

are both profitable but are also recognized by the community as a valuable service…we

don’t want to be a provider of subsidy because we don’t think it has lasting change.”104

The bank’s side of development output (or success) is measured on the amount of lending either to small businesses, homeowners or to ‘ma and pa rehabbers’ (small developers or landlords who buy properties, fix them up and rent them to others). Many ripple effects ensue from having a healthy neighborhood which starts with decent housing. It is possible to measure the number of rehabilitated housing units financed by Shorebank yet it is difficult to calculate the true impact on the people and neighborhood. If a city has healthy neighborhoods then it competes better for government funding and in the private marketplace. A healthy city contributes tax dollars in turn facilitating community development.

Lynn Railsback is working on developing a standardized process for doing innovation in research and development. Creating a balance between creativity and uniformity will be the next major challenge.

“ We’re trying to set up systems to encourage innovation and then have ways to screen and test ideas so that the good ideas can ramp up and reach scale much more quickly, the bad ideas will get cut early on and the ones in the middle-somebody’s really watching to see whether they need to be ramped up or terminated… We want to keep the innovation. We

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want to keep the sense of personal commitment. We want to keep the sort of freedom to come up with wonderful new ideas and at the same time set up systems and structures so we can really use our resources wisely so we can be more effective in doing all these different things.”105

Organizational Restructuring

Shorebank has entered the start of a newer era, one that concentrates on refocusing energies, strategy planning issues and integrating the companies into a more cohesive group in order to create synergies and teamwork institution-wide. Through trial and error, Shorebank recognizes they can become bigger and better by developing ways to grow smarter from existing resources, knowledge and experiences. Ron, Mary, Bob, George Surgeon, Steve

McConnell and Lynn Railsback make up the strategy team. Lynn is responsible for long range planning efforts to create processes to integrate the Shorebank companies, such as creating a Shared Service Arrangement designed to provide inter-organizational assistance and services. They are attempting to streamline the organization by means of collaboration and systemization without losing their sense of creativity and entrepreneurialism.

After the era of expansion and huge growth, Shorebank increased their size to over five- hundred employees scattered across the globe. There was not much direct interface between each of the company presidents and each company perceived itself as its own self-contained unit, remaining independent of any other part of the institution. Organizational restructuring was essential and in the late 1990’s, the process of creating an interdependent organization went full steam ahead.

“ We weren’t really connected with one another…we really do want to become more whole- where we have a common mission, common practices, values and procedures so that we can be much more effective in the world. We’ll be able to compete better. We’ll have more impact for the amount of resources we invest…we learned the hard way- when you’re all doing your own thing it’s exciting-you can be your own boss and be entrepreneurial but you’re having to recreate the wheel. You’re not being able to take advantage of all the

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synergies that could happen if you worked together, either work together in a geographic area or work together by sharing what you’ve learned.”106

Shorebank today is an accumulation of its learnings and management is committed to

developing a seamless organization. Company presidents now congregate at least three-four

times per year and subgroups meet monthly to approve, endorse or become involved in

decision-making processes. The five nonprofit organization, none of which used to work

with one another now convene regularly to address cross-functional issues such as raising

funds, attaining adequate revenues and strategies in the market place. Retreats take place

annually consisting of the top 60-120 strategic persons in the organization to exchange

knowledge and information.

From a structural perspective, Shorebank has decided to phase out the real estate company

Shorebank Development Chicago, recognizing their aptitude for lending was greater than

developing. Some projects produce development output yet marginal financial returns and

vice versa. Striking a balance in the perfect marriage between profit and development can

sometimes go awry.

“ We can’t continue to do those types of projects because again, it’s profitability and development…so we’re going to reinvent ourselves. We still think it’s important for those kinds of projects to happen, and we’re good at lending…we’re in the throes of figuring out how to be what we call a pre-developer- land assembler, planning, maybe some engineering, putting together a builder and developer together, convincing the city to invest in streets and street lights in areas…the city has made a major commitment with public infrastructure and housing is needed here- so we want to loan the money to do that as opposed to doing it ourselves.”107

Shorebank Chicago will be creating a new organization in response to this and will soon be selling their rental properties. In the meantime, they continue to define and refine their needs for pre-development work.

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Building the Shorebank Advantage is a recent change process taking place at the

organization; the intent is to become more standardized by adopting formal guidelines,

procedures and strategies. “ I don’t think the organization is as standardized or as structured

as it could be, yet it’s becoming more so recently. Right now, it’s still on the side of being

entrepreneurial and lacks system, yet it’s moving in that continuum…the entrepreneurial

spirit is becoming a little more systems driven so that it can get to the next level of

growth.”108 Lynn sums up her responsibilities over the past five-six years as “ …helping us

grow up from being sort of an adolescent organization to becoming kind of grown up.”109

Human Resources has been restructured and a centralized HR policy put into effect including standardizing the job posting process and compensation system. A succession program has been developed in anticipation of building on the strengths and assets of employees. The information technology services area is getting a facelift; development and maintenance of the structure and content of the intranet system is becoming more refined.

Shorebank Chicago is in the midst of restructuring and refocusing their priorities at the bank. A part of this process is to ensure different aspects within the bank work together and the holistic approach for community revitalization is being met. “ If we have a faith-based institutional customer we want to help the pastors meet the needs of their congregation so we’re providing credit-repair services and classes to their congregation-we’re helping them set up student accounts for the kids in the congregation…it’s also creating a whole new degree of integration across all the different parts of the bank…”110

Advantaged Business Lines

Shorebank contracted Boston Consulting Group in 2001 to assist in developing a growth plan for the organization. “ They came in and looked at us and turned us upside down and

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challenged us on what we were doing in terms of combining mission and profit.”111

Shorebank is in the midst of this change process which led to a very grassroots effort to realign the bank along its Advantaged Business Lines, or triple bottom line objectives for the institution. It is currently still in its implementation stage.

Marketing and Branding

“ We never had good marketing and we’ve never really had a coherent brand for the organization. We’ve never had the ability to promote ourselves very well.”112 Shorebank established a Marketing Department in 2000 and hired outside consultants in 2002 to create a marketing and branding strategy. They intend to provide more services and introduce a marketing and public relations program to promote themselves in addition to creating a campaign to help articulate their mission, directed at their customers. “ We did customer focus groups to get our customers’ perceptions on a variety of topics…it was just stunning to hear that our bank customers don’t have a clue about our whole mission piece…when we talk about it and promote it, it’s to people outside the neighborhood-potential depositors so we can send on the money to the people in the community…we’ve never explained to our customers, the ones in the bank lobby and loan customers how it is that we’re different from any other bank.”113 The marketing group has come up against some challenges and is in the

process of developing language to convey their message appropriately. “ When we talk to

the outside world we use terms like we work in ‘disinvested’ or ‘low-income’ communities

and we provide resources to people who wouldn’t otherwise get it…if you’re that person,

you don’t want to hear that.”114

Primary investors in Shorebank include foundations, faith-based institutions, philanthropists

and large banks receiving CRA credit; many have invested for over 25 years and will

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continue to do so. In order to keep growing, capital formation has been placed on the front burner. “ We want this bank to grow and we need to figure out a way to attract more and new capital, whether it be figuring out ways to go public, whether it be developing a very effective marketing campaign or something else…we basically want to broaden and diversify the range of capital investors.”115 Bob Nash is driving the development and implementation for the new marketing and branding program. They want more exposure as a mission based institution. “ My goal is for more customers, depositors, grantors, contractors and public policy makers to know about this institution…we need to talk more about our history and our record and by doing that, we will be able to attract more customers to increase our scale so we can have more impact for more people…what that will do is help to sustain this organization so that thirty years from now, we’re not a footnote in community development banking, we are still a leader in community development banking.”116

Nature of Organization i. The Culture

The organizational culture is reminiscent of the character and virtues brought in by the founders who have sprinkled the foundation with the spirit of perseverance, heart of commitment and soul of persuasion. The environment is saturated with feelings of openness, support and encouragement. It appears to be a tough environment but one that gives its members space. Employees admire the leadership qualities of the institution, which begins with a basic respect for the contributions of every employee. “ They’re not high and mighty people…they’re just people who will engage in intellectual conversation with anyone in the organization and who not only will do that but seek it out…they like talking to people who work here about the work that they do as much as they like talking about learning from people that work here.”117 Shorebank is a meritocracy at all levels and a relatively flat

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organization in terms of its power structure. True egalitarianism exists at Shorebank in

terms of access; there are no definitive lines between layers of the organization and people

are encouraged to join in dialogue. Free sharing of information and the ability for every

single employee to learn and maximize their potential is a quality that appeals to most

everyone. “ I really credit Mary Houghton for enjoining others because that is her basic life

philosophy and she’s imbued the whole organization with it.”118

Decision making is not done in a strictly hierarchical manner; input is solicited from its members in decision making processes. “ It’s Ron and Mary’s management style to try to use a dialogue and conversation and debate as a means of reaching consensus about what should happen…that’s both good and bad. From an efficiency standpoint, it can be slow and cumbersome…but it is also very rewarding in the sense that Ron and Mary have always been open to opinion and input from people…so you have the ability to influence based on your experience or your point of view…you can actually create, change or influence direction as a part of that process.”119

Until recently, Shorebank chose to hire atypical banking types. “It’s always been a fun thing,

and I think it says something about the character of the institution, too- it says something

about the dynamism of this place.”120 People who came to Shorebank with banking experience and expertise took time getting used to the corporate culture; they’ve since learned to become more flexible which at times has been challenging. “ When we hired more senior level people to come in from other banking institutions, they haven’t fit in very well…we have really found that we have needed to grow our people into becoming the agents for being able to do the work that we do.”121 Because Shorebank has begun

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streamlining their operations and are standardizing their operations, newer hires come in

with traditional banking knowledge and experience. It has become a function of their size

and scope.

Successful business practices at Shorebank are learned through the organizational culture; it

is about searching for viable opportunities and intuitively differentiating the good from the

bad. “ I think the culture is such that after several years, you develop the right way to do

things and people are just so skilled with their tools…our charge off rates are so minimal

that we have learned to make really good bets and making good bets has meant being very

entrepreneurial in putting together tool sets of technical assistance on more of an informal

nature between the banker and the borrower.122

Shorebank is a very people-centered institution and value competing principles such as

autonomy and collaboration. Persons take the initiative to create their own responsibilities,

method and style to achieve their goals. “ We talk about the natural tension between the fact

that we need to work together and get value from working together but we all still value

everybody’s capacity to develop something and run with it…this has been a hallmark of this

organization…”123 Innovation and experimentation has often been a driving force of development at Shorebank. “ Ron and Mary make a very wholesome unit…Mary for example, is very idea driven and she can help you translate that into action…they’re very young and excited…it’s just such a pleasure being with them because there’s nothing that you wouldn’t want to share…they’re here because they love being here. They love their projects and they always come in with new things!”124 Some ideas have not always been

successful yet opportunities to invent and experiment is accepted and supported. “ Ron and

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Mary believe in that- that you get some of your best ideas when you let people fly a little

bit.”125

The company seems to do well when individuals do well. Jennifer Tescher was interested in discovering how Shorebank could provide services to people who never used banks (many low-income communities live on cash). She left her position at Shorebank Chicago and moved over to SNI to participate in developing a pilot program for Individual Development

Accounts (IDA). This program was designed to assist low-income households with creating long-term savings options, contributions which are matched by either foundations or employers. The objective of this program was income supplementation and asset generation for its customers. Jennifer had no prior knowledge in knowing how to manage this type of project but she created the mechanics, structure and processes for the program. It was a huge success and now Shorebank has one of the largest IDA programs in the country- corporations have even contracted Shorebank to run IDA programs for their employees.

Jennifer moved on to work for the retail division in the bank and tried to make whole scale changes melding profit and mission for low-income customers. She got frustrated and went to work at Shorebank Advisory Services to help build models for doing similar, innovate project work for other community development financial institutions. “ We rewarded her for risk taking and for trying and for having a good idea…and we learned from her-we took the lessons from her experiences and incorporated them into our future actions so that we can really get to where we want to go anyway.”126

The strength and energies alive at the organization can be attributed to its people who want to be forever learning and growing personally, paralleling their desires for growth and

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development at Shorebank. “ Both in terms of the tools we use but also in the approach we

take using them…one of the great things about being here is that you learn just about

everything about lending…and you end up doing everything almost yourself…so by the time

you leave, you know the ins and outs of this business…and that allows you to be very good

at it.”127 Executive Management actively pursued a change in leadership at the bank in 1995.

Margaret Cheap was hired to replace her predecessor who was a competent manager but not

a leader of people. “ She really embodied this tension and cohesion and spirit of being the

best in the business and making a difference.”128 She was brought in as President of

Shorebank Chicago and made a big difference in the way employees perceived themselves and their presence in the community. Margaret was “…able to focus on peoples’ skills, talents and contributions…she was demanding but she had the people’s attention.”129 She was President for only three years, passing away due to illness. Anne Arvia succeeded her and has followed along the same path in her devotion to people, the community and profitability.

An entrepreneurial spirit can be found in most parts of the organization from Washington to

Chicago, Executive Management through to the middle management levels trickling down in small doses to the line persons. “ It’s certainly something that’s valued…it’s what has worked toward the success of the organization at the management level and decision-makers level- when you get to middle managers, I don’t know whether that’s their highest value but for the leaders of the organization even if they’re not senior management, I would say it’s important.”130 Heavier concentrations of experimentation may be found at SAS, SNI,

Shorebank Pacific and the Business Banking division in Chicago. “ At SAS they’re creating products for their clients whether it’s a bank in Louisville or a nonprofit in

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Romania…they’re trying to solve problems and come up with things so they’re constantly

creating and it might not be anything we’ve done before…we don’t like to follow anybody

else’s rules- we’re an independent sort of bunch.”131

The issue of practicality has always been a mainstay form of discussion at Shorebank. “ In the end most of the things that are idea based don’t make it in the real world…in the first ten years, we had lots of trial and error which were tried and errored- it was a gruesome time.”132 Over the past three decades, an infinite number of ideas have come and gone and

countless strategy papers, case studies, books and other published materials written about

the organization. When all is said and done, the strength of Shorebank has been to focus on

what works and shift its resources in that direction. “ We are about profitability. We are

about good credit. We believe you can do both things and also serve communities and give

people opportunities and access that they hadn’t had before…some people understand it in

theory but when it comes to the difference in approving a loan, it can be more difficult…this

lends itself to Shorebank employees being more creative, innovative and yet still remain

disciplined.”133 Management members have market and business discipline embedded into

their methods of conducting business; entrepreneurially, they are able to combine market

discipline with the desires to positively effect communities and people in their priority

markets. “ There is definitely an inculcation of market discipline that leads to a future

viability of not only the organization but the communities we serve…it’s not short-term. I

think it is a very grounded and strategic long-term vision of how to effect the sort of change

that we’re committed to…bottom line, the better we are at doing business, the better we are

at making a difference in our communities…it’s not compromising how we do business. It’s

being better in the business in order to do what we want to do.”134

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Shorebank offered a program to finance rehabbers in hopes of restoring market forces in the

neighborhood; their goal was to make it a healthy market. Customers rehabbed buildings,

the market grew and more clients wanted to build which created more financing for

Shorebank. If a project were tried and errored, it would be time to regroup; the undertaking

on 71st Street would exemplify this point. Three lenders worked full-time on making loans

to merchants and hired people to help with design and inventory control in the area. “We

were trying to build some momentum on this one commercial strip…we were trying to

stimulate market forces but at the end of that process, we really understood that if there

wasn’t some market, there was nothing to stimulate…and so that really was ingrained into

the organization- there are ideas and then there is effort but there’s got to be some kind of

market opportunity or need.”135 At the end of the day, this project failed and Shorebank went in search of newer alternatives. ii. Values

Shorebank is an institution that openly promotes and acknowledges its mission. “ There’s real integrity in everything we do. We do it straight-forward, directly, non-secretively. We’re transparent.”136 They have continued to rely on a set of core principles and have not deviated a great deal from that. The strength of the organization was built around the mission to serve development in communities. “ We walk our talk…”137 Shorebank companies

established themselves in underserved areas; banks are primarily located in either inner cities

or deprived rural locales. They promote themselves as a mission based institution rather

than a banking institution and the triple bottom line strategy has been adopted, supported

and nourished by the entire corporation. “ It’s just the underlying set of values and beliefs

that the organization subscribes to and it permeates from there…it’s what attracts talent to

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the organization…and it’s ingrained into the fabric and culture of the entire

corporation…it’s unlike any for-profit institution I’ve met!”138

Entrepreneurialism and Creativity

The core activity at Shorebank is lending and it is important and necessary to be creative

when achieving the dual purpose of serving both sides of profit and development

(community and conservation). “ There’s been a strong interest on the part of Ron and

Mary, primarily, but for all of us to hire entrepreneurial types who are creative and who are

not limited by convention.”139 Corporate goals are ever changing and rapidly expanding to incorporate a more holistic perspective. “ To be really successful at Shorebank, you need to be a little creative. You need to be able to try something, and we’re tolerant of it. We’re still entrepreneurial in that sense.”140 Shorebank invests for both economic and social returns;

they have created an atmosphere that invites employees on the ground level straight through

to the management level to be entrepreneurial, resourceful and innovative. “ Innovation is

bred here…it’s certainly a part of our history and it’s part of who we really want to be…we

always want to be more effective at it.”141 The result is growth, expansion and community

development. “ This place is eclectic. It just emotes and sort of grows and grows and grows

from the diversity of its businesses to the people who work here.”

Empowerment and Financial Tools

The core of the organization according to Leana Flowers, captures the abilities to empower

people and build capacity. “ In this company employees are encouraged to contact us…we

work with the managers and we work with the employees…we try to help the employee

become empowered…”142 A performance based incentive plan is applied across all levels of

job classifications and any member at any level is entitled to a bonus based on their

performance. From the middle management levels, the plan incorporates goals that relate to

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profitability and development; those who achieve triple bottom line success are eligible to

receive a bonus, and achieving one without the other does not qualify.

Shorebank uses the business of finance and credit to stimulate growth in communities in

order to build and provide opportunities- a holistic approach to economic development. “

You teach people and you give them the tools and let them go. You show them how to

grow rice; you don’t give them bags of rice, but you show them how to grow it…that’s the

core.”143 The focus is on changing a system rather than simply providing solutions.

Shorebank succeeds in positively impacting housing, credit, small business, literacy and

education. Shorebank is in the business of building healthy communities. “ We act as a

catalyst, once we get the ball rolling then we start building capacity, then the communities

can start growing on their own…we partner with the community rather than acting in it.”144

Shorebank makes loans for multi-family housing that generates livable rental apartments. It builds up the housing maintaining the housing stock and has a ripple effect. SNI tries to work with the community on wealth creation, employment and financial education as part of the package. Affordable housing is a must in order to create wealth for development in the community.

Diversity

Diversity is highly valued at the organization but in some areas that lack large minority groups such as Portland, Oregon, it gets more difficult to incorporate diversity as a mandate in the human resource structure. “ When we do offer promotions, we literally count and make sure it’s majority black or at least 50/50…in the Chicago bank, 50% of the senior management team is African American, 60% of the officers of the bank are African

American and then 80% of the all the employees are African American.”145

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iii. The People at Shorebank: A multi-talented ad hoc work force

Mary is described by some as the maternal person in the organization. “There are a lot of

people wandering the earth looking for work that they think is important and good-and

looking to join people who they like to work with…and we’ve hired a lot of people like that

at Shorebank.”146 Richard Taub, referring to the first decade in the life of Shorebank, sums up the reality of the kinds of people working at the organization. “Most INDC (referring to

Shorebank pre-1986) personnel are not orthodox bankers. They are smart people found in other worlds, trained by management, and then encouraged to be creative. There is the sense that because they come to the task with few preconceptions, they are able to forge new instruments and devise new tactics.”147 David Oser began as a part-time teller while he was

working on his Ph.D. in English; he has been with the bank for almost twenty-seven years

and now manages approximately $500 million in assets on the investments side of the

business. Jim Bringley worked as a telephone operator for Illinois Bell before coming to

Shorebank; he now runs the real estate division. “ There’s people like Beth Wagner who was

working for a Roman Catholic organization that was committed to social causes…Roz

Avarette was a social worker, Paul Carson was working for an insurance company and Toya

Perry was with one of the largest African American churches in the city of Chicago…so they

brought in all these people who really didn’t know anything about banking and said, ‘Well

let’s just figure it out.’”148

George Surgeon came to Shorebank in 1976 as a graduate student pursuing his Ph.D. He

received a fellowship from his Professor, Richard Taub and began conducting research at

the bank which turned into an internship and eventually led to a full- time position.

Academic life no longer appealed to him. “ I was much more interested in problem-solving

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activities than in academic, theoretical kinds of studies…I found that my personality or my

capabilities really fit the kind of task that you’d find in a commercial bank.”149 He was attracted to the bank because of its dual purpose and he enjoyed the challenge. “Not only did you have to figure out if could you lend the money out and get repaid…but then you had to analyze what it did for the community, whether it would be positive for the community and if it would create or enhance the economic development in the community.”150 Almost twenty-seven years later, he still remains with the organization in his current role as Chief Financial Officer and Executive Vice-President of Shorebank

Corporation.

Leana Flowers came to Shorebank in 1980 from her previous position as a banker; she wanted to join the lending division but no positions were available. Shorebank was just getting to the point of critical mass in terms of employees (hovering around 100) as they had just started the non-profit affiliate (TNI/SNI) and real estate development company. They were interested in hiring a full-time person to develop the Human Resources Department;

Leana knew nothing about personnel but was hired in spite of that. “ This place is notorious for that…hiring people who aren’t necessarily skilled at the job they take…lots of people take a job somewhere in the corporation because they just want to be here.”151 In addition

to her current position as Senior Vice-President and Director, Leana has recently taken on

the responsibility of running the retail banking division corporate-wide. “ The reason I stay

here first, is that the place changes so it’s not the same job…we started expanding a little bit

and then we’d make these big leaps and started three different companies…so it just kept

changing that way…I’ve stayed because I’m still committed to the mission…it’s an

organization that’s based on sort of a team consensus decision-making process, which makes

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it laborious but it does allow input. So I have input and influence and you can be yourself

here which is the most important thing to me…I like what I’m doing, I believe in what I’m

doing and I don’t have to put on a front.”152

Beth Wagner came to Shorebank by chance and has been with the organization for over twenty-five years. Prior to joining she helped found a social justice organization and lobbied in Congress. She has spent most of her life fighting the causes or creation of injustice. She highly admires and respects Shorebank. “I thought of it as a good example of an institution that worked within the systems and accomplished good within those systems…and I didn’t have a lot of respect for many of the systems that society has for dealing with human needs and human beings.”153

She has done a variety of things at the bank since arriving in 1978. At first she had a

teaching role and was responsible for developing programs designed to educate other

bankers and non-bankers about Shorebank activities in order to disseminate that knowledge.

“ It was this idea that we’re learning something. We’ve been doing this now for a few years

and let’s start figuring out how to share some of that information in an organized kind of

way…we had a program for non-bankers and got funding for that.”154 After about six months she moved over to the developmental lending department to assist in making commercial loans, primarily to nonprofits. Shortly afterwards, she set up a separate unit in the real estate department to process mortgages for the new condominium project and spent four months hiring people and putting the department together. Beth wanted to learn more about business banking and went into commercial lending for about five-six years. “ I sort of did our first expansion and our last expansion in the start-up mode…”155 In 1987,

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Shorebank opened its first branch office Austin and Beth was asked to manage it. From

1995-97, Beth acted as the chief liaison with the EBRD for the project work in Russia. In

1997, Beth spent six months out in the Pacific Northwest to get Shorebank Pacific up and

running and managed it until they hired their first president. When she returned to Chicago,

she worked on a micro loan program, Women Self Employment Project (WSEP) for four

months assisting them to reorganize their loan program.

At the end of 1997 Shorebank Development Chicago made the decision to outsource their

property management division.. As soon as this was announced, its manager resigned and

Beth stepped in to manage the properties for six months while simultaneously phasing out

the property management division. In 1999, the President of Shorebank Pacific resigned and

Beth was asked to manage the headquarters in Washington and the Portland office while

commuting back and forth to Chicago. At the time, she still had responsibilities in Chicago

for the company conversion of the new computer system. In early 2002, after the

conservation policy was adopted corporate-wide, Beth took on the responsibility to ensure

conservation becomes integrated into the fabric of the organization. At present, this is her

primary responsibility. She values the opportunities she has been given. “I wouldn’t be here

as many years if I hadn’t done so many things…I really want something that makes a

difference and if I can see the connections and I know it’s happening, that’s important to

me. Would I work for an organization that didn’t have this commitment and valuing?

No…that’s what brought me here and that’s the only reason I stay.”156

Lynn Railsback always wanted to work in the inner city in hopes of making a positive impact in communities. She felt strongly about working for a for-profit institution. “ I had been

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doing a ton of volunteer work…I was trying to simplify my life by having my job be more rewarding in terms of making the world a better place but then I would be doing another 20-

30 hours of work above and beyond my job…I specifically started out working with a program to teach kids at a very young age, work habits and skills, and I’d done a lot of grant writing…I think I just didn’t want to deal with the fatigue of always trying to go out and raise money…and because I had done a project in graduate school about Shorebank, that’s the first thing that came to mind.”157 She contacted the bank when they were expanding to

Austin; the timing was right as they were hiring more staff and in 1987, she joined

Shorebank Development, Chicago.

Lynn had experience working with real estate development before coming to Shorebank.

Her initial responsibilities included buying and rehabilitating buildings and eventually managing properties and rental portfolios. She went on to establish a social service program for low-income residents and almost ten years later, her focus shifted from dealing directly with customers to working primarily on inter-organizational issues. She describes herself as the ‘worker bee’ and spends most of her time laying out processes and pulling pieces together to make a coherent whole. “ I may not have the big idea but I can connect the dots and then I can help mobilize people for the changes to happen.”158

Lynn knew she’d enjoy working at Shorebank. “ It was entirely the combination of a mission-oriented institution with a for-profit source of income…that’s just what I found was interesting.”159 She gets bored easily and enjoys the opportunities to create projects at

Shorebank. “ It’s the sort of place where if you come up with an idea and you can convince somebody that its’ worth testing-then you can just go off and try it…that’s always been very

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attractive to me…I’ve been able to perpetually take on new projects hand them over to

people and watch others grow them better than I ever could…it’s the perfect place for

me!”160

Before joining Shorebank, Bob Nash accepted a high level position with a Fortune 500

company. Ron contacted him and insisted he join Shorebank. Bob told him he was

unavailable yet Ron was persistent. “ Ron Grzywinski did not accept that. He said, ‘We

know you. You know us. You need to work for us.’ I told him I had already accepted a

position and he said ‘ Well, I’m sorry to hear that.’ And he kept talking to me and talking to

me and eventually he said ‘Come visit us. Come to Chicago.’ I did…and Ron talked about

his vision…he talked about it with passion, about how much he cared about this institution

and how it was literally changing the world… he talked about it and I could see it and I

could feel it…it wasn’t a job, it was like a mission. That turned me on…I learned even more

about what they were doing and got so excited that I came to work for the bank because of

what it does…I believe in this institution and its mission and the fact that a for-profit

institution had a social mission.”161

Bob joined Shorebank in 2001, the newest of the recruits. He was brought into a leadership position to build the strength and capacities of Shorebank for the future. He is convinced that Shorebank and similar banks like it can set an example for other for-profit financial institutions, in particular, profitable banks that serve underserved communities and populations. His background includes community and economic development, philanthropy, development finance and politics. He worked at the White House from 1993-

2001 for President Clinton, first as a political appointee in the role of Undersecretary of

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Agriculture and then was asked to find political appointees to help run the federal

government. He has been affiliated with Shorebank since 1985. “ Ron knows that I hold the

mission of this organization near and dear to my heart...most people around here would say

that I care more about the development mission than profitability, but they’d also say I have

an appreciation that without profitability, you can’t do development…”162

In the short time Bob has been with Shorebank, he identifies with the culture, mission,

values and people. “ I love this place and the people…the people here work not just for a

salary because many of them could make much more money other places. They work here

because they like the people they work with. They like the mission that we’re taking a

private for-profit institution and serving a social purpose and we’re making money doing

it…and that’s why I like being here.”163 He is currently Vice-Chairman of Shorebank

Corporation.

Steve McConnell describes himself as a child of the 60’s which is pretty self-explanatory. He

was affected by the political climate of the era, had a strong sense of equality and interest in social opportunities and ended up heading toward that path in life. “ I was certainly affected by the times in my formative years, as there are some things pretty deep inside of me…although I’m classically trained in public accounting and I worked for for-profit institutions when I was younger in my early career… I think that only reinforced the desire to be motivated by more than just being a profitable institution.164

Steve has not functioned as a CPA since the 1980’s. He worked for a regional development

finance organization (NCIC) for about fifteen years doing economic development work in

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the New England area and met Ron and Mary at various times during his term with the

organization. They were planning to develop Shorebank BIDCO and given Steve’s

experience in this type of investing in rural areas, asked him to come set it up and manage it.

“ Frankly, I turned them down as I had done that already and really wasn’t looking to

relocate to Northern Michigan to do the same thing again...but Ron and Mary can be very

persuasive.”165 Steve began with Shorebank in 1992 yet worked with them during the previous year getting funding together. He relocated to Upper Peninsula of Michigan, put staff in place and spent eighteen months getting it off the ground.

In 1993 he moved to Chicago to establish the CFO office and started to build an accounting and finance department for the holding company to support their expansion to other geographical areas. “ Prior to my move, the organization was still very Chicago-centric around the bank and the holding company was still in a fledgling state.”166 He became part

of the team that assisted in developing wholly-owned subsidiaries. “ In ’94 we raised the

capital and started operations in Cleveland; in ’95 we expanded the bank in Chicago; in ’96-

’97, we began operations in Detroit and about the same period-’97, we started operations on

the West Coast.”167 He has always enjoyed the opportunities to work on new initiatives and

new directions for the organization and presently acts in a consulting capacity with

Shorebank. His other various roles during his 10+ years with Shorebank include overseeing

the Detroit expansion, working with non-bank companies around investing and lending

activities, risk management and strategy planning.

Steve believes that Shorebank has a business discipline beyond most nonprofits in surviving

off its’ profit structure and has always valued its dual purpose. “ Even in the early ‘90’s,

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Shorebank was widely recognized as a leader in development finance…there were CDC’s at the time (Community Development Corporation- a nonprofit community based organization involved in development finance) and several other models but Shorebank was unique in that it was really a full commercial development bank- it was a unique structure back then…that was very intriguing to me and was part of my attraction to the organization- that, and my relationship with Ron and Mary. I liked them as people and I liked their values.”168

Jean Pogge worked in the private sector for an insurance company immediately out of college and at the end of that career, found herself at odds with management because her values were inconsistent with theirs. She quit the position, went to graduate school and learned about community development. She worked at the Woodstock Institute (national nonprofit network on community reinvestment) and eventually became its President. “ I switched the agenda from one of advocacy around community reinvestment acts to one of policy around this sort of odd collection of institutions…Shorebank, community development credit unions, some community loan funds and micro-credit start ups.”169

After awhile, she missed the private sector and the tangibility of business goals and went in search of a job. Ron offered her several positions at Shorebank, including running the nonprofit and managing development deposits; she was also offered various other positions with major financial institutions in Chicago. “ It was a core values decision for me…and having had experience in both mission-based work and for-profit, I decided that I would be happier personally if I took the Shorebank job offer, so I did.”170 She began with Shorebank in 1993 to manage development deposits.

Jean has never regretted her decision to come to Shorebank. “ I feel lucky that I’m able to

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be in a place where I call myself an un-medicated schizophrenic because I really love

business and I love producing profitability but I cannot do that without values and without

mission…and so Shorebank is one of the very few places that you can do both…it’s a

wonderful place to work!” She talks about the founders with great fondness and zeal,

portraying them as her personal heroes. “They are just incredibly smart and they also really

made personal sacrifices. Ron could have been a very, very wealthy man and he chose to do

this with his life…and Mary, too. Every single one of them had options of what they could

have done with their life and they chose to do this and create this institution…that

wonderfulness also became problematic at some point…we had to institutionalize

Shorebank. At first it was very much a family business really passionately committed to a

mission…and then it had to become an institution to continue to succeed…that’s a long

story but basically, all of it came with lots of sacrifice!”171

Puchka Sahay, a woman of Indian origin grew up in New York and spent her last two years of high school at a place called Woodstock in the Himalayan mountains. Out of curiosity she decided to volunteer for Mother Theresa’s Home for the Dying and Destitute which changed her life significantly. “It gave me a whole different level of awareness about the world…we toured the leper colonies…and I saw these human beings happy within themselves…and I knew at that time that I really wanted to make a difference in people’s lives.”172 She came back to America and went to undergraduate school at a very progressive,

socially conscious university. She moved to New York and worked in the garment industry,

choosing instead to pursue graduate education in public policy and business. “ I just think

it’s a whole evolution and exploration of trying to find what fits and what feels really

right.”173 She dreamt about working at the intersection of banking and economics and

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happened to meet Ron who suggested she visit Chicago. “ I went to Chicago and met Mary

and she asked me if I had ever worked at a bank. And I said ‘No. But that’s not

important’.”174 Puchka started with Shorebank in 1996 in the Detroit office and moved to

Chicago nine months later. In her very unassuming nature she describes herself to be a line person working very much at the ground level. She provides loans to persons in the neighborhood which produces profit and facilitates re-investment back into preserving a healthier community.

Puchka believes Shorebank has made her more realistic, more patient and less intense. “ I continue to find things that help me grow…I can’t imagine working in another development institution.”175 She values the flat organizational structure and appreciates that Shorebank is not overly structured. “ The good side of it is that for people who are very motivated, it’s a great place because you can learn the tools and then the organization allows you to discover what it is that you like applying those tools toward…within our sort of disciplined business environment is lot of room for personal growth in learning what you want to become.”176

She enjoys working with her colleagues who have similar values. “ I think it’s a much more comfortable environment for me, personally…and because of that comfort level I’m able to be who I am-and that gives me a lot of confidence in being creative.”177

1 ‘Shorebank’ herein will refer to Shorebank Corporation holding company, unless otherwise noted 2 Conversation with Ron Grzywinski, 01/13/03 3 Conversation with Ron Grzywinski, 01/13/03 4 Conversation with Ron Grzywinski, 01/13/03 5 Conversation with Ron Grzywinski, 01/13/03 6 Conversation with Ron Grzywinski, 01/13/03 7 Conversation with Ron Grzywinski, 01/13/03 8 Conversation with Ron Grzywinski, 01/13/03 9 Conversation with Ron Grzywinski, 01/13/03 10 Conversation with Ron Grzywinski, 01/13/03 11 Conversation with Mary Houghton, 01/13/03 12 Conversation with Mary Houghton, 01/13/03

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13 Conversation with Mary Houghton, 01/13/03 14 Conversation with Mary Houghton, 01/13/03 15 Conversation with Richard Taub, 01/14/03 16 Conversation with Ron Grzywinski, 01/13/03 17 Conversation with George Surgeon, 01/13//03 18 Conversation with Ron Grzywinski, 01/13/03 19 Conversation with Richard Taub, 01/14/03 20 Conversation with Mary Houghton, 01/13/03 21 Conversation with Lynn Railsback, 01/15/03 22 Conversation with Richard Taub, 01/14/03 23 Conversation with Mary Houghton, 01/13/03 24 Conversation with Mary Houghton, 01/13/03 25 Conversation with Richard Taub, 01/14/03 26 Conversation with Jean Pogge, 01/28/03 27 Conversation with Ron Grzywinski, 01/13/03 28 Conversation with Ron Grzywinski, 01/13/03 29 Conversation with Mary Houghton, 01/13/03 30 Conversation with Mary Houghton, 01/13/03 31 Conversation with Bob Nash, 01/15/03 32 Conversation with Mary Houghton, 01/13/03 33 South Shore National Bank became South Shore Bank when it was purchased by INDC in 1973 34 Community Capitalism, p.19 35 Conversation with Jean Pogge, 01/28/03 36 Conversation with Ron Grzywinski, 01/13/03 37 Management changed the name of INDC to Shorebank Corporation in 1986, when they decided not to limit their activities to Illinois 38 Conversation with Ron Grzywinski, 01/13/03 39 Conversation with Jean Pogge, 01/28/03 40 Conversation with Mary Houghton, 01/13/03 41 Conversation with Mary Houghton, 01/13/03 42 Conversation with Bob Nash, 01/15/03 43 Conversation with George Surgeon, 01/13//03 44 Conversation with Jean Pogge, 01/28/03 45 Conversation with Bob Nash, 01/15/03 46 Conversation with Jean Pogge, 01/28/03 47 Shorebank Corporation: A Brief History, p. 1 48 Conversation with Jean Pogge, 01/28/03 49 Conversation with Beth Wagner, 01/14/03 50 Conversation with George Surgeon, 01/13//03 51 Conversation with Steve McConnell, 01/21/03 52 Conversation with Leana Flowers, 01/13/03 53 Conversation with George Surgeon, 01/13//03 54 Conversation with Bob Nash, 01/15/03 55 Conversation with Bob Nash, 01/15/03 56 Shorebank Corporation: A Brief History, p. 3 57 Shorebank Corporation: A Brief History, p. 3 58 Shorebank Corporation: A Brief History, p. 3 59 Conversation with Beth Wagner, 01/14/03 60 Shorebank Corporation: A Brief History, p. 3 61 Adopted from Shorebank Corporation: A Brief History, p. 3 62 Conversation with Richard Taub, 01/14/03 63 Conversation with Lynn Railsback, 01/15/03 64 Conversation with Leana Flowers, 01/13/03 65 Conversation with Beth Wagner, 01/14/03 66 Conversation with Beth Wagner, 01/14/03

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67 Conversation with Lynn Railsback, 01/15/03 68 Conversation with Lynn Railsback, 01/15/03 69 Conversation with Lynn Railsback, 01/15/03 70 Conversation with George Surgeon, 01/13//03 71 Conversation with George Surgeon, 01/13//03 72 Conversation with George Surgeon, 01/13//03 73 Conversation with Steve McConnell, 01/21/03 74 Conversation with Steve McConnell, 01/21/03 75 Conversation with Steve McConnell, 01/21/03 76 Conversation with Ron Grzywinski, 01/13/03 77 Conversation with Bob Nash, 01/15/03 78 Conversation with Bob Nash, 01/15/03 79 Conversation with Steve McConnell, 01/21/03 80 Conversation with Beth Wagner, 01/14/03 81 Conversation with Jean Pogge, 01/28/03 82 Conversation with Jean Pogge, 01/28/03 83 Conversation with Steve McConnell, 01/21/03 84 Conversation with Bob Nash, 01/15/03 85 Conversation with Jean Pogge, 01/28/03 86 Conversation with Leana Flowers, 01/13/03 87 Conversation with Steve McConnell, 01/21/03 88 Conversation with Steve McConnell, 01/21/03 89 Conversation with Beth Wagner, 01/14/03 90 Conversation with Puchka Sahay, 01/29/03 91 Conversation with Beth Wagner, 01/14/03 92 Conversation with Puchka Sahay, 01/29/03 93 Conversation with Mary Houghton, 01/13/03 94 Conversation with Beth Wagner, 01/14/03 95 Conversation with Steve McConnell, 01/21/03 96 Conversation with Nicole Kirkwood, 01/13/03 97 Conversation with Steve McConnell, 01/21/03 98 Conversation with Leana Flowers, 01/13/03 99 Conversation with Steve McConnell, 01/21/03 100 Conversation with Leana Flowers, 01/13/03 101 Conversation with Bob Nash, 01/15/03 102 Conversation with Beth Wagner, 01/14/03 103 Conversation with Beth Wagner, 01/14/03 104 Conversation with Steve McConnell, 01/21/03 105 Conversation with Lynn Railsback, 01/15/03 106 Conversation with Lynn Railsback, 01/15/03 107 Conversation with Bob Nash, 01/15/03 108 Conversation with Puchka Sahay, 01/29/03 109 Conversation with Lynn Railsback, 01/15/03 110 Conversation with Lynn Railsback, 01/15/03 111 Conversation with Steve McConnell, 01/21/03 112 Conversation with Lynn Railsback, 01/15/03 113 Conversation with Lynn Railsback, 01/15/03 114 Conversation with Lynn Railsback, 01/15/03 115 Conversation with Bob Nash, 01/15/03 116 Conversation with Bob Nash, 01/15/03 117 Conversation with Jean Pogge, 01/28/03 118 Conversation with Jean Pogge, 01/28/03 119 Conversation with Steve McConnell, 01/21/03 120 Conversation with Beth Wagner, 01/14/03 121 Conversation with Puchka Sahay, 01/29/03

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122 Conversation with Puchka Sahay, 01/29/03 123 Conversation with Beth Wagner, 01/14/03 124 Conversation with Puchka Sahay, 01/29/03 125 Conversation with Leana Flowers, 01/13/03 126 Conversation with Jean Pogge, 01/28/03 127 Conversation with Puchka Sahay, 01/29/03 128 Conversation with Puchka Sahay, 01/29/03 129 Conversation with Beth Wagner, 01/14/03 130 Conversation with Beth Wagner, 01/14/03 131 Conversation with Nicole Kirkwood, 01/13/03 132 Conversation with Mary Houghton, 01/13/03 133 Conversation with Leana Flowers, 01/13/03 134 Conversation with Puchka Sahay, 01/29/03 135 Conversation with Mary Houghton, 01/13/03 136 Conversation with Jean Pogge, 01/28/03 137 Conversation with Bob Nash, 01/15/03 138 Conversation with Steve McConnell, 01/21/03 139 Conversation with Steve McConnell, 01/21/03 140 Conversation with Leana Flowers, 01/13/03 141 Conversation with Lynn Railsback, 01/15/03 142 Conversation with Leana Flowers, 01/13/03 143 Conversation with Leana Flowers, 01/13/03 144 Conversation with Leana Flowers, 01/13/03 145 Conversation with Jean Pogge, 01/28/03 146 Conversation with Mary Houghton, 01/13/03 147 Community Capitalism, p.140 148 Conversation with George Surgeon, 01/13//03 149 Conversation with George Surgeon, 01/13//03 150 Conversation with George Surgeon, 01/13//03 151 Conversation with Leana Flowers, 01/13/03 152 Conversation with Leana Flowers, 01/13/03 153 Conversation with Beth Wagner, 01/14/03 154 Conversation with Beth Wagner, 01/14/03 155 Conversation with Beth Wagner, 01/14/03 156 Conversation with Beth Wagner, 01/14/03 157 Conversation with Lynn Railsback, 01/15/03 158 Conversation with Lynn Railsback, 01/15/03 159 Conversation with Lynn Railsback, 01/15/03 160 Conversation with Lynn Railsback, 01/15/03 161 Conversation with Bob Nash, 01/15/03 162 Conversation with Bob Nash, 01/15/03 163 Conversation with Bob Nash, 01/15/03 164 Conversation with Steve McConnell, 01/21/03 165 Conversation with Steve McConnell, 01/21/03 166 Conversation with Steve McConnell, 01/21/03 167 Conversation with Steve McConnell, 01/21/03 168 Conversation with Steve McConnell, 01/21/03 169 Conversation with Jean Pogge, 01/28/03 170 Conversation with Jean Pogge, 01/28/03 171 Conversation with Jean Pogge, 01/28/03 172 Conversation with Puchka Sahay, 01/29/03 173 Conversation with Puchka Sahay, 01/29/03 174 Conversation with Puchka Sahay, 01/29/03 175 Conversation with Puchka Sahay, 01/29/03 176 Conversation with Puchka Sahay, 01/29/03

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177 Conversation with Puchka Sahay, 01/29/03

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Narrative 2: Cooperative Home Care Associates

Prologue Rick Surpin -A Backward Glance

The Beginning The Early Years Visceral Synergies Peggy Powell A Collective Sum of Resources

The Organization Entrepreneurial Wisdom Paraprofessional Healthcare Institute Organizational Protocol A Cooperative Structure Governing Bodies An Industry Anomaly A Yardstick Corporation

Transformation Michael Elsas Trial and Transitional Leadership Organizational Paradox

Evolution Replication Efforts ICS Unionization Tentacles in the Field Unknown Territory

Nature of Organization A Community Values The Culture The People A Recipe for Creation- In Retrospect

The Future

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Counterintuitive Development

Transformative cooperation leading to cooperative transformation of an organization and its industry can very well describe the evolution of Cooperative Home Care Associates (CHCA) from its inception through to its future possibilities. A for-profit organization spun-off from a non-profit entity was conceived and various mutations of its intended course of direction have occurred along the way. What began as a vision has transpired into a model organization committed to developing the human spirit through providing quality service and care for its constituencies, including its workers, clients and ultimately the industry through public policy advocacy and reform.

CHCA, based in the South Bronx is a worker-owned cooperative home care agency that provides paraprofessional services to residents in New York City. The entire workforce consists of low-income minority women (mainly African-American and Latino) and approximately 70% of these members were dependent on public assistance prior to their employment. For many becoming a part of CHCA has been a blessing, a sentiment that permeates the air at their offices. As for the founding members, the development of the organization has been rewarding in terms of making progress in achieving its social goals.

And the home care industry? It has been turned upside-down in response to the progressive nature of CHCA, an energetic organization which embodies the mantra of promoting quality care for its clients and quality jobs for its people.

Rick Surpin

Rick Surpin is the founder and visionary of Cooperative Home Care Associates and in conjunction with others, has brought the organization to life. He is extremely soft-spoken and has a gentleness about him, exposing an understated subtleness in his demeanor. He is

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filled with a self-deprecating sense of self yet his intuitiveness shines through in his eyes,

making him somewhat complex. Inside, he is strong, determined and willful. His self-

effacing nature is laced with value driven, principle-oriented convictions all of which

contribute to his intimidating yet forbearing personality. Part of his entrepreneurial spirit has

come from his own personal evolution and part from his counterintuitive ability to sense

what should be. He has an innate capacity to creatively respond to the needs of others and

his instinct for focusing on the sum of the parts has created an even greater whole. His

experiential learnings have been consequential to his hopes and vision for a better society,

playing a major role in the inspiration and subsequent maturity of CHCA. “My vision was a

result of lots of cumulative experience but also mostly negative experience that made me

think about what I really wanted…and that drove me.”1

A Backward Glance

Rick’s values stem from his childhood, college experiences and employment with community action and development programs, which has influenced his life and entire being. He came from Russian-Jewish descent and was born second generation American, growing up at a time when race was a cutting edge issue in America. A youth during the Civil Rights era and college-bound during the Vietnam War, he grew up in a working-class apartment building located in a middle-class community and worked for his father’s family wholesale food business in his formative years. He developed a great deal working for his father, learning how to intuitively detect a need and productively responding to it which has contributed to his entrepreneurial creativity. Ultimately, these and other experiences led to his nascent social conscience and sense of equality providing a platform for his future. “ I’m a class outsider that feels very much like somebody who doesn’t belong and yet has the appearance of looking like they do. And so I’ve dealt with that by living in borders a lot…I grew up in a

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family that had very middle-class values but working class income…I didn’t really belong

with the other middle-class kids and felt an automatic sense of being outside…I liked to read

and I was quiet and serious. I just didn’t feel like I fit anyplace and it was very hard to find

people who cared about what I cared about. Being Jewish at the time, you could choose one

of two very specific divergent paths…and I chose the one to be very conscious in the sense

of other.”2

Rick rebelled against the middle-class Jewish culture and chose to attend a Catholic university. “Nobility in many ways comes from the rejection of something else…it comes from the rejection of traditional education and then imagining what could be different that would speak to me.”3 He became very knowledgeable about education reform and was increasingly becoming more public about his ideas. Somewhere along the way he gained strength and voice about his opinions and simultaneously, became more learned. “I just had a feeling of self and was really comfortable in the borders with those who were attracted to my ideas and vice versa…I developed a good skill at asking lots of questions and listening-it became a survival skill. If I listened I could keep the conversation going by asking enough questions and I learned a lot in the process.”4

After undergraduate school Rick assumed he would work for a community development

corporation in an all White working-class neighborhood but ended up taking a position with

a neighborhood youth corps in an all-Black community action program. “So it was a

question of how do I fit in here as a White person who believes in Black self-

determination… I became good friends with Ellsworth, the Director who is Black and he

took me under his wing and basically treated me as if I were his brother. He was a very

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respected leader in the community and he taught me that I could be comfortable being on

the street corner in a ghetto and be myself and not have to act like I was somebody

different…that was a huge gift.”5 Eventually Rick became Assistant Director of the agency

and was the only Caucasian person in an administrative position. In due course he was

asked to become its Director and initially denied the position. “I felt that we should work to

have more people who are Black and more people who are White on the board and if we did

that, then I could become Director. I was more nationalist than some of the people in the

leadership on the board. I thought it was a terrible statement about the lack of resources in

the community and I didn’t feel a White person should be the Director of an all Black

agency. ”6 Ultimately he was approved by the all-Black member board and assumed the

Directorship. Today, Ellsworth works hand in hand with Rick at Independence Care System and yes, Rick is the Chairman of the Board of a minority-owned organization. How does he fend off criticism for this ideological contradiction? He replies, “I was here first. And if the people didn’t want me to be here then I wouldn’t be here. But because of some ideological principle, no one can tell me I shouldn’t be here. It’s realistic and practical and ideology doesn’t work here. Cooperative Home Care is grounded on peoples’ needs and realities and it’s right here. It feels right.”7

The Beginning

Community Service Society (CSS), a non-profit social service organization based in New

York created a Center for Community Economic Development in 1982 to create jobs for

low-income people. Conceptually the idea was to begin a program to fight poverty by

empowering economically disadvantaged members of the community; all that remained was

figuring out how to do it and finding a vehicle to do so. Rick Surpin was hired to manage

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the Center and initially focused his efforts on refining the organizational directive. ‘During that first year, Rick helped clarify the Center’s purpose: to create for low-income people

“good jobs”-jobs with adequate wages and benefits, decent working conditions, employment stability and opportunities for career advancement. Rick then chose worker-owned start-ups as the form within which to create those “good jobs.” He believed the worker-ownership structure would enable the business to maximize wages and benefits. He also believed it would encourage greater self-esteem and responsibility within the work force, and at the same time anchor the new businesses deeply within the local community.’8 Soon afterwards the Center began taking shape. Rick was joined by four staff members from CSS including

Fred Grumm and Jerry Polner who had been involved in technical assistance and policy work, Tom Bettridge whose expertise was financing and former co-worker Peggy Powell, an education specialist. Together this foursome began sculpting the framework for creating new worker-owned social enterprises that focused on community development activities in

New York City.

After a long, arduous planning process in developing the cooperative structure and starting a small carpentry business that ultimately failed, the Center concentrated its efforts on the healthcare industry.

‘Rick preferred a business that would: Employ over one hundred people; enter a growing market; employ people who otherwise had few job opportunities (e.g., not require prior training or experience); provide the potential for “decent jobs” (e.g., salaried positions of $15,000/year, benefits and a career ladder); and offer a socially useful product or service.

The team was attracted to the health care industry because it was clearly growing and provided a very essential service…the next set of questions centered on whether any particular business within the growing health industry could meet the other criteria. Did any of the services within the New York City health field require relatively unskilled labor? Could such a service employ over 100 people? Could the resulting jobs become “decent” jobs?...the search for a particular enterprise within the health field became much more rigorous.’9

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Unfamiliarity with the health care industry led the Center’s team members to seek guidance from the outside to determine which needs in the marketplace would co-exist with their objectives.

‘CSS’s contacts within the field therefore were critical to guide the Center’s team through the health care labyrinth. During interviews with these contacts, home care assistance was identified as a service in considerable demand. Also, home care required unskilled labor, and many private firms in New York employed several hundred workers. Clearly home care met all the criteria except one. The jobs as currently structured were hardly decent jobs-very low wages, poor benefits, no job ladder, and isolated work conditions. Furthermore, home health care functioned within a strictly regulated environment, offering little latitude to improve job compensation and design. The final question therefore became: Could a profitable enterprise be created within these constraints that nonetheless significantly improved the home health paraprofessional’s job?

The CSS team’s only real path was to take an existing low-wage business and begin to change it…they therefore decided in their planning not to be constricted by current industry norms, deciding instead to work toward long-range improvements within the industry. To loosen the regulatory and payment factors that constrained the fashioning of decent jobs was essential to achieving the social goals in their own home care venture.’10

Cooperative Home Care Associates was launched and poised to overhaul the home health care industry. The initial plan of action incorporated standards set far above the norm regarding wages, benefits and a full-time workforce. In terms of a blueprint, none ever existed. “ We didn’t have a grand theory. We had a collection of mid-range theories, an eclectic so that we had a mid-range theory about adult education and how people learn. We had a mid-range theory about what the cooperative structure would look like and we believed that the most important thing was the culture of the organization…to create an organization that was essentially non-authoritarian.”11

Rick successfully sourced financing for start-up operations from varied sources including

CSS grant and loan funds, venture capital monies, philanthropic groups, foundations and government grants. He also secured a contract with Montefiore Medical Center to

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subcontract their services to CHCA. ‘ The key tactical objective was to find at least one major contractor that was genuinely concerned about the quality of client care. Only then could Rick argue that quality of client care was inextricably linked to the quality of the home health aide’s job, and only then could he argue that restructuring cases to create better, full- time jobs would be worth the contractor’s time and concern…Montefiore was troubled by the high rate of worker turnover in its subcontractors…they had taken a special interest in the “continuity of client care”-having a client assisted by the same health aide or aides as much as possible. CHCA’s plan for full-time positions, a higher starting wage and worker ownership seemed to promise a more stable work force…Montefiore promised to subcontract to the new company and to help structure into that a high percentage of full- time assignments.’12 With the team in place, Cooperative Home Care Associates began its operations in January, 1985. What lay ahead was unexpectedly challenging.

The Early Years

The CEO hired to manage Cooperative Home Care Associates changed his mind before arriving in the Bronx and a national search was conducted to find a replacement. With that in progress, it was essential that CHCA hire at least twelve fully trained home health aides to begin fulfilling their contractual obligations to Montefiore. As the work ensued, more health aides were hired yet full-time work did not materialize, causing slight problems within the workforce. A CEO was appointed and Rick relinquished hands-on responsibilities of managing the organization yet remained Chairman of the Board (other Board members included Fred, Tom, the CEO and case worker coordinator). He continued to seek financing and negotiate contracting services with other providers, which would only come to fruition the following year. ‘By the end of the first year…the work force had grown to only

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60 staff, most of whom were part-time. Total sales for the year were only at $200,000-50%

below projections. Losses totaled $187,000 and cash flow had become very tight.’13

Rick took the initiative to avoid any further losses. The current CEO was released from his

duties and Fred Grumm became interim CEO. Together they actively sought new contracts

and secured sub-contracting work with Visiting Nurse Service of New York, the largest

certified home health agency in the country. ‘It expanded CHCA’s work force to nearly 100

paraprofessional aides by mid-year…and full-time work rose to about 50%, better than the

industry average but still below the promises made to the employees.’14 Peggy Powell instituted an educational entry-level training program which may have been the catalyst for rapid growth and development. ‘CHCA took greater control over the shaping of its employees’ standards and expectations…it could avoid hiring “experienced” aides …its

(training program) presence has done more to influence CHCA’s corporate culture than any other initiative.’15 By mid-1986 Cooperative reached a break-even point but were still

experiencing growing pains. ‘The quality of care was suffering due to the now rapid growth.

This was due in part to CHCA’s management systems not maturing quickly enough, and in

part to the mixed morale in the work force.’16 After varied attempts at securing strong leadership and several bouts of trial and error, Rick assumed the presidency in 1987. This could very well have been the beginning for the future of CHCA.

“The fact is I knew very little about how to run a home care business…and then I became President and so there was this real pretty steep learning curve. And I felt like I knew a lot about organizing a group of people to do something-that part was comfortable. But combining the two was not so easy given that the business lived and died on whether it made money or not and whether I was a good organizer or not…but it was the first time I ever felt like I belonged somewhere and that I had the confidence of feeling successful to go along with that. And I knew what I was doing even though I could have done it better…but learning the industry-just being with people, asking questions, listening, learning from them, trying to figure out what to do with it next…I learned how to mediate different subcultures which came out of real experience from my family…the first five or six years were all about

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internal things but I think being sure of myself on big organizational issues and learning the business, which I had a different approach than almost all of my peers who ran agencies, was the most important. It was not to grow it quickly but it was really to figure out how to do it and that would mean we’d make less money during the boom time but that we’d be a high- quality organization…this was the growth period for home care and some people thought I was being foolish.”17

Visceral Synergies

The partnership between Rick and Peggy contribute to the culture and ethos of the

organization; their spirit and courage have seemingly shaped and transformed its existence.

“I don’t think Cooperative Home Care would have existed in its current form if it wasn’t for

the partnership with Peggy in the first six or seven years. In major ways the culture formed

in a crucible between Peggy and me…it was a very good partnership. We had very different

personal styles that we had to figure out how to blend and we knew that-we knew each other

from before and we were friends. And in contrast of stereotyped gender roles, I was the

softer one and she was the harder one…I used to want her to be softer and she used to want

me to be harder and we were both right- we had to really work on that. And it was a very

big deal because the culture is a blend of that hard and soft quality.”18 Together, Rick and

Peggy were able to bring different strengths to the organization which helped develop its formation. “I didn’t start off by saying, ‘I want to create a community.’ That was Rick-he made a vision of it.”19 Rick provided the foresight and execution of that vision while Peggy infused the adult education approach which has become the cornerstone of CHCA today.

“We came together and managed to become friends about our beliefs in adult education and about how it should be done. But she led that entirely-it was totally hers. And adult education training is as big a part of what Cooperative does as the service produced is. One doesn’t exist without the other.”20

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Peggy Powell

Peggy met Rick during their work together at the Mutual Aid Project (MAP). MAP was a

training and organizing program focused on obtaining needed services for the community

and built around a community empowerment model. “When I first met Rick, MAP was

moving into the area of doing job training and jobs creation but using food service as the

connector to those jobs…we wanted to start up our own cultural café-it was a model for

doing some small work development but it was organized about it being a place where the

community could come together-we imagined this to be a cultural sort of gathering and

work environment. In Rick’s way, there’s nothing that is uncomplicated…our cultural café

was going to be a center for political organizing, it was going to be a center for cultural

gathering and it was going to be a center where people could just come and eat…it was

going to be a place where workers could be trained and empowered and in some way or

another, have a better quality of job within that site.”21

When MAP was de-funded, Rick went to work at CSS and Peggy went on to work in a

training capacity with community health centers around issues of board development in

primarily low-income communities. “It gave me the opportunity to continue to do stuff that

I felt was relevant around education and training but I was always sort of waiting for the

moment when Rick and I could reconnect back up...we wanted to take the work we had

started to another level.”22 CSS was in the midst of restructuring and reconstituting their objectives. After the original start-up and planning and six months into the service delivery side of it, Rick brought Peggy in to set up the training component of the newly formed organization known as Cooperative Home Care Associates. It would be a continuation of the work she had been doing all her life around adult training and organizing. “It was

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something that I concretely felt went beyond the kinds of things that we attempted to do,

the more grassroots organizing kind of work I did when I was younger…this was a vehicle

for getting low-income people, low-income community residents employed…it really

focused on a job that was an important job and the valuing of the workers in that job and

figuring out how it is that we could bring added value to the job.”23 Up to that point, cooperative-ownership development was an entirely new landscape for her yet the idea of workers controlling their own creation and development of jobs was intriguing. “The opportunity was there to take what I had done and to really apply it now within what was becoming increasingly a successful model for development and for jobs generation…I have always enjoyed the social commitment side of the business and have always been attracted to the helping profession in terms of training and education. For me it is a way of doing something that I really care about and I happen to get paid for it, which doesn’t happen very often.”24

Peggy and Rick have many similarities including their childhood experiences and a thirst for change. “I think the only thing that distinguishes us is that I had more of a belief that you could make something better. So she bought into my belief but she herself didn’t have that belief that you could create a better place…”25 She grew up feeling disconnected from her

community for very personal reasons. “My mother was Italian and my father, Black. My

mother’s family disowned her so we grew up in Black Harlem…my whole orientation was as

an interracial Black person within a Black community and feeling like that is the community

that I feel most part of. I also felt somewhat of an outsider to that community because of

the racial differences…we were light-skinned Black.”26 At the age of ten, her family moved to an all-White, middle-class community and Peggy still felt somewhat uncomfortable. “I

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didn’t feel different from a class standpoint but obviously from a race and color

place…there were doctors that lived there and I went to school with shop owners’

daughters…at that point, I really felt like I didn’t belong in that world so my world became

our house and one or two friends…so the one place that I felt I had some sense of

community, even though I felt somewhat different was when we lived in Harlem.”27 So like

Rick, creating a place that felt like a community became essential to her own personal fulfillment.

A Collective Sum of Resources

A crucial element to the success of Cooperative has been the teaming of talent. “Rick brings to the work an incredible vision and an incredible understanding of the work-he’s the big picture person…he thinks with an architectural mind…one of the things we have seen in the model is that it needs a very strong team of people. One of the members of that team definitely needs to be entrepreneurial…the leader…and the other members of the team have to be people who can see other perspectives of things that need to get done and be the nuts and bolts people, like the education piece or getting the counseling and supportive services piece done. It really requires a team effort for it to be done well.”28 Rick accomplished putting a smart and driven group of people together and in place, making his own limitations somewhat less glaring and visible. “I became a really good strategist-someone who became good at thinking about how to think in stages about the vision and not try to do it all at once. I was also able to figure out how to find people to compensate for my own limited skills in different areas and to work with them…I’m not good at finance things, so I hired somebody who I really trusted and who cared about worker-ownership.”29 Frances Sadler

was formerly involved in senior management positions at certified home health agencies and

is currently Vice-President at Independence Care System. Rick’s relationship with Steve

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Dawson spans decades. They knew each other before they worked together at the Industrial

Cooperative Association, which was founded by Steve. He has now been President of

Paraprofessional Healthcare Institute for the past six years and is a Board member of

CHCA.

The Organization

“It’s really important to see Cooperative Home Care’s development as neither linear nor one

grand vision…I had previous failures…and so that one of the things I learned because of

them is that I had to think in terms of stages of development…I learned not to work in the

second stage when I was doing the first, and I don’t think Cooperative Home Care would

have existed if it were not for that major change in my thinking.”30 CHCA has since grown into a full blown worker-owned cooperative, participatory organization. Annual sales (as of

2002) reached approximately $17.5 million and the workforce has grown from 350 to over

700 home health care workers since 1998. The Board of Directors consists of thirteen members including five appointees and eight persons elected from the workforce.

Replication sites have been successful in various parts of the U.S. and two separate non- profit organizations have spawned from this for-profit entity including Paraprofessional

Healthcare Institute (PHI) and Independence Care System (ICS). Public policy and standards in home health care have been transformed as CHCA has become a model organization in the industry for reform nationwide. The hopes for the future abound and with the current team in place, it is likely that Cooperative will continue making progress in achieving their long-term objectives for the communities they serve. Presently, Rick is the

President of ICS, Chairman of the Board at CHCA, Board member of PHI and former

Chairman of the Home Care Association of New York State-an industry trade association.

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Peggy is the Director of Workforce Strategies at PHI and Board member of CHCA and

PHI, and Michael Elsas is the President and Board member of CHCA, PHI and an active participant in the Home Care Association.

Entrepreneurial Wisdom

Cooperative Home Care Associates moved into the South Bronx at a time when many agencies were moving out. “It was very fortunate because Cooperative just filled a hole…the neighborhood was horrendous-abandoned buildings, fires and crime. Part of the success(for

CHCA) was due to the high rate of welfare class that wanted work badly…and Medicaid was the major payer of all health care in the neighborhood at the time. They still are.”31

Cooperative proved their worth at possibly the worst time for the neighborhood; they were one of the first successful businesses on the street. Visiting Nurse Service contracted with

CHCA early on because they needed a company they could rely on in the Bronx, which ultimately helped their survival in the long run. When the area began to turn around almost five years later, Cooperative would soon demonstrate their worth could extend far beyond just the neighborhood.

Rick’s objective was to create enough capital and wealth in the business to produce good jobs without having to fight public policy. In 1986 during the second year of operations, reality hit. CHCA was stuck in negotiations with contractors concerning reimbursement issues and wages and in 1987 it became necessary to devise a new strategy. Rick, Peggy and

Steve co-joined their efforts and developed a three-pronged agenda to promote quality training, quality services and public advocacy for industry reform.

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Paraprofessional Healthcare Institute

Several years into the business, visions to enlarge the scope of activities beyond its training

and educational scope to incorporate new programs, replication efforts and policy analysis

work consistent with the CHCA model became more pronounced. Home Care Associates

Training Institute (HCATI) began as a replication and training arm for CHCA in 1990. In

1997, HCATI was renamed Paraprofessional Healthcare Institute (PHI) to reflect the

broadening of the organization’s mission beyond home care to incorporate direct-care

workers across the long-term care spectrum. Steve joined HCATI in 1992 as National

Replication Director and assumed the role of President at PHI in 1997. The name change

stemmed from their expectations to begin serving other paraprofessional services along the

long-term care continuum. “ We wanted to reflect to the broader public that this is an issue

about caregivers and about all direct-care workers and their quality of care and quality of

jobs. We wanted the conditions improved for all of them not just home care workers, so we

decided to publicly make a statement by changing our name.”32

PHI (formerly HCATI) was created in response to the limitations of what Cooperative could accomplish in their mission to create high quality jobs. Its purpose served to assist in raising funds to support the CHCA and other replication initiative training programs, research and develop innovative approaches to training and recruiting and advocating for public policy changes on a national basis. Medicare/Medicaid reimbursement and public financing issues became the primary delimiting factor controlling CHCA’s abilities to restructure wages and benefits. The limits to the job became policy work, “…and we moved in that direction because we couldn’t do what we couldn’t do. We believed the job should pay $10, $12 an hour and we couldn’t pay that…we had to take it to another level to be able to really sort of

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get closer to what it is that really makes this a quality job and really makes it a job that people

want to come to and should come to and be supported because this is a necessary and

absolutely essential service that’s needed all over the country.”33 It was important for

Cooperative to press forward with advocacy initiatives in order to introduce public policy

changes that spoke to the issues of low-income level workers in identifying the components

of a quality job (wages, benefits, training and supervision). “So we ended up putting

together a three year plan, of which we’re now in the third year. PHI wanted to become the

go-to organization for paraprofessionals, for knowledge and information about improving

the health care paraprofessional’s job.”34

PHI is not worker-owned but the elements of respecting workers’ values still remain. Built upon core elements of a quality direct care worker job that include high wages, good benefits, supportive work cultures, training and devising career ladders, it is a non-profit organization structured around a policy-practice model. “We’re in the middle of a major strategic plan now and we are doing policy work that is informed by the practice models we develop so that we have a base to talk about. It’s not just selling a concept.”35 PHI has

developed a clearinghouse of information on direct-care workers to disseminate information

and share best practices on recruitment and training within the industry. PHI is extremely

successful at securing grants and funding for Cooperative Home Care and they provide

consulting services to them and other organizations in a training capacity. “The whole

thought about quality jobs-quality care gains traction throughout the long-term care industry

nationwide via our three core areas including practice with our affiliates, consulting

relationships and disseminating information.”36

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Steve Dawson conceived the vision of PHI and developed it into a major organization. Rick supported his vision and admits it was not easy to get there. “It’s hard. I don’t think the visionary part is the hard part unless you’re envisioning the same thing in a very totally different way. The hard part is that entrepreneurial personalities are pretty controlling people in a sense that they know the only way to get to their vision because they’re really the only ones who can see it…so you end up arguing and to what extent can you give up control or share control…can you communicate what you want in such a finely detailed way or in a particular way that people can see it as well and share it…people then are there because they’ve come to believe in the same purpose and share a vision of what the place should be like…and that’s ultimately powerful.”37

Organizational Protocol

Cooperative is committed to being profitable because they want to give back to its workers.

They have been successful in managing a competent and professional business while simultaneously providing a valuable service. Similar to the organization, its workers have developed a sense of entrepreneurial spirit. Stepping up from welfare and learning how to become a paraprofessional is just one part of personal development. Employees become educated on the merits of the business by learning to read simplified financial statements which gives them an informed perspective on valuing a worker-owned cooperative entity.

If they contribute to the organization in a positive manner and the company makes a profit, they share in those gains. This egalitarian process, however, requires a great amount of fortitude.

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A Cooperative Structure

Cooperative development is not necessarily the most effective way to disseminate a model

nationwide because with the exception of CHCA, most cooperatives are very small and

localized in their actions. They have established a reputation of high quality partly because

workers are directly involved in the ownership process. Workers are productive, responsive

and satisfied resulting in lower turnover rates. “It forces management to spend of lot of

time understanding the relationship between workers and consumers and also understanding

what it is that workers can do to improve their position in the marketplace…the (intangible)

results clearly indicate that workers seem to be happy with what they’re doing.”38 Because of their multi-pronged approach, CHCA has attracted enough attention that other non-profit and for-profit organizations are beginning to experiment with implementing principles of worker participation and cooperative ownership, especially in response to recruitment and retention of direct care staff.

The guidelines of cooperative membership entail a one person, one vote system. At

Cooperative Home Care, each person is eligible to become a worker-owner by purchasing one share at the cost of $1000 after completing their first three months of full time work.

Everyone in the company can acquire only one share, including the operating officers.

Purchasing a share requires paying $50 up front as a deposit, and weekly deductions in the amount of $3 per paycheck are taken out for five years until the remaining amount is paid off. Once the initial deposit is paid, workers are entitled to all benefits including dividends, voting rights, health and life insurance. Those persons do not elect to become a worker- owner are considered employees and do not have any voting rights. Purchasing stock in

CHCA can be construed as an investment yet the intent is not to maximize returns. In

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reality, a worker purchasing a share symbolizes his or her commitment by agreeing to the rights and responsibilities of ownership. “The worker-owners benefit from their ownership share because it provides them with an opportunity to earn dividends, which historically range from $200 to $400 a year based on the company’s profits.”39 If a member leaves the organization, their entire investment of up to $1000 is returned to them.

In order to help employees make the decision to become an owner, they learn about the rights and responsibilities of cooperative ownership. CHCA developed a series of workshops and training sessions consisting of four key elements to address these issues:

Basic financial literacy, industry trends, the rights and responsibilities of workers and decision-making responsibilities.

“They learn how to read financial documents and get to understand the fundamental linkage between revenue, profit and wages and how the business makes money, and they learn about CHCA’s financial position. Training in this area gives them the tools so they can help understand what’s going on within the company- it’s an incredibly unique and empowering experience.

They learn about the trends and conditions within the home care industry itself. And again, home health aides just going through the day-to-day caring for clients may not be aware of those particular issues. So through this training they become aware of the environment not only of their employer and the conditions around the employer but also the conditions within the broader industry…they learn about what costs are involved including Medicaid taxes and social security and where it goes…its the costs that CHCA incurs when they hire an employee. And this reinforces that by saying ‘this is what CHCA is getting for every hour of home care service you provide, and this is why CHCA is only getting this amount’ because of the public funding, because it’s characterized by low-wage work and because of all the different trends and conditions within the industry.

The third crucial component is the rights and responsibilities of workers, which after they understand the industry, it really helps them feel comfortable. It really helps them to come full circle in utilizing their power in ways that are constructive and strengthens the business. In theory, workers have the power to say they want to be paid $20.00 an hour. But because of the education that takes place, they realize that if they ever wanted to exercise power in that way, it would bankrupt the business and everyone would be unemployed. So it’s really trying to understand how individuals can use their powers in constructive ways.

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Finally, the decision-making responsibility puts their powers within the context of the organization. Workers as owners have certain powers, managers have certain powers and the Board of Directors have certain powers. Just because someone works in a cooperative does not give them the right to circumvent the rights of managers- there’s a process and there’s a system…while a worker-owner has tremendous rights, other constituencies or other levels in the organization have rights, too.”40

Governing Bodies Traditional cooperatives are small enough to solicit the opinions of their members via staff meetings and tableside discussions. With 700+ employees, CHCA had to develop an alternative so it created a representative Worker Council comprising five separate regions of the workforce. (CHCA divided its employees into five regions based on the geographical location of homecare workers.) From a service delivery side, it has helped facilitate the efficiency and effectiveness of the business. “It’s more of a scheduling tool to insure that individuals have easier access to their clients.”41 Each region has elected two persons to

represent their constituency at the Workers Council. At Council meetings, all decision-

making levels in the organization are present. The elected team ‘reps’ are joined by

representatives from senior management, other administrative departments and elected

members from the Board. “Because they divided the workforce into these teams, it really

formed the foundation for a worker council participation structure… it is a very distinct

participation structure for CHCA…after these discussions, the Worker Council

representatives go back to their individual teams and share the information they got from the

meetings. They have discussions, get feedback and offer suggestions to the Council

representative to take back to the next meeting.”42

A variety of issues are discussed with the overall emphasis on Cooperative’s business relative

to the overall home care industry. Opportunities for leadership development are created and

worker-owners have the authority to approve various decisions made by the Board of

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Directors. “It’s a power of their Class A stock…it’s at these team meetings where if a Board

of Director’s decision has recently been adopted, then they can exercise their franchise at

that time. So it’s not just a mechanism for information exchange, it is true participation and

to some extent, a forum allowing direct-care workers to exercise their ownership right and

live out those rights as owners on a daily basis.”43 Regional meetings are held organization- wide on a quarterly basis.

The Board of Directors is comprised of thirteen persons including eight elected worker- owners from Cooperative Home Care and five appointed operating officers including one person from PHI (Steve who serves as Chairperson), two persons from ICS (including Rick and Frances Sadler, Vice-President of ICS) and Michael Elsas as President of CHCA.

Elected members have two-year term; they are nominated by their peers and co-workers and a democratic vote is held amongst the entire workforce. Formal meetings with the full

Board are held bi-monthly and informally, Michael and elected members meet monthly.

Board issues revolve around budget items such as wage and benefit levels, the distribution of year-end profits, significant policies affecting employment and to explore possibilities for offering new services or pursuing new markets.44 Recently, the Board has decided to consider expanding their license in terms of the services offered. “Right now we’re allowed to provide home health aides and nursing. We want to include occupational therapy, speech therapy and so on…in the Board meetings, we’ll discuss these issues and try to stay away from the day-to-day managerial types of decisions.”45

An Industry Anomaly

Conventional home care licensed agencies providing paraprofessional services are typically

owned by single proprietors or partnerships and small business people. The notion of

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workers owning their own business and then being successful and seen as a model is astounding to the traditional home care organization, whose model of business is high turnover and high returns often resulting from paying low wages. Most long-term care agencies treat paraprofessionals as a commodity and normally do not invest in their workforce. The prevailing attitude has been “…if someone leaves the job, there’s no problem because there’s hundreds of other people wanting the work. There’s no real incentive or motivation on the agency’s end to make the kinds of investments in their paraprofessional workforce that really would improve the quality of jobs and quality of care.”46 Currently CHCA is paying $8.70/hour with benefits, an increase of $1.70 from two years ago and still one dollar above the industry average. In the next few years, they hope to increase wages to $10/hour. Typically, turnover rates in the industry average 40-50% and

CHCA averages approximately 20%. “One of the reasons for low turnover is because of our training and support…and concerning wages, we are probably the only home-care company that has six different levels of pay. The longer you work here, the more you make…the first threshold is very quick. Within a year, you get an increase which is above and beyond what we would consider to be a cost of living increase. These are actual raises in your salary based on longevity.”47

CHCA does not depend on reimbursement rates set by Medicare and Medicaid. When

Michael arrived at the organization after spending time in the for-profit and non-profit sectors, he could not fully comprehend how the organization could sustain itself. He learned quickly.

“I kept saying, ‘How can we do all of this? How can you train for five weeks instead of two weeks? How can you have counselors and coordinators out there who are only there to help the worker? How can you provide the wages and benefits and so on’ because I’ve been in home care my whole career…and I know what it costs and I know what kind of rates we

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get…and I just couldn’t understand it…in the home health care field, making money has always been considered easy if you basically pay low wages to the workers and keep the profits…there’s really no lack of supply, as there’s plenty of minority women and new immigrants. The industry just doesn’t understand the idea that 60% turnover is bad business because you have to keep training and recruiting-it’s an increased liability…they don’t care if workers stay or go, they just want to keep bringing more people in because for every hour worked, there’s a margin…and the margin rules.”48

Premium-priced agencies offer health insurance benefits to their employees and the majority

of agencies provide almost nothing. At Cooperative Health Care, many benefits are offered

including a pension plan and access to emergency child-care services, should normal child-

care arrangements fall through during working hours. “It’s a new program we just started so

its fairly experimental…our tasks will just continue to grow as the needs of our workers

grow…as we identify them, we try to fulfill them.”49

The entrepreneurial innovativeness, resourcefulness and will to survive is the backbone of

CHCA. They have diversified and created alternative sources of revenue, recognizing they could never achieve their social objectives if they were to remain dependent on rates. A mechanism via PHI was created to do fundraising work. Having an infrastructure built around policy and federal funding issues facilitates common sense in knowing how to maneuver within the system when applying for federal grants and funding. Paul Dieterich has been with PHI since December, 2002 and has followed the development of CHCA for the past twenty years in his former role as a senior staff member in the city government.

Presently he is the New York State Policy Director for PHI and is responsible for policy research and analysis. “My job is to get all the key stakeholders in the state to begin to work together on what reform could look like-agree to a set of principles, begin to understand what the possibilities are other than what we have now and begin to make the trade-offs that will be necessary in order for there to be a negotiated reform.”50 He works very closely with

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CHCA and ICS, the practice sides of the business; it enables him to discover ways to

improve the functioning of alternative long-term care organizations for the future.

CHCA has proven exceptional results and due to their positive outcomes, receive additional

funding which allows them to deviate from industry norms. They have enormously high

retention rates, higher than average wages and provide benefits to their workers. “A lot of

home care companies don’t participate in some of the federal programs that are out there.

There’s money out there and because we have been effective, luckily the government does

have programs to reward you for that. There are wage subsidy programs that if you can take

people off of welfare and keep them off, you can get rewarded for that…last year we raised

lots of money between the money PHI raised for us and federal grants. Of our total budget

last year, one million of it came from other sources.”51 Recently, PHI procured a major

TANF (Temporary Assistance to Needy Families) grant from the state government totaling

$1.4million to support the CHCA training program. In 2002, CHCA received a fair amount of high-quality grants which contributed to a very profitable year; they paid bonuses in addition to dividends to all its workers. This culminated in the establishment of a bonus program based on a merit system for the staff and workers.

A Yardstick Corporation

Many licensed agencies fail because they are unable to deliver workers at the right time with the right skills for people needing home care. CHCA has overcome this dogma; employees are renowned for their reliability and have a well-trained staff providing quality services, albeit for a slightly premium price. “Once you start meeting that level of industry need, you get a reputation as a very high quality organization. CHCA has received lots of awards and recognition for quality from VNS, other hospitals and nursing homes…as somebody who’s purchasing this kind of service, you are looking for that level of quality because when you’re

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not getting it, you’ve got all sorts of other problems that are going to cost you more than that higher price you’re paying from an agency of that type.”52

CHCA has been praised as a ‘yardstick corporation’ for its exemplary methods of organizing the role of the direct-care worker as a worker-owner in the home care industry. Primarily due to its economic and social successes, Cooperative has become a model organization and principal actor in helping to reshape the home care industry and effect change in conjunction with its major public and private stakeholders. “The combination of CHCA’s clearly stated social purpose and employee-owned structure has helped the company forge the related role as a “yardstick corporation”-a private company whose social mission is above reproach, whole economic achievements are respected and thus whose analysis is trusted by public regulatory agencies, health policy organizations, labor organizations and the media. CHCA’s high standards and innovative practices can therefore be used by these institutions to guide and measure their assessment of how the rest of the home care industry currently functions- and how the industry could function within a more supportive regulatory environment.”53

Transformation

“The psychology of nobility is driven by much more selfish needs…I felt like a failure in the beginning of my adult life…there was a tremendous selfishness that I needed to be successful. I needed to be successful in something that wasn’t just for myself and needed it to relate to my values and beliefs…and working- if it didn’t have any meaning, I wouldn’t work hard. If it had meaning, I would work like crazy. At Cooperative I felt like I belonged but it wasn’t immediate…I first had to feel like I was a success and then people would tell me I was a success before I ever believed it…ultimately, I allowed myself to feel that-to feel good about it…I just got more and more comfortable being Director there.”54

The visions for Cooperative Home Care have transformed dramatically. From 1982-1986, the original pragmatic task was to build a 200-300 person participatory business in order to

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become viable financially and retain a sense of social community, governable through an

ownership structure. “So the concept of community from the beginning was seen as very

important…and if we did that, it would be an achievement.”55 From a personal standpoint,

Rick’s desire was to be his own boss. “I wanted to do what I wanted to do and this was the place to do it…Cooperative Home Care was like building a place where people could have refuge and that’s really what drove me. I thought the world was a really terrible place and I really wanted refuge for myself and other people. And it was only good if it was with other people, and it was good only if people really appreciated it as well.”56 Worker appreciation

transpired quite early, within the first three-four years; the future however, chartered

unknown territory.

Over the past seventeen years, CHCA experienced transformation in cooperation with its

development in stages. The evolution of what is today, PHI, began as a training institute for

its workers. ICS was launched in 2000 and has grown considerably since then. Within inter-

organizationally different divisions, new departments have emerged and the number of

worker-owners has multiplied. CHCA has clearly developed beyond its vision conceived at

the outset. “The model for the entire organization… well I don’t know if there is one. It’s

been full blown from Rick Surpin’s mind.”57 Rick and Steve’s intuitiveness in adapting and

responding to the business realities of the market first and organically creating a response to

those realities, second have contributed to its evolution. “It’s grown primarily through the

leadership of Rick and Steve at different points. Steve on the nonprofit HCATI and PHI

side and Rick in terms of the growth and preservation of CHCA at different points in its

history. On Rick’s side and from a nonprofit business perspective side for Steve, Rick sees

the development of CHCA as a business first. For him, it has always been about the survival

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of the business-he knows the industry, reads the tea leaves, is incredibly creative and

knowledgeable and figures out what we need to do in order to get to the next level.”58

Michael Elsas

Almost seventeen years ago, Rick Surpin had an idea. He was exploring the health care market during his service at CSS and wanted to learn more about the home care industry. At this point, Michael Elsas was working for the largest non-profit home care agency in New

York, which happened to be across the street from Rick’s office. “He called up my boss and said ‘Who should I talk to about home care?’ So Tom said, ‘Talk to Mike Elsas.’ So I went across the street, had a three-hour discussion with Rick and at the end of the conversation, he said ‘So would you like to run something like that?’ And I said no…but I did express my feelings about how I thought that it was miserable that the workers aren’t respected and the rates are really lousy and gave him all this negative stuff. And he said, ‘Great. I think I’m going to do it anyway.’”59 Michael and Rick kept up a good relationship throughout the years. In 2000, Michael was working at a certified agency and was dissatisfied in his current position. He noticed that CHCA was looking for an Executive Director to manage the organization, telephoned Rick to discuss the position with him and Rick replied they were planning to offer the job to someone else that afternoon. “So Rick called me up the next day and said ‘Michael, what are you doing to me?’…he immediately got me in front of the board and they hired me.”60

Trial and Transitional Leadership

The sense of ownership and participatory culture is the strength of the CHCA model.

Without this, the organization would eventually deteriorate. For 1 ½ years prior to Michael’s

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arrival, leadership had waned as Rick left to run ICS and an interim Director was appointed

in his absence. Michael’s predecessor neglected the value of community and jeopardized the

cultural dynamics of the institution. This called for immediate action. Michael was reputed

to be a big picture person, highly knowledgeable about the home care business and deeply

committed to empowerment issues and the participatory nature of organizing. When he

joined the organization, it was essential he rebuild the community and create an affable

climate, which was equally as important as growing the business. After all, an organization’s

culture is primarily a reflection of its values. “If you don’t value the people, then it gets

lost…that’s what happened with the transitional management and leadership prior to

Michael…as we transitioned out and as the company was growing, we needed to create a

position that was almost like the culture czar of the organization. That person had to pay

attention because their whole job and focus had to be about holding the company

accountable to its ownership and participation culture because if you don’t have somebody

that sees that as a key role, it will get lost.”61

Upon joining, Michael threw himself into the heart of the organization. He developed friendships, participated in classroom teaching and held seminars to discuss worker- management issues. In his second day on the job, he inverted the traditional hierarchical pyramid structure in one of his sessions. “ What’s important here are the workers because if we don’t have workers, we don’t have coordinators and if we don’t have coordinators, we don’t have supervisors and if we don’t have supervisors, we don’t have a President.”62

Michael is now in his third year of reshaping the organization and has contributed greatly to its upward momentum. “People in this kind of organization need to feel a sense and they need to hear it and it needs to be reinforced how valuable they are. And then it has to be

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acted on. It can’t just be the words…Michael has an open door policy and he ensures that

all the workers have access to him, which shows how human he is…many times people said

it reminded them of Rick.”63

Michael has since enjoyed his tenure at CHCA primarily because it combines the best of the

non-profit and for-profit worlds in the service of others. “We epitomize the notion of

taking from the community and giving it right back...when I took this job I guess I was very,

very comfortable and confident that you really could do great things with this company if

you were motivated to do so.”64 He values working for an organization that is successful in providing real jobs with real benefits to women who otherwise would not have the opportunity and he appreciates contributing to making a difference in their daily lives. “I like to give people the power to do what they want to do-it’s the whole empowerment piece.”65

Michael and Rick have very different personal styles, however, both value human dignity and equality above all. There’s a tremendous amount of mutual respect between them and when

Michael joined the organization, it was a seamless yet emotionally difficult progression for

Rick.

“It’s hard to keep going but Michael’s added really good new energy at Cooperative. It was a hard transition for me to leave- I’m still chairperson but it’s not the same…I’ll never have a better job than I did at Cooperative Home Care…I felt very loved there and I felt like I belonged there…and just for someone with my values and beliefs and who considers them to be the sum of who I am-to be loved by Black and Latin women and accepted by them…and for me to be there even though I was Director was such a statement about what I wanted in the world for lots of other things that I’ve had to struggle with on my own, and what’s realistic for me. What are the limits of my abilities to accomplish? I can’t make the world like this but I can play a major role in making this one place like this.”66

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Organizational Paradox

Cooperative Home Care Associates began as a small player in a very large and regulated

industry. In order to function in the market it was necessary to conform to industry norms

and perform as statutory regulations permitted. Conversely, they have also been considered

an alternative organization vis à vis the core of the market. “ There’s always been a push and

pull between what the market wanted of the organization so this organization could exist in

the market…Cooperative Home Care was essentially structured against the grain of the

existing market institutions…we worked really hard at maintaining our base and going out

and trying to influence the core and at the same time in that process, the core was

influencing us…but in order for Cooperative Home Care to exist and flourish, it needed to

have that push-pull tension.”67 They have made huge inroads in achieving their social goals and business objectives, challenging the system at times and adapting to the realities of the market when necessary. In the process, the organization has been affected as much by the environment as it has influenced industry standards. “We are not always the ones waiting to be shaped by the marketplace but also work to shape the marketplace.”68 Market forces, government regulations, societal changes and sub-contract work are primary external factors effecting the organization. Cooperative has remained flexible in adjusting to these dynamics which has complemented its own growth. Simultaneously, they have gained influential voice in pushing for higher wages, rates and benefits in an industry tenaciously known for its inferior working conditions. Their penchant for equity only strengthened with the development of PHI, various replication efforts in other parts of the country and subsequent creation of Independence Care System.

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Evolution

Replication Efforts

Replication sites in Boston, Philadelphia, New Hampshire, Detroit and Arkansas have spawned from Cooperative Home Care Associates; the primary intent was to more broadly disseminate their unique model throughout the home care industry. In terms of its role as developer, a prototype was created for hiring staff based on their own organizational history.

A search ensued for entrepreneurial visionaries and individuals committed to participatory ownership. “We came up with a job interview that looked at what we thought were the essential elements for that lead entrepreneur-a lot of it was based on what we learned, not just from Rick but from other businesses…we looked for trainers who were experienced or knowledgeable about learner-based training and about empowering ways of doing education.

We looked for counselors who did not have a therapeutic counseling background but people who had worked with people in transition from employment…and for this to be more successful, we needed to get somebody as close to the model as possible.”69

CHCA has the advantage of being in New York, a vibrant market that has more home care funding than most other places in the country. “The heart of the organization is CHCA,

ICS and national policy work (driven by PHI)…the individual sites are not models like we are here in the Bronx.”70 As the newly formed organizations developed, growing pains were met by uncertainty. “To what degree do we (PHI staff) intervene and interfere with the day- to- day life of an independent company that is making its way along its course? We needed to figure out how far to stay out of the independent life of each of those companies even when it wasn’t looking right or was moving away from what we thought the model was…and that’s part of the difficulty of the replication model. It’s different markets, different realities

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and like us, we have to be able to let people learn their lessons.”71 Direct-care workers are

fundamental in helping to define the quality of care being delivered and how direct-care

workers are treated is vital to the quality of an organization; being perceived as a health

service delivery advocate is significant in a turbulent industry. These Cooperative principles

play out differently in various parts of the country, as opportunities in each marketplace are

different. “You’re always caught between what you want to do for the workers and what the

workers basically are expecting of themselves and of their organization and the marketplace

on the other side of it.”72

PHI accomplished its first replication initiative by establishing Home Care Associates

Philadelphia in 1993, a foundation driven response spearheaded by the Mott and Ford

Foundations. A trustee model was adopted and PHI served as a sponsor organization, owning the business until it became profitable and worthy enough for its employees to own.

“Giving low-income individuals an opportunity to own a consistently failing business isn’t really much of an opportunity…PHI went through the growing pains of the process until it became consistently profitable and was therefore attractive and worker-owners would actually benefit from owning a share in it.”73

Cooperative Home Care of Boston was envisioned to be a worker-owned cooperative and

was the second replication program launched in 1994. “In Boston, they got off the path to

what the idealized model was…there was not a complementary trusted team of people to

guide that organization and so with the difficulties of that initial start-up team really jelling, it

put the Boston group at a disadvantage.”74 Initially, Boston was successful because they had

a very strong partner in the market supplying them with sub-contracting work and they

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received a federal grant and funding from the Ford and Mott Foundations to support the

training program. In fact, they broke even ahead of schedule and then market problems hit.

“When they cut back on Medicare, they cut back on the hours which resulted in problems

with workers complaining about the lack of work… the President there was not very

entrepreneurial-he was not a person who could really make a market happen. Also, they

didn’t have a real cohesive team…so the problems and the friction started up…I do think

it’s because there was historically problems between the kind of business side and the

training and social side. A lot of it was embodied in who the individuals (leaders and staff)

were.”75 Ultimately the Boston project failed because its market hit bottom and its doors closed in 1999.

PHI worked with the sponsorship of the New Hampshire Community Loan Fund who served as the trustee to establish Quality Care Partners New Hampshire. “It enabled them to become affiliated with PHI in order to provide or solidify the technical assistance relationship.”76 The New Hampshire model focused on staffing nursing homes and the

Cooperative Healthcare Network began extending their services beyond home care to begin

working with organizations on assisted-living facilities and caregivers for people with

disabilities. As soon as the enterprise in New Hampshire becomes profitable, it will formally

offer shares to its workers.

In Arkansas and Detroit, PHI provided technical assistance and support to the training and

placement programs. Careers in Health Care Arkansas is focused on instructing nursing

assistants and the Visiting Nurse Association Training Institute of Southeast Michigan in

Detroit, educates home health aides. Both organizations have incorporated many elements

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of the CHCA model, adopting only the paraprofessional training program and not the worker-ownership piece. To date, these replication sites have been successful but some states such as Michigan and Pennsylvania have recently experienced cutbacks in Medicare and Medicaid; this could bode detrimental to their future. In the early stages of PHI’s development of the Cooperative Healthcare Network, PHI leadership envisioned that each of the PHI affiliate organizations would have a dedicated policy person to closely tie practice with policy. As PHI has expanded its statewide advocacy efforts, it has looked beyond the original enterprise states to focus on strategically key regional areas that help to strengthen its public policy efforts both statewide and nationally and. The National

Clearinghouse on the Direct Care Workforce established by PHI provides a dissemination vehicle for both workforce practice and policy issues.

PHI has been designed to “carry the word…and quality care through quality jobs is something that I think all of us agree is the best way to move forward in reforming long- term care nationwide…and we’ll take every opportunity to move into new parts of the national scene as well.”77 In due course, it is envisioned that PHI will take all the lessons learned from the Cooperative Home Care Network (including New York, Philadelphia, New

Hampshire, Detroit and Arkansas and ICS) and begin to investigate opportunities in the country to either replicate in terms of bringing worker-ownership to the industry or start something completely different using those same principles and applying them elsewhere.

As an ultra-purist, it was difficult for Rick to support the development of replication sites around the country. “As a visionary you have a pure model-your own vision of what should be… It’s just a founder’s mentality and I have a good deal of founder’s disease…it’s not like you can cure it, you can just try to control it…I do think it’s important to disseminate our

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ideas and treat them like seeds to grow someplace and hopefully they take root in a good

way…but those things that we’re not doing directly, we have no right to think they’ll turn

out exactly the way we want them to.”78 He was involved with the early replication efforts in

Philadelphia and Boston and eventually chose to concentrate on other areas of the business.

Independence Care System

Independence Care System was launched in 2000 as a nonprofit

subsidiary of PHI, designed to assist adults with physical disabilities and chronic illnesses to

live independently in their homes and community. It is a consumer-based, Medicaid

managed long-term care solution for disabled persons whose needs were not being met by

the existing health system, living in the Bronx and Manhattan.

“Persons with physical disabilities living in the community generally live within severe constraints in terms of available health and social services…they require more time and have more unusual problems than the typical patient or consumer, and the mobility needs of severely disabled adults are virtually ignored in the (social) system…ICS was established to address these needs and to aid consumers in managing and planning their own health care in conjunction with care coordinators and supervisors. The focus is on coordination of services, identifying gaps in needed services and identifying preferences for services and how they are provided….in addition, ICS hopes to further develop and broaden the impact of the "good jobs/good care" model of paraprofessional home care developed by Cooperative Home Care Associates. ICS will provide a unique opportunity for CHCA to grow to a 1,000-person agency within the next five years.”79

“Rick wants to stand on principle that he’s going to serve the people who have the highest

needs”80 and as a consequence, ICS was developed in response to his mirror-up vision. Rick believes that ICS is an extension of Cooperative Home Care, the foremost agency of its kind. “Cooperative is like a gilded job shop…it’s similar to a craft place run by craftsmen, but it is the one that is seen as being the best-it’s the one everyone goes to for advice…and so we had people from all over the world come to us for advice but it didn’t get us a premium price. We were being treated as a nice ambassador of a commodity product and it made me nuts…”81 He began to try and differentiate the product, yet came up against the

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government health care reimbursement system; they refused to pay more for CHCA services

in spite of the higher quality of care. In turn, he took it upon himself to change the

dynamics of the system.

“Rick wanted to be higher up on the food chain…having the right to pick your own cases or

go and find your own cases.”82 ICS wanted to become a contractor of services primarily to source business for Cooperative Home Care. This would provide additional revenues and

CHCA could move away from being a sub-contractor dependent on other healthcare facilities for their services. “We wanted to make our own market and have more control over the bundle of services and money. As conceived, we do that today…it’s just a question of whether we’ll succeed in doing that.”83 From the beginning, ICS and CHCA have had a rocky relationship. Home health aides were resistant to taking ICS cases because they were unusually different. CHCA workers were used to adult-care cases such as broken hips and patients with illnesses, not disabled persons. Home health aides were also told they would receive higher wages if they were to work with ICS clients, which they did not receive.

Cooperative does have a wage differential based on a worker’s longevity at the company or a weekend differential, not on a client’s degree of incapacity. Michael addressed the ill-fated situation at a regional meeting. “I taught them how volume makes a difference with the company…our business is a volume business and the more volume we do, the more profitable we can be…and in our company, more profit means bonuses and dividends…I explained to the staff and aides that ICS is our customer and that is where our future is and that we should take advantage of the fact that this is a very good business practice.”84 The

Vice-President of Service Delivery, Director of Training and others got involved to help

unearth a common ground. As a result, Cooperative incorporated more education on ICS

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patients into their training program to facilitate teaching home health aides about physically

disabled patients, enabling them to feel more comfortable with cases. Members have

embraced the concept, learned the tools and now work effectively with ICS clients.

ICS is presently contracting CHCA for services representing 25% of Cooperative Home

Care’s business and concurrently, CHCA represents almost 25% of ICS business. Rick and

Michael expect both businesses to contribute even more to one another in the future. “I

value the potential of this place, meaning ICS in potentially having the same role for people

with physical disabilities as the workers at Cooperative Home Care.”85 The formation of ICS is at an earlier stage of similar development to CHCA, however, the growth of ICS is much faster; this is in part due to Rick’s past learning and experiences. After only two years into its operations, ICS has 500 members and an operating budget of approximately $25 million.

ICS and CHCA have a close partnership yet the relationship is evolving. “Cooperative

Home Care is clearly responsive…it will end up equal with ICS and then it will end up being something else-I’m not sure…Michael and I are working on that.”86

Unionization

The home care industry is much more divided than it ever has been between pro-worker and

anti-worker, and Cooperative Home Care Associates has intensified this conflict; Rick has

been a strong force in this nationwide debate. “I’ve said the industry needs to be unionized-

that if you look at companies in industries where low-income workers dominate, the only

one difference between good paying jobs and low paying jobs is the union involved…the

only reason that prices and wages increased at United Autoworkers, for example, is because

there’s a good union involved-at least a union who would fight for better wages and

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benefits.”87 Cooperative offers higher wages than the conventional home care agency, but what about the industry? “We’re not going to take over the industry through regular market forces and we don’t want to…so I pushed for unionization of the industry…everybody thought we were really nuts because they thought we would be the last ones to unionize because the workers control it. And from a pure wage and benefits standpoint, the union does nothing, in fact it takes a little bit away from the health insurance side…but we’ll work that out and it will end up not taking away from anything.”88

Cooperative Home Care Associates became unionized in December, 2002. “We’re saying we can’t exist separate from the market and we therefore want the market to look like this…in order for that to happen, it has to be a unionized market. If we want the market to look more like us, unions is the only intervention you can make for the industry to do that.”89 Traditionally, unions exert a great amount of influence within an industry and changes the market in many ways. It ensures that employers pay higher wages and it effects pricing, particularly in a zero-sum reimbursement market such as New York. Since unionizing, worker-owners feel more in control of the organization and are determined to control changes taking place in the union as opposed to allowing the union to control them.

“Before when we weren’t unionized, we didn’t even have a voice with some of the big spokesman who go and fight on our behalf.”90 This development has become part of the ever growing vision concerning advancement in the home care industry.

Tentacles in the Field

Direct care worker representatives selected from the entire Cooperative

Healthcare Network come together once a year at ‘assembly’ to share and disseminate

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information. The idea of creating CHCA’s policy action group (PAG) originated from the

2002 assembly and since its formation consisting of six members on the committee, PAG

now boasts 30-40 home health aides. “We’re really big on getting our message out to the

politicians for higher reimbursement rates and better health care. Because we didn’t used to

be unionized, we didn’t have any influence. So, we decided to do it ourselves. Instead of

work on recruiting we decided to get together and form a group that we can send out to

lobby and they can go speak to their Congressman or their Senators to tell them our view of

what’s going on as far as home health aides- what they’re going through and trying to fight

for better wages.”91

PAG members have become actively involved in raising awareness through the legislative process of home health aide issues on a local level with local politicians. “A lot of the home health aides are getting involved and that’s what we need to do is keep them involved…if they stay involved, their chances are better to be noticed…to be heard.”92 They write letters to the Senators and Representatives from each borough inviting them to visit Cooperative

Home Care to speak about different issues taking place in the long-term health care community. This group has also emerged as a breeding ground for leadership development.

“The Worker Council reps are gravitating to the Political Action Group because they’re sort of one and the same…and that’s going to be the area that we see a lot of the leadership qualities and training coming out.”93 Michael enjoys the spirit and determination of these budding leaders and often brings them with him to lobby on Capitol Hill. “I’m very active in the state association so I know when we go to lobby. Last year, I decided to bring home health aides with me…well, it blew everybody’s mind-nobody had ever brought home health aides to the state capital!”94

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The DCWAG (Direct Care Workers Advocacy Group)grew out of a network-wide planning

group for the Paraprofessional Assembly. Organized and staffed by PHI, it consists of a

volunteer group of home health aide members and staff from the Cooperative Healthcare

Network. It is a leadership development mechanism and a forum for exchanging knowledge

about company practices, work environment and local policy activities “We usually meet in

New York City to try to pool information together and figure out what we can do to

improve the work experience…we get together and go over certain systems that work and

because we’re all in different areas, the other companies can get ideas about what we do and

then they can implement it at their company if they think it will work.”95

An external coalition, Direct Care Alliance (DCA), launched in 2000 with the help of PHI is a unique multi-lateral group that consists of direct-care workers, providers of service and consumers. They congregate annually in Washington D.C. and collectively speak with members on Capitol Hill to discover ways on improving the system. “We try and figure out where each aspect of the direct-care money can be satisfied as far as better care, better working environment and better reimbursement and health insurance.”96

Unknown Territory

CHCA, PHI and ICS are attempting to build a network that will survive its own legacy. It is

only recently that PHI and CHCA have gone after government contract work. With CHCA

continuing its role as a provider of paraprofessional services and PHI advancing its

fundraising work and advocacy programs, ICS will persevere on the contracting side to

increase business for CHCA. Together they hope to effect change in the industry, remaining

true to their ultimate objectives. At present, PHI has financial issues and is struggling.

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CHCA will be in a predicament if ICS does not endure but they are not in survival level

trouble. They have positioned themselves about as well as possible in the industry, albeit

without cutting back on staff benefits and salaries.

Concerning ICS-the jury is still out. They continue to explore ways of working differently in

conjunction with the major stakeholders in the community. “They’re still shaking out what

it is they’re trying to do…further down the road they’re going to have to probably make

some major changes to either incorporate a worker-owner structure or change their

relationship to consumers…they’re going to run into financial problems.”97 Long-term issues involve refining the role of the case management process and effectively organizing the service delivery side of the business. This will be a test of its progressive nature, as resolving these issues will require the commitment of its workers in making an operational shift. ICS has not be able to renegotiate their rates for Medicare reimbursement, thus the sense of urgency. “Rates are based on averages and we have higher costs than the average…the state wants to continue paying us based on averages and we are saying they can’t…they’ve made some adjustments based on our statistics but they’ve not gone all the way…they made an artificial distinction between those under 65 and over 65 years of age…they allowed the people under 65 to be paid at the higher level of costs and said no for the over 65 group…we should be making $1 million a year and instead, we’re losing 1$ million a year at the moment.”98 This continuous process of adjusting to market forces has

created a heightened need for advocacy work. Rick spends a great amount of time fighting

with the state, working within their current budget and trying to shed costs or operate

differently so they can at least break even, which he believes they will do eventually. “We’ve

figured out some things but the big thing is the state thing. The fight with the state we’ve

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decided to take straight to the Governor and to the Commissioner of the Health

Department…it’s a terrible way to spend your time but it’s what’s necessary.”99

Nature of Organization

A Community

“This company’s really like a big family. We’re always doing something for the worker, trying to make it better. If they(home health aides) have problems at home, we can help them by getting them counselors…if they have childcare problems or living problems, we can help out with that, too. We’re always trying to make it comfortable for the workers to get to work so they can give 100% to their client, and that’s one of the bases. If the worker is happy, then the client is happy and then the company is happy.”100

Cooperative Home Care has become a symbol of immeasurable importance to not just the

home care industry but for consumers relying on high quality care. In strict home care

terms, Cooperative provides good jobs and combined with quality supervision and training,

clients receive exceptional care. In turn, the home care worker develops self-confidence,

skills and a heightened level of self-esteem which is fairly unique in the home health industry.

“Doing home care is like instant gratification. It’s every day. You’re keeping people at

home comfortable and happy…you’re making a difference in someone’s life, so it’s really

nice work. We see the fruits of our labor whether it’s from the patient standpoint or the

home health aide standpoint; we see it every day.”101 Rick Surpin believes these are the primary attributes which contribute to the sense of community found at CHCA, a concept that incorporates the fundamental virtues of reciprocity, mutuality and shared gains.

“Cooperative Home Care is a real community operating on three different levels. The people really care about each other within that community so at one level, it has a function.

It provides home care services that are done very, very well and it trains people to do that work very, very well. On another level it is also a social community that has a lot of different

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subcultures and considerable diversity…it’s a social community that has very few social

rules-people can live and be themselves and even though it’s a workplace, it’s not forcing

people to be more of an organizational personality-people are allowed to be who they are,

which I think is a real feat! And third, it’s a community that governs itself. Worker-

ownership is a legal structure that allows the social community to elect representatives as if it

was a village governing itself.”102

A worker-owner cooperative structure is the ultimate high-risk, high-gain strategy. In the case of CHCA, the community culture has been the engine driving the organization and the cooperative structure has simply become a vehicle to govern the community. Management’s important role is to provide home care services and training programs. Concerning its governance, management is adeptly aware that it relies on its workers for their input, output and ultimate control of the Board. The Board develops policies that reflect the good of the worker owners, workers and the community as a whole: “You have to feel good that there are shared gains and if that can’t happen, then there is no community group…and we’ve worked really hard over the years in making sure that the policies that are developed reflect that sense most importantly.”103

Values

Empowering workers and valuing others are high virtues existing at Cooperative; it appears

to be the core connection promoting flexibility and freedom within the community.

Between Rick and Peggy, this shared ground has been instrumental to the development of

their own relationship as much as to the philosophy of the organization. “Rick and I have

always respected each other’s work, what each other did well…we valued each other and

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never questioned the values between us or the things we cared about…it helped us get past

our differences because we are different. We’re different in style, we’re different in what we

focus on…and it helped get us past the bumpy points of the company’s development in

those first six or seven years. Both of us were totally dedicated to who workers are and to

the value of empowering workers and supporting workers…it’s central to our being.”104

This essential valuing of humanity has been infused into the training program and imbued by its organizational members. Almost 40% of the staff at CHCA started as home health aides and have climbed the career ladder within the organization. Middle management is comprised of former aides turned nurses, assistant trainers, case coordinators or social workers. “We treat it very, very seriously. If you’re going to hire from within, you really have to spend a lot of time and effort to make sure that a person first of all is capable and that they succeed. And if it’s not the right move, then don’t keep them in that position because it becomes very detrimental to them, to the organization-everybody. There’s a lot of coaching that goes on for that individual to make sure they do succeed…people become comfortable here and know they’re going to get the support they need.”105

It is very clear that Rick’s dedication, commitment, passion and beliefs were at the

cornerstone of his conceiving CHCA, and subsequently, valuing personal growth and

development has become significant. Employees have experienced a great deal of personal

transformation since becoming part of the CHCA and ICS communities. Juan Carlos for

example, is a member of ICS. He is a mechanical engineer by training and has a gun-shot

wound resulting in a spinal cord injury that has left him disabled for life. Through his hard

work, spirit and vivacity for life, he has become a leader to many disabled persons in the

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group. “A lot of our friends get depressed easily…Carlos is amazing-I’ve never seen him in a bad mood since he’s been here…he’s been a real role model for a bunch of people that are not to be done in by their disability… and to watch this process occur is the most amazing and rewarding process for me, personally…most of us who care about progressive values learn that these values mean nothing if you can’t implement them…I wanted to create an organization that would outlive me and live for generations. I wanted to create an institution. Now, I think that’s no longer important. I want to create a really good place.

I’d like it to live longer than me, but I would like it to live or die based on what should happen for the people in it.”106

CHCA and ICS have promoted an atmosphere of authenticity and freedom for its people, enabling them to feel alive and filled with hope. “For a lot of people at Cooperative Home

Care, they felt good enough about shedding their fears and disguises after coming here…they were often judged negatively by people in the outside world as not knowing a lot…and the fact is that most of them are incredibly sharp and they definitely have a lot going on, but they also have hard lives…and I was the same way. The only thing that I may have given them is the belief that they actually could create some territory like this in a corner of the world…like me, I just needed a place to be. And these are the people I feel comfortable with…their stories are amazing and they’re amazing just because they are who they are…and they know me, and they feel comfortable with me. And I’m part of that world and that’s really what I feel best about.”107

The Culture

Cooperative Home Care Associates members’ own personal growth and development has

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not only helped shape the unique organizational culture, but has influenced its own

transformation significantly. Serendipitously over time, CHCA has become a work-based

community, a business which is held to the highest standards for work and a place where

people feel they belong. It is a culture of empowerment, humor and enabling people. “This

was borne out over the years by things workers would say and do…I realized what we had

created- it was unintentional, I thought I was just doing my job which was helping people

grow and develop and making people feel welcome and helping people feel like they’re part

of something, simply because that’s what I’ve always believed…we have had the opportunity

to create a place that people work at where they feel they are valued as human beings and

workers. It’s a place that’s really centered on their development and is really focused on

their being part of a community and having a workplace.”108

The culture at CHCA represents a strong dedication and commitment to the workforce.

Approximately 70% of the workers are owners and the rest serve as employees in the

business. Together they comprise an ethic that is devoted to the success and growth of the

organization. “The workers know that we’re a for-profit company and they work very hard

and want to be efficient and get good contracts. They’re loyal and have a low-turnover rate.

They realize they are much more dedicated than other firms so they exert that influence

when negotiating with the unions to getting up there on Capitol Hill to state their case.”109

Interestingly enough, the longer people work at the organization, a dividend payout becomes less important than the treatment and valuing of individuals within the organization and industry. “For example, we started to pitch at the regional meetings that we were going to have another good year; it’s always been about the dividends. Whatever we’ve done has always been about the dividend…we had a 401K program here but nobody really

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contributed any money because it was all self-contributory. So we suggested for the first

time that the company put money into a 401K-that we would take some of the profit, pay it

out in dividends and also put some in the 401K which is profit-sharing, meaning it would go

to everyone and not just the worker owners…the workers passed it, and now everyone

receives profit sharing.”110 Now, over 95% of the workers make contributions to the 401K plan.

Participatory cooperation stems from the community values and is highly contagious amongst management and staff at PHI and CHCS. “When a bunch of other special assignments come up whether it’s working with our different affiliates, fundraising or grant writing, anyone of us get involved even if we’re working on something entirely different.”111

At times, the accelerated growth rate and spontaneous project work can often seem overwhelming, yet resourceful talent is seemingly able to rise to the challenge. “The amount of work for everybody here(at PHI) just to keep up is tremendous…If I were in Steve’s

position, I would want to slow the growth a bit so that the staff can adequately handle it.

We’re adding staff quickly and we’re in a rush at times to get things done, but eventually it

does happen.”112

Collectively, worker-owners have learned to appreciate the mission and valuing of a for-

profit cooperative entity. Perhaps this process has been subtle, or possibly blatant. “In the

last few years I have found that people are resistant to empowerment…very often they don’t want it because they’re not comfortable with it and they’re not used to it. It means you’re taking responsibility for what you’re doing and a lot of people end up not being very comfortable doing that...it takes awhile for them to get used to it.”113 Recently, the Vice-

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President of Service Delivery (department responsible for assigning workers to cases)

recognized that overtime had gotten out of control. Some workers were not being assigned

cases and others were being paid overtime wages due to the oversight. “She was resistant at

first because she knew what it would involve. She was going to have to go to her staff and

ask them to work a little harder in order to eliminate some of the overtime. When she finally

presented it to her staff, they responded incredibly…they all came back with the same

response. ‘We can do this and we will do this because we know that if it makes a difference

to the bottom line, we’re going to see it at the end of the year.’ They cut overtime in one

week by 50%.”114

The culture has truly come to define the organization far more than its structure. Initially, the organizational structure determined the driving directives, players and their roles.

Eventually as membership grew, adjustments in the structure were made to accommodate this shift. Culture has risen to the forefront in directing the philosophy and mission. “What drives the organization is just trying to do better and just trying to make that job a better job for the home health aides. At the same time we are trying to create an environment within the organization that is a nice place to work and that the work we do is good…so we can all be proud of our successes.”115 What is now structurally done is a response to the culture and

contributes to the “…tremendous push-pull tension between the culture and the

structure.”116 The culture breeds a meaningful and communicative environment and many

members have become dependent on it. On the other hand, CHCA is a large and

sophisticated organization in terms of its operations, regulated by the government.

Accordingly, a balance is necessary to achieve the dual purpose. CHCA is working on

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centralizing its internal operations to become more efficient while continuously striving to

retain a sense of community that provides support and encouragement to its members.

The People

The Recruiting Department has stepped up efforts to hire home health aides due the

increased amount of work brought in by ICS and other organizations. “We usually find that

minority women, most of them on public assistance with three to four children, don’t feel

they can do that kind of work. They don’t feel like they can get back out there because

either their self-esteem is down or they have a man at home saying they shouldn’t

work…you get used to getting public assistance and so you get lazy…those are the types of

people that we try to attract.”117 To own something of value can help generate self-esteem, and at Cooperative, owning a share in the company is a very powerful feeling. “It makes you feel like you’re doing something and that you’re worth something. That’s what I think their

(CHCA) message is-they want you to be a worker-owner. Cooperative Home Care wants to give you back your hope.”118

“People here are very different and there’s very different subcultures…the beauty of

Cooperative Home Care is the spirit that’s in the air and because of the people that are

there…the boundaries that we created were all about who you let in and who you keep in.

And then you let them be who they are once they’re in. Unfortunately, that’s a relatively

unique way of running an organization.”119 Some home health aide workers have been at

Cooperative since their doors opened in 1985. Members are proud of their organization and its people and believe in the values that are derived from its labor. Julia Bethea began with

Cooperative in mid-1998 as a home health aide worker. She was on welfare and is a single

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mother with four children; no longer is she dependent. She has developed within the

organization and become part of its fabric, participating as a member on the PAG, DCWAG

and DCA committees and was elected to the Board of Directors in 1999. In her tenure, she

chose to follow a career path and alongside her home health responsibilities, became the

nighttime receptionist. “It became a little too much so I had to drop the home health aide

but I figure I can still help my other home health aides in their fight so I continued to be on

the committees.”120 Currently, she is working in the capacity of a records specialist, taking computer classes and is hoping to become a nurse. “I enjoy the opportunities that

Cooperative has given me and once they post another job, I can go for that too…I’m just trying to move up a little bit in the company, have a little bit more security…trying to get up there with Michael Elsas!”121

Sharon Martin arrived in 1999 and began as a home health aide. Within two years, she was

working in the office and became a staff member. Prior to her arrival, she worked at

another home care agency which did not offer benefits. “My girlfriend Bridget worked here

and told me about this place-she told me I had to come to this company, and so I came.

This place is incredible-there’s no company that I know where they open up the records and

let you see exactly where the money goes-we can know everything about the company if we

want to! It’s been so great, every time I wake up, I think I’m dreaming…I’m always learning

something new…I’m just so grateful.”122

Presently, Sharon works in the Service Delivery department performing data entry work and holds a seat on the Board. She values the opportunity to make a difference in other peoples lives and has the urge and kindness in her to want to help. “I have met a lot of good people

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doing this work and I’ve gotten really close to a lot of families-if you have any type of

compassion, it’s just natural…I’ve been in homes where you open up the cabinets with

roaches falling out-filthy homes and you try to tidy up…you just yearn to go back because

you say to yourself that you want to make a difference…and when you see a difference in

what you do in helping people, you feel good.”123 She wants to do better financially for

herself and her family and eventually go back to school. “I feel I have to do that for me.

Coming to this company made me see that…if you are around people who are doing

nothing then you don’t have any motivation to do anything. But I’m around smart people

and I feel that it’s time I do something and push aside the ‘oh, I’m going to fail at this’

attitude. Everybody here is so supportive of what anyone wants to accomplish!”124

A Recipe for Creation-In Retrospect

An organization’s development is best viewed in hindsight. Through its efforts, trials and errors, much can be gained from Cooperative Home Care’s maturity. As Peggy reflects back on her experiences, she believes a few major elements are essential to the long-term sustainability of an organization with a social purpose.

“Passionate leadership is foremost. You’ve got to have people who believe in whatever the social aspect is that they’re trying to interweave into the business…skill and dedication is important, too. I think that if you have all the goodwill and all the passion in the world, if you bring in the wrong people- you’re not going to get it right. I think there needs to be somebody who has a vision for the world and others who implement it…a passionate visionary like Rick and then someone like me who needs to be directed in that vision…I used to describe it as latching onto Rick’s star and his vision…I think the organization has to be adaptive. Passion gets you started and I think skill and tending to the realities is what keeps you going…and you have to make hard choices like firing people and holding one another accountable for their actions. I think you have to do that checking and holding yourselves as leaders accountable to that vision. You have to be genuine and you have to be honest-it’s an almost brutal capacity at times to be self-judging and self-accountable and assume that responsibility…it’s also that level of reflection that enables us to continue and create newer levels-it’s that ability to step back and evaluate and re-evaluate what is happening.”125

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The Future

Julia hopes the future brings entitlement to all members of Cooperative Home Care. “I really feel appreciated in this company and that I’m being paid according to my work. That’s all we ask…I hope that some day all the home health aides and staff get paid well and receive good benefits like they deserve. Being a home health aide is a strenuous job and I just think that we should get paid appropriately for it.”126

It has been a long journey for Cooperative Home Care, and they still have a ways to go in terms of effecting whole scale changes in the industry. An interesting problem, however, could arise if they achieve their ultimate objectives.

“In this business I think what propels us to keep going and going is that we’ve been down so long. There’s a school of thought within PHI and CHCA-what if we really get what we say we want to get…what if we get the salaries up to $20 an hour? Look what happened in the security business. The security guards were made up mostly of minority people. As soon as the pay got up to $20 an hour, all of a sudden there were a lot of White people going after those jobs…if the mission is to really be focused on minorities and welfare recipients which is our target population, if we really get what we say we want, is that going to be our target population anymore? Or does our target population become middle-class people turning it into a middle-class job?”127

Michael anticipates that Cooperative will have diversified their businesses in the future by providing health care services to assisted-living and continuum-care communities. He imagines that CHCA will make a significant impact on the health care union, possibly even eventually converting its agencies into worker-owned organizations. Ultimately, he hopes that home health aides will be doing more practical work as a paraprofessional than permitted by law today so they can play a much more vital role in people’s lives.

As the organization grows, visions become greater. Replication work is underway, changes in workers benefits are being considered and regulatory and policy changes have influenced

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the industry for the betterment of its workers.

“I do believe that as you grow and as you see what’s possible, you do create new iterations of what’s possible. We are poised to make a change about this part of the world and about these workers and about the work that they do that will survive me…if you asked me that seventeen or even ten years ago, I couldn’t have seen that. Who would have known when we started out that we were going to do replication work? Who would have known that work shortages would come and that it was an opportunity to talk to employers about changing their practices? If we’re able to make some real regulatory and policy changes, that’s what we’re about…so the ability to really seize the moment is huge. We’ve done a whole bunch of really good groundwork and then we can really make big changes because I do believe that change has happened. It’s a little bit, little bit, little bit and BANG and then a little bit, little bit, little bit and BANG! We’re in a building level today that’s really taking off and I think that when we do that it won’t matter if Rick or Steve or I’m alive to do that work. What I really believe is that we’ll leave a legacy with coming to work and I didn’t see that until the last four or five years. I do see the possibility of making real structural change for the future.”128

Rick continues to elaborate on his vision as he looks into the future about the ultimate positive social change for the home care industry. He can envision a new paradigm for the long-term care industry: For the consumer it would be client-driven care relating to the needs of families. Concerning direct-care workers, he hopes that disparity levels in wages and benefits are eliminated across the industry and opportunities for career advancement facilitate stability in the work place. For providers of service, he hopes that continuity emerges in the environment, enabling high quality levels of staff providing high quality levels of care.129 With respect to Cooperative Home Care Associates and Independence Care

System, Rick sums up his image in a brief statement.

“ We would be major actors within a system and ICS would have 5-7,500 members and that Cooperative Home Care would be doing most of its business and we grew together…that people with disabilities felt the sense of ownership over the organization in the way that Cooperative Home Care workers felt the sense of ownership, although this will not become worker-owner…ICS will be a consumer-directed organization. I would like to see us become an actor of significance in relation to our reputation…we are not rewarded in the marketplace and we don’t have the power of influence, in fact, if we have influence, we have it because of the reputation and belief that we say good things and are smart about it. But to have a fair amount of power in the marketplace and from our role in the marketplace that was commensurate and aligned with that influence for our thinking would be very nice. That is what we’re trying to do but it’s also another ten to fifteen years away….There’s

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something about my job at Cooperative Home Care and ICS-it’s to be the ambassador and a gladiator, the person who is the lead protector. My job is to protect the organization so that it can just grow really strong so that people can just be. Cooperative Home Care has good roots. It has really good roots.”130

1 Conversation with Rick Surpin, 02/25/03 2 Conversation with Rick Surpin, 02/25/03 3 Conversation with Rick Surpin, 02/25/03 4 Conversation with Rick Surpin, 02/25/03 5 Conversation with Rick Surpin, 02/25/03 6 Conversation with Rick Surpin, 02/25/03 7 Conversation with Rick Surpin, 02/25/03 8 Cooperative Home Care Associates, History and Lessons, p.5 9 Cooperative Home Care Associates, History and Lessons,p.6 10 Cooperative Home Care Associates, History and Lessons,p.6-7 11 Conversation with Rick Surpin, 02/25/03 12 Cooperative Home Care Associates, History and Lessons,p.7 13 Cooperative Home Care Associates, History and Lessons,p.11 14 Cooperative Home Care Associates, History and Lessons,p.12 15 Cooperative Home Care Associates, History and Lessons,p.12 16 Cooperative Home Care Associates, History and Lessons,p.12 17 Conversation with Rick Surpin, 02/25/03 18 Conversation with Rick Surpin, 02/25/03 19 Conversation with Peggy Powell, 02/25/03 20 Conversation with Rick Surpin, 02/25/03 21 Conversation with Peggy Powell, 02/25/03 22 Conversation with Peggy Powell, 02/25/03 23 Conversation with Peggy Powell, 02/25/03 24 Conversation with Peggy Powell, 02/25/03 25 Conversation with Rick Surpin, 02/25/03 26 Conversation with Peggy Powell, 02/25/03 27 Conversation with Peggy Powell, 02/25/03 28 Conversation with Peggy Powell, 02/25/03 29 Conversation with Rick Surpin, 02/25/03 30 Conversation with Rick Surpin, 02/25/03 31 Conversation with Paul Dieterich, 02/26/03 32 Conversation with Peggy Powell, 02/25/03 33 Conversation with Peggy Powell, 02/25/03 34 Conversation with Peggy Powell, 02/25/03 35 Conversation with Peggy Powell, 02/25/03 36 Conversation with Stu Schneider, 02/26/03 37 Conversation with Rick Surpin, 02/25/03 38 Conversation with Paul Dieterich, 02/26/03 39 Conversation with Stu Schneider, 02/26/03 40 Conversation with Stu Schneider, 02/26/03 41 Conversation with Stu Schneider, 02/26/03 42 Conversation with Stu Schneider, 02/26/03 43 Conversation with Stu Schneider, 02/26/03 44 CHCA ‘Worker Ownership Structures and Processes’, page. 1 45 Conversation with Michael Elsas, 02/24/03 46 Conversation with Stu Schneider, 02/26/03 47 Conversation with Michael Elsas, 02/24/03 48 Conversation with Michael Elsas, 02/24/03 49 Conversation with Michael Elsas, 02/24/03

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50 Conversation with Paul Dieterich, 02/26/03 51 Conversation with Michael Elsas, 02/24/03 52 Conversation with Paul Dieterich, 02/26/03 53 Adapted from Cooperative Home Care Associates, History and Lessons,p.1and 33 54 Conversation with Rick Surpin, 02/25/03 55 Conversation with Rick Surpin, 02/25/03 56 Conversation with Rick Surpin, 02/25/03 57 Conversation with Paul Dieterich, 02/26/03 58 Conversation with Peggy Powell, 02/25/03 59 Conversation with Michael Elsas, 02/24/03 60 Conversation with Michael Elsas, 02/24/03 61 Conversation with Peggy Powell, 02/25/03 62 Conversation with Michael Elsas, 02/24/03 63 Conversation with Peggy Powell, 02/25/03 64 Conversation with Michael Elsas, 02/24/03 65 Conversation with Michael Elsas, 02/24/03 66 Conversation with Rick Surpin, 02/25/03 67 Conversation with Rick Surpin, 02/25/03 68 Conversation with Paul Dieterich, 02/26/03 69 Conversation with Peggy Powell, 02/25/03 70 Conversation with Rick Surpin, 02/25/03 71 Conversation with Peggy Powell, 02/25/03 72 Conversation with Paul Dieterich, 02/26/03 73 Conversation with Stu Schneider, 02/26/03 74 Conversation with Peggy Powell, 02/25/03 75 Conversation with Peggy Powell, 02/25/03 76 Conversation with Stu Schneider, 02/26/03 77 Conversation with Paul Dieterich, 02/26/03 78 Conversation with Rick Surpin, 02/25/03 79 Independence Care System webpage: http://icsny.org/history.html 80 Conversation with Paul Dieterich, 02/26/03 81 Conversation with Rick Surpin, 02/25/03 82 Conversation with Michael Elsas, 02/24/03 83 Conversation with Rick Surpin, 02/25/03 84 Conversation with Michael Elsas, 02/24/03 85 Conversation with Rick Surpin, 02/25/03 86 Conversation with Rick Surpin, 02/25/03 87 Conversation with Rick Surpin, 02/25/03 88 Conversation with Rick Surpin, 02/25/03 89 Conversation with Rick Surpin, 02/25/03 90 Conversation with Julia Bethea, 02/24/03 91 Conversation with Julia Bethea, 02/24/03 92 Conversation with Julia Bethea, 02/24/03 93 Conversation with Michael Elsas, 02/24/03 94 Conversation with Michael Elsas, 02/24/03 95 Conversation with Julia Bethea, 02/24/03 96 Conversation with Julia Bethea, 02/24/03 97 Conversation with Paul Dieterich, 02/26/03 98 Conversation with Rick Surpin, 02/25/03 99 Conversation with Rick Surpin, 02/25/03 100 Conversation with Julia Bethea, 02/24/03 101 Conversation with Michael Elsas, 02/24/03 102 Conversation with Rick Surpin, 02/25/03 103 Conversation with Rick Surpin, 02/25/03 104 Conversation with Peggy Powell, 02/25/03

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105 Conversation with Michael Elsas, 02/24/03 106 Conversation with Rick Surpin, 02/25/03 107 Conversation with Rick Surpin, 02/25/03 108 Conversation with Peggy Powell, 02/25/03 109 Conversation with Michael Elsas, 0224/03 110 Conversation with Michael Elsas, 02/24/03 111 Conversation with Stu Schneider, 02/26/03 112 Conversation with Paul Dieterich, 02/26/03 113 Conversation with Michael Elsas, 02/24/03 114 Conversation with Michael Elsas, 02/24/03 115 Conversation with Michael Elsas, 02/24/03 116 Conversation with Rick Surpin, 02/25/03 117 Conversation with Julia Bethea, 02/24/03 118 Conversation with Julia Bethea, 02/24/03 119 Conversation with Rick Surpin, 02/25/03 120 Conversation with Julia Bethea, 02/24/03 121 Conversation with Julia Bethea, 02/24/03 122 Conversation with Sharon Martin, 02/24/03 123 Conversation with Sharon Martin, 02/24/03 124 Conversation with Sharon Martin, 02/24/03 125 Conversation with Peggy Powell, 02/25/03 126 Conversation with Julia Bethea, 02/24/03 127 Conversation with Michael Elsas, 02/24/03 128 Conversation with Peggy Powell, 02/25/03 129 Adopted from Direct-Care Health Workers, The Unnecessary Crisis in Long-Term Care, p.24-25 130 Conversation with Rick Surpin, 02/25/03

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Narrative 3: Greater Cleveland Community Shares

Genesis What is Community Shares?

Transformation Late 1980’s Early 1990’s Mid-late 1990’s

Development Organizational Culture

Member Agencies Cleveland Public Theater Environmental Health Watch

Workplace Site Lutheran Metropolitan Ministry

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Democratizing Philanthropy Genesis

To promote and maintain an open and integrated community of the highest quality was the impetus to begin Greater Cleveland Community Shares in 1984 and searching for alternative funding concepts was one of its greatest challenges. Through the resourcefulness of a handful of people involved in equality and social justice activities in the late 1970’s-early eighties, an organization was envisioned to serve society through means of advocacy and reform. This was the time in the history of Cleveland when community organizing was nearing its peak and became a major factor in creating change through grassroots activities for the greater Cleveland area. This was the Reagan era; community development was being funded through the federal government and grassroots neighborhood organizing groups were being de-funded because they were considered too radical for the conservative agenda.

In response to this, community organizing groups evolved into community development corporations in order to gain access to the some of the monies that were available, yet there was a need for something greater in order to support this movement of change agents.

In 1981, a few organizers from various neighborhood groups in Cleveland attended a conference held by the National Committee for Responsive Philanthropy, which consisted of a large delegation of labor and progressive activists. The main topic on the agenda was the development of alternative funding sources through workplace campaign giving as an antidote to the difficulties at the time in raising funds for social justice and advocacy groups.

These were people determined to achieve systemic institutional change in hopes of creating new equitable social structures in the community. United Way (a social service organization founded in Cleveland in the early 1900’s) had a monopoly on this type of campaign in the country, yet they were specifically dealing with direct social service for the community as

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opposed to advocacy. Chip Bromley (co-founding member of GCCS) was introduced to an

organization called the Cooperating Fund Drive based in Minnesota, and was inspired by its

founders and mission of workplace campaign activities as a source of funding advocacy

groups. He felt he could incorporate this concept into the Cleveland community particularly

if the Commission on Catholic Community Action ( led by Tim Hagan) would back him and

the idea. The Catholic charities, he soon discovered, received funds from United Way so

from 1981-1984, the idea was put on the back burner.

In 1984, two members from the Cooperating Fund Drive visited with Chip in Cleveland and

were instrumental in pushing for the creation of alternative funding sources to support a

social justice agenda in the community. Workplace fundraising could provide an

organization with the tools to cast a broader net and at the same time, foster the capacity to

remain focused on its commitment to social change:

“So, you’re trying to move off of whatever your tradition is. You do an annual fundraising to your members. You get a government grant. You get foundation grants. You’re looking for another way in which you can raise what are predominantly non-restricted funds for your organization so that you aren’t hemmed in by somebody else’s rules because most dollars from the government and foundations come with a condition about what you’re allowed to do with it…this enables us to increase our ability to provide services and we’re really only accountable to the organization, the board and our members as opposed to some third party out there.”1

Chip brought this concept back to several colleagues from various advocacy groups in

Cleveland including Lana Cowell (co-founding member of GCCS). “Let’s study the

issue…you know, how much more can we get hurt? I mean we’re not getting any money

now…and we’re not going anywhere so let’s try to take a look at this.”2 Lana, Chip and others put together a group of seven to eight individuals who took interest in pursuing the idea and were already involved in grassroots advocacy work to promote equality in the

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community. They began two years worth of research on the topic of workplace fundraising and as Lana describes it, “…what became very exciting was the concept of taking this whole workplace fundraising entity that had heretofore been monopolized by United Way since 75 years, and had started in Greater Cleveland…and to be able to use that source of funding for social justice as opposed to social service.”3 They needed funding in order to begin this venture and consequently approached larger foundation looking for financial support, with no success. Ultimately they received a grant of $5,000 from an individual donor named

Eleanor Gerson and each of the original organizations involved in the start-up efforts contributed $200 into the pot. They used $600 of the money to create a brochure and $500 to hire a one-person staff who had the sole responsibility of getting the word out about

GCCS to federal workers (the Combined Federal Campaign in Cleveland had just been launched in 1981).

At this early stage, their only source of donor money came from selling one another tickets to events, which of course they realized was not gaining new supporters for the social movement nor was it reaching out to a broader audience. As the momentum for the idea grew within the newly formed coalition, they began to solicit donations and campaign on the streets in front of the federal building to get started. The initial planning efforts focused on recruiting member agencies, working on the by-laws and finding workplace sites. With the grant and remaining capital from their own support, the now thirteen member organization launched full force onto the campaign trail and entered the realm of workplace giving. In the Fall of 1984, GCCS was incorporated as a newly formed federation with a mission to promote equality and justice in the Greater Cleveland community. The campaign was launched in 1985 and they raised $1800 for distribution to member agencies in the first year.

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Community Shares chose to focus on advocacy as opposed to social service for a specific

purpose.

“United Way turned into this model of the whole world is their client…organizing, empowerment and social change were not part of how you became part of United Way…they closed their doors, and didn’t want new members which created an opening for us. There was no way to put the new women’s groups in, domestic violence, the ACLU, Planned Parenthood- choice groups and issues …all these issues were out there and all really begging to have a place where people could do workplace giving… we really talk about the issues that are on the cutting edge of what it means to make change, and there’s always a tendency when you have a clubhouse to close the door…and I’ve been able to help people understand that by opening the door and keeping it open to new groups, we can be greater than any of our individual selves… …we also provide a mechanism to bring new young organizations to be part of this network of older, more established social advocacy groups…we give recognition, cash and a sense of place to those organizations who work for justice.” 4

The history of workplace fundraising dates back to 1913 with the establishment of the first modern Community Chest in Cleveland.5 During the civil rights era many models of

organizing, alternative funding organizations and federations were forming around the

country dealing mainly with fair housing, anti-discrimination and equality issues. In 1959,

the first alternative fund was formed, a combined health appeal. In 1964, the federal

government conducted the first Combined Federal Campaign and in 1968 the first Black

United Fund was organized in Los Angeles. The majority of these groups focused on

specific constituencies, for example, health care, women’s rights and equality for African

Americans. In the 1970’s, social action funds were being organized in Wisconsin and

Philadelphia and in 1981 the Combined Federal Campaign opened itself up to advocacy

groups. The environment was ripe for community development organizations to pursue

alternative funding sources to promote community based advocacy work, giving choice to its

constituencies and social justice activities through workplace fundraising activities.

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Tennessee Community Shares was launched and the next Shares organization was birthed in

Wisconsin. Greater Cleveland Community Shares was modeled after the Cooperative Fund

Drive as an independent workplace funding organization to raise money for social justice organizations that tackle issues causing problems in society rather than providing services to people affected by those problems. The entire network of Community Shares organizations yielded the same concept yet had no affiliation to one another. The National Committee for

Responsive Philanthropy (NCRP) was the core connection providing a forum for information exchange; they held national meetings inviting the various alternative funding groups to come together and exchange knowledge, conduct training sessions and present guest speakers active in the field. The Ohio group of Shares organization expanded beyond

Cleveland to Columbus, Cincinnati, Toledo and Lorain:

“What would generally happen is that some organization in these other communities would learn about us, some grassroots social justice group…a group that was doing similar stuff to what we’re doing, for example, a fair housing group from Columbus might know someone here at the Heights Community Congress (similar housing group) and in conversations, might learn about the Community Shares federation…and it usually means somebody expresses an interest…then NCRP would come into the community and start asking questions and trying to find out who does similar kind of stuff…the NCRP role was to form these new fundraising federations…anyway, at the end of the day, the interest had to come from within the community. There’s no way you can go into that community and start a Community Shares. Columbus for example, we did not start Columbus, but once they had a group of people that were interested in the whole idea, then we got involved…they started inviting us to help them get started…and we shared with them how we do things and that’s the role we’d play.”6

What is Community Shares?

“Greater Cleveland Community Shares is Cleveland’s only social advocacy workplace giving federation, whose purpose is to advance social justice by providing member agencies with a steady and growing source of operating income through workplace payroll deduction campaigns. These agencies are joined by a common mission: to address the root causes of social problems facing our neighborhoods, our community, and our region. Community Shares agencies provide education, promote health care, protect children and women, advance home ownership, train workers and find employment, build neighborhoods, and work to end discrimination…we foster awareness and acceptance of diversity so that liberty and justice is truly available to all…we work on behalf of the environment, the arts and voter

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education to assure a healthy and productive community…Our philosophy of change is based on education, advocacy and empowerment.”7

Shares was envisioned to be a grassroots organization embracing democratic values of openness, progressive and cutting edge activism, social change and reform. They believe the real driver around fundraising in the workplace is offering employees a choice to designate where their contribution dollars go; more choice equates to an increase in total giving. It was designed to be a choice-giving organization run by the constituency of its member agencies and people involved. “We are a non-coercive alternative for workplace giving, which hurts us…we don’t raise the kind of money United Way does because we don’t have the CEO’s in there twisting people’s arms, and we don’t encourage that, and we don’t advocate that…we believe people should have a choice.”8 Their role is to continue supporting the efforts of the member agencies through raising funds. Social advocacy is at the heart of the organization-it is about solving problems of society, advocacy on behalf of social issues and services delivered. As Chip Bromley says, “…The core of the structure, the people who are the heads of these organizations are really social entrepreneurs. They are people who are about creating change.”9 Rick Bastion, a former President of Shares and recent Board member recalls his first introduction to the organization:

“It was like the summer of ’91, and I had heard about them somehow, so I called them up and asked for them to come talk to me about beginning a workplace campaign, as I thought it would be engaging to our folks…they were a very intellectually curious population, with a lot of basic democratic values…I called them up and said come and talk to me about beginning a workplace campaign…It was the first time they had ever gotten invited into an organization…they appealed to me because I recognized them as kind nontraditional and kind of counter culture…they sort of reminded me of my free clinic groups, and I wanted to be a part of that, as I though they’d appeal to the employees of the organization I was working…it was about their advocacy stance, that is the agency’s work with populations and on issues that were committed to changing the basic conditions that were less than democratic, that were less than engaging, that were un-empowering…”10

Transformation

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Three major turning points contributed to the development, transformation and evolution of

Community Shares.

Late 1980’s In the late 1980’s, GCCS gained access to the county campaign. Interestingly enough, this was instigated by a column written in a local liberal newsletter which exposed corruption at the United Way agency. “So one Fall, he published the fact that United Way execs make all this much money and yada yada yada…that day happened to be when Tim Hagan (County

Commissioner) got a phone call from the United Way execs saying ‘Your employees aren’t giving enough money, and we want...and we expect…’ So Hagan just hung up the phone and he was furious. He said, ‘Get those Community Shares people on the phone…he called me and told me we were going to have a campaign.”11 The county had a donor option campaign and Shares was on the ballot, giving them recognition and voice in the community.

In 1989 they raised $89,000 and in 1990 were up to $100,000 due to these efforts.

Early 1990’s Shares focused their efforts on small donor donations and did not yet gain support from large foundations in the Cleveland area. This enabled them to form and flourish. “It made us really get down and kind of grab ourselves by our seatbelts and do the best we could do with what we had…we have had a benefit of having longtime small family foundations as supporters of Shares, and the fact that we were a co-op made us depend on the wisdom and generosity of the member organizations to get Shares off the ground.”12 In 1990, the tide turned and they received funding from the newly appointed Director at the Gund

Foundation. “It wasn’t like they were giving us $10,000 and going away…they were going to continue supporting us, and continue to underwrite our efforts to create this organization…so from that point and I think every year since, we’ve gotten anywhere from

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$25-$35,000 per year from them.”13 The Cleveland Foundation always refused to contribute

to Shares, yet when they achieved $1,000,000 in contributions, the Foundation donated their

efforts to the social cause. “We are probably one of the few Community Shares and other

social justice funds that gets major donor support from foundations.”14

The foundations’ support provides approximately one-third of Shares’ operating support and

15% comes from workplace funds; additional financial support comes from member dues and individual donors. They hope to eventually become a self-sustaining entity. “But the real dilemma is that if we don’t seek funds from outside sources-meaning foundations, corporations etc., then it has to come from our members or from the community as individual contributions…and if it comes from our members, that means it’s less we’re giving them to run their programs…and that’s why we exist…in our industry, self-sustaining means you live on your 15% that you take from your campaign…and nobody does that, but that’s everybody’s goal…and hopefully when we reach that, the question will then become how much money do we have to raise to run the organization on that 15%?”15

Mid-late 1990’s The governance structure which was that of a federation, resulting in each member agency having a seat on the Board. Most member agency representatives have a history of being nonprofit persons with some crossing back and forth between social service and social justice. The business acumen was expected to come from the Community Directors (who were elected by the Board to serve separately) and the Board of Trustees was chosen from outside the network consisting of people who would glom onto the values and principles of

Community Shares. Rick Bastion was invited to become a member of the Board and found it exciting to become involved in a very valuable nonprofit effort. He attended board

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meetings and membership committee meetings on a regular basis, realizing the need to affect change. It appeared that as the Shares organization was developing, the system of organizing was in need of transformation:

“It started off as a participatory thing, which was important at the time. Each member agency had a member on the Board, which made absolute sense. At one point Shares even became very insular- there were all these other activists and social justice people I admired sitting in front of me, and then there’s people saying we shouldn’t allow anybody else in because it might dilute their take of the pot. And I remember saying, you know, if membership in Shares is only about money, then this not the kind of organization I want to be a part of…and because it was just so offensive that with all the values that brought these people together, they’re arguing about whether or not an otherwise eligible agency might dilute their share of the take was just so insulting …there was something unholy about that. I felt like I had to be a mirror…”

We weren’t doing the basics anymore, and the Board meetings were becoming really disorganized…there was a sense of entropy going on, as things were not being managed as well…it became too loosely organized a system…at these meetings, if you were a representative from one of the member agencies, I might not see you again for six months because a proxy might be sent to the next board meeting. So we had about thirty people in the room-I never ever knew all thirty of those people, or what they did or where the hell they were from. So there’s this who’s who discontinuity thing beginning to emerge…this was serious, because if you want to get some serious money, you have to start doing things differently…and we had a good core of people who were always there, and we were starting to have some really important debates about the core objectives, like goal setting for example…we wanted to make sure that whatever goal we set we could achieve…all of a sudden there was a recognition that there was a strong vein of conservatism in this nominally activist, liberal, democratic organization of formerly young people…

One of the other things that Tom and I changed was we got very purposeful on selecting community directors for specific business skills, management skills, organization change skills, marketing, public relations…Shares is small enough that you can come to Shares and exercise those skills in support of social change. We’re smaller players in bigger organizations outside… we tend to have liberal sympathies, and you know, pals who move in social systems that are more consistent with where Shares membership comes from.”16

Shares began discussions about reducing the size of the Board (which at that time included approximately forty persons) and focusing more on marketing and public relations. “We switched from the member board to the elected board…and it was due primarily to the fact that we were growing and that our board was not a very committed board because it was an appointed board…”17 Their resources were getting allocated into a space that did not

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moving the agenda forward. “We got caught up in this whole governance trap which was

we’re all governing something that didn’t need governing, a cycle of sorts…for example at

campaign time. That’s where all the resources and energies ought to be, not at board

meetings once a month.”18 They convened a meeting which brought together the executive directors, member representatives, staff and trustees. The overwhelming response was to change the governance structure from a federation to a representative organization, entitling some member agencies a seat on the board but not all of them. The Board was reduced to a minimum of sixteen members to a maximum of twenty-five. They wanted to build on the intellectual capacities of people who had the skill, knowledge and acumen to lay the groundwork. “We added people to the Board and everybody came with new ideas about how to do things.”19 The structure of the Board changed to a 60-40 split; a minimum of

60% of the Board members were to be made up of member agencies (elected by the existing

Board and members) and 40% from the community. This maintained a majority membership influence in the governance of the organization while simultaneously allowing third parties to contribute feedback on its operations and functioning within the community.

At the end of this restructuring, the Board consisted of twenty-five members. “We reconstituted ourselves…we didn’t lose any of our principles, but we got more focused.”20

It was the dedication and commitment of people to the movement that continued to help the organization move forward. Each of the member agencies understood the principle.

“They’re giving part of their own political capital to assist in the growth of something bigger than themselves, which is Community Shares.”21

Throughout the organizational restructuring process, Shares often lost their direction which

ultimately enabled them to refocus on the bigger picture. “It got caught up in its own

governance and kind of lost sight of its mission which was workplace giving…it was

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consuming a lot of resources running itself as opposed to what it does which is raise money

for its member organizations…as we went through the process, it gave everybody a chance

to reflect and say but why do we exist as an organization…that is the sort of downfall of

member-run organizations- your personality is sort of the patchwork for everybody who

belongs to you. So what is your identity independent of them when you’re a federation, and

then not? It’s difficult, and we realized this was an additive process, and not in opposition

to.”22 It was not a smooth transition to the new governance structure. Shares had been started by members and it was always member-owned and member-operated. Distrust was breeding and it became clear that member agencies needed to re-involve themselves in constructive ways for the future. How did Shares bring different talents to the Board so the

Board could become more effective? “In some ways it sort of went against the politics of social justice which is everybody has a voice, and everybody is invited to every meeting, and everybody has a vote…at the same time, it wasn’t effective about moving the organization forward…you cannot get to the next level of what you want to be because you can’t create a governance in the process that gets you there…”23 The organization moved toward a consensus type of management reconstituted by a different set of players. This entire transformation appeared exciting and seemed to instill a sense of confidence consistent with maturity and development for the future.

The next year, Shares significantly increased their contributory dollars compared to the prior year; they became more efficient, added skills to the board and replaced staff with better staff in time. Labor was divided and role clarity refined. “It was no longer good enough just to think Shares folks are cool, you have to be able to bring something, contribute something…and I think that was huge.”24 In the beginning, it was enough to simply have

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the passion to effect change. As Shares grew, passion was not enough but the know-how to

drive that passion combined with talent to make it grow became evident. Shares began

executing multiple campaigns, managing money, building databases and other hard business

functions more efficaciously to support the organization. They began developing cleverly

around organizational functions which has continued to increase their effectiveness today.

Several new acts of service were created in response to the transformation of Shares’

organizational structure. They created alternatives to board membership as a connective

tissue for members. Three membership meetings are held annually and Executive Director

meetings held quarterly. Shares aspires to become as much a network for social change

groups as a source of funding; they enlisted and funded Business Volunteers Unlimited

(nonprofit entity that is a model for communities to engage in supporting nonprofit efforts) to conduct training for Executive Directors at member agencies. They hope to eventually develop enough operating support either through endowment or the development of a seed fund to help promote social change agents begin their own venture. This is all above and beyond their traditional workplace giving campaign programs to raise funds for advocacy in the community.

Development

Community Shares has traditionally been a grassroots organization itself just like its member groups. Contributions in the amount of $300 from a small base of donors is typical. Shares struggles with how to enter more privately-owned workplace sites rather than limiting themselves to the public sector. Shares continues to grow by adding new member organizations in hopes of becoming a greater force in the community. Initially, the primary

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workplace sites have included government agencies, universities and legal offices because

they understand advocacy work more so than other professional groups. “They tended

towards those public entities where gaining access is not a big deal because you can kind of

force the issues…”25 Corporations are slowly entering the Shares workplace environment, as this arena has been monopolized by the United Way workplace campaign for years.

Presently they are interviewing 15-16 prospective member organizations which in itself breeds new challenges. Adding members requires more workplace sites and remains a continuous balancing act. “We really need to get into more workplaces because if we’re in front of more people who can give, we’ll raise more money…if we added one-third more organizations, in order to keep funding at the same level for everybody, we’d have to have one-third more money given in the existing workplaces...”26 A small number of large corporations exist as part of the network but typically it is the smaller to medium-sized businesses that participate as a workplace site. Shares and United Way compete for limited funds yet the models for funding social service and social justice are changing. United Way continues to go after the big dollar donor while Community Shares continues to focus on the small or medium sized donors.

Organizational Culture

Shares and the member agencies are recognized as a liberal community of nontraditional social change artists in Cleveland, contributing to their strong cultural identity. According to

Rick Bastion, “…we are part of this rich center of this social change movement in Cleveland, and it is very representative of how things should be going on in other parts of the country…the members’ primary passions are their own agencies, and Shares is very instrumental for them. However, there is a sense of community that’s drawn from it, to the extent that they’re pursuing the social justice goals that we espouse.”27 They share a passion

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for positive social change and justice and believe they can and will make a difference.

Thomas Hawn recalls “…the people I met in the process of getting involved at Shares

appealed to my politic…because it was about social justice.”28 The member agencies reflect

the fabric of society which reflect the texture of Community Shares. “You have to do the

work to make the organization grow…and you have to do all the common things to build

the Board, and to get the volunteers and to get the workplaces…it’s a step by step process,

and you just have to keep doing it.”29

Thomas Hawn and Chip Bromley describe Shares to be very much like a cooperative. Each

member agency donates time and pays member dues to support Shares’ operations. They

are required to donate 72 hours worth of volunteer work per year to the organization,

“…that’s part of how Shares stays alive so that we can raise money in workplaces to give it

back to the organizations. If those organizations didn’t give their 72 hours, we’d have to pay

somebody to gather speakers or deliver campaign literature, serving on committees, etc…it’s

very much volunteerism in action in order to make all those pieces and parts come

together…we look at membership as volunteerism…it is in tapping into the strength that

exists elsewhere and being able to bring it into the organization…”30 The volunteer committees include Membership which is responsible for vetting and accepting new members and ensuring existing members are meeting their requirements. The Access committee helps to create new worksites and the Campaign committee helps run campaigns for donations. The Development committee does fundraising for operations and the

Committee on Trustees deals with governance issues. Board members have several responsibilities; they ensure money is spent wisely and make certain the rules of membership

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are followed. The decision to accept new members is not made by the Board, yet they do

review the candidates.

Shares has impacted society and reawakened Cleveland’s awareness about social advocacy. It

continues to legitimize workplace giving as part of an overall philanthropic effort, and they

believe their methods are more effective and ethical than what exists elsewhere. “Workplace

giving is our only source of funds for our agencies…we use other sources of funding for us

but not for them…that’s why our agencies want us to exist- to do workplace fundraising

because that’s what they don’t do…they do everything else.”31 Shares has the power and fortitude to keep reinventing themselves particularly in response to change and the needs of the member organizations. They believe their stance on social advocacy is as important as the social service industries, challenging institutions and making them accountable to the people they claim to serve. They provide funding to their member organizations (from

$10,000 upwards to $50,000) which pays their rent, turns on the lights and keeps the phones ringing. Foundations have been challenged to think differently about social problems in the community. “Democratic institutions are strengthened by the work of Community

Shares…and we provide a network for those kind of groups that do that type of thing…foundations feel this is an important way to address the problems and not something to be afraid of…it’s helped to strengthen them as well.”32

Community Shares is in the top 10% of nonprofits in Cleveland in terms of the amount of

fundraising and distribution. Three methods of contributing to Shares include designating a

contribution to member agencies, giving to the operational fund which supports Shares’

efforts and itself as an organization and lastly, giving to Shares to be divided equally amongst

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the member agencies. Each member agency pays dues and part of what is donated to the

operational efforts of Shares goes toward administrative costs. “The people that give to

Shares are not just supporting the individual organizations. They’re supporting a concept

and a movement and a whole idea of democratizing philanthropy.”33 Presently there are thirty-four member agencies, over 150 workplace sites and since its inception, Community

Shares has distributed over $5,000,000 to their member organizations.

The most illustrative method of gaining insight into the organizational practices, livelihood and raison d’être of the major stakeholder groups involved with Community Shares is to share some personal stories. James Levin, Executive Director and Founder of Cleveland

Public Theater and currently on the Membership Committee of GCCS and Stu Greenberg,

Executive Director, Environmental Health Watch, an original founding member agency of

GCCS are current member agencies. Dan Elliott served as Past President and current Board

Member of GCCS and is the Director of Advocacy at Lutheran Metropolitan Ministry, a workplace site.

Member Agencies Cleveland Public Theater (CPT) “Dignity”

James has a varied background. He is a lawyer by trade, an actor/writer/director by passion and a socio-political activist at heart:

“I was in New York as an actor from 1979 to 1982 working at a place called Café La Mama…a very well known experimental theater off-Broadway, whose work is often very challenging of the status quo and who also opens its doors to theaters from all over the world who otherwise don’t have a venue…I moved back to Cleveland in ’82 wanting to form a theater similar to that of La Mama but with maybe a little bit more emphasis on political activism…I’m much more, by nature and experience, a social or political activist more than a theater entrepreneur…and I always thought this kind of theater as a way to do, as a means of activism and to effect social change and to enhance awareness of political and social issues of the day.”34

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James’ sense of activism stemmed from his high school days and anti-war agenda coupled

with his upbringing, the books he read and the movies he saw. During his days at La

Mama, he was surrounded by a wide range of culturally different, unconventional artists:

“Everybody would always be talking, talking about cultural stuff and political stuff and social

stuff…they were very experimental and were a little bit underground…they were more

about participating in plays about bigger issues and concerns…so there was just a sense of

activism brewing in this place where different energies were coming together in a kind of

combustion of ideas and cultures.”35 A sort of collective activism.

My visit and conversation with James Levin held on 01/09/0336

James matter of factly stated that his organization would never be self-sufficient, however,

he expressed his hope to achieve a level of sustainability some day. The Cleveland Public

Theater is located on the West side of Cleveland in a neighborhood that James describes as

“a particularly blighted area”. Two adjacent buildings make up the CPT; they moved into

the first building in 1984 and acquired the building next door in 1995, which is still in the

process of renovation. As I walked through the narrow hallways, large stage rooms and

through the corridors that comprise the theaters, I was amazed to see the level of excitement

radiating from the employees. They were energetically involved in moving the seat sections

to the appropriate location in one area and working on stage designs in the other or fixing

the lighting in another. The office was filled with a variety of people that were preparing for

the next production or putting flyers together or contributing in another way to the sense of

purpose alive and essential to the core of their existence. I was introduced to many of the

people at CPT and after the tour, we had a chance to sit down and talk about the

organization in greater detail.

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‘CPT’s Mission: CPT seeks to inspire, nurture, challenge, amaze, educate and empower artists and audiences in order to make the Cleveland Public a more conscious and compassionate community.’37

James elaborates on the mission by poignantly referring to the core and heart of CPT: “

We’re rare in that our mission is to enhance the consciousness and to enhance compassion in the community. Our mission’s not to make plays. Our mission isn’t to have gallery exhibits. Our mission isn’t to further the career of artists. Our mission is actually to make this a better community. We’re an arts organization with a social cause of a mission…to us, the cultural aspect is really a means to achieving what the mission is.” CPT offers a

‘collection of works for the stage that blur the boundaries of the social order’38, producing five-six plays and two-three festivals per year. James is fully aware that not all of their performances will be successful and nothing they do is a professional quality production, but they pay artists relatively well and emphasize using local artists from the Cleveland community.

There are three different ‘columns’ of the organization, including Production, Presenting and

Community Outreach. The Production arm is responsible for choosing a play and the concept for the play-they hire the director and the designers, often help cast the production and have artistic control of the entire product. James and Randy Rollinson (Artistic director,

CPT) often share the responsibilities of writer, director and producer and as James says,

“…we’re organically involved in producing our CPT pieces of art.” The common theme that underlies all of their productions is the strong presence, consciousness and awareness of a social order; their intent is to make a cultural, economic and/or political justice statement.

For example, a recent play entitled Hedwig and the Angry Inch is a rock musical about a sex

operation gone awry, and “it ends with a meaning about tolerance and diversity…accepting

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people for who they are, accepting oneself as to who one is and with whatever deformities or imperfections one might have…as a means of fullness. “ The production entitled One

Flea Spare relates social and political issues of the past with the present. It deals with social class issues during the time of the Dark Ages and the Plague, relating them to current day issues concerning aids, access to medical health care and the quality of life for the haves compared to the have-nots. Discordia is “…very irreverent…it’s a new play-a political, musical satire…whose meaning is related to human kindness” with a social comment and political bent strewn throughout. They received a significant amount of funding to produce

Blue Sky Transmission: The Tibetan Book of the Dead from several sources including the

Rockefeller and Pew Foundations, the National Endowment and various local foundations.

This made it possible to attain ten professional actors, a nationally acclaimed composer to create the original vocal score and a good director for this production. It went very well in

Cleveland, and James took it to La Mama in New York around Christmastime which was not as successful. “We didn’t spend enough time the month before the show opened to do some grassroots marketing…when you have a play with this title around Christmas, anything with the words ‘Buddhist’ or ‘Tibetan’ or ‘dead’…its rough…this is really a play about mindfulness, tolerance, patience, living a life of compassion and not living a life based on ego, not living a life based on consumption and the more superficial aspects of life…”

The second arm of CPT, Presenting, refers to the artists they present to an audience. These include artists such as Terrance Finley, Annex People, the San Francisco Mime Troup, the

Tibetan Nuns from Katmandu, Blue Man Group and others. “They have their own complete piece of work, and we think that for some reason aesthetically, socially, politically they should be seen in Cleveland and we’re probably the place where they should be seen.”

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The members of CPT pay close attention to the current social and political climate taking

place nationally or internationally and provide artists advocating a stance with a venue, which

they may not have otherwise. CPT is then afforded the opportunity to integrate their work

into the Cleveland community.

The third arm of CPT is Community Outreach, of which there are approximately fifteen

educational programs in total. This ‘commitment to community lies at the heart of CPT’s

mission…ensuring that people from all walks of life can become involved as artists or

audience members, creating a microcosm reflective of the richly diverse community of

Cleveland and serving the needs of those beyond the scope of many other performing arts

institutions…’39 The programs are designed to provide training, access, exposure and experiences in the performing arts to people who otherwise would not have the opportunity and involves about five-hundred participants (mainly teens and disadvantaged adults) within inner-city schools, neighborhood centers and public housing centers. It requires CPT members going off-site to several facilities from two-five times per week and each project can last anywhere from six to twelve months during the year. This is important to CPT as they want to become integrated into the fabric of the communities they serve. Training for example, involves exposure to very basic self-expression skills such as movement, vocal training and literacy enhancement which often takes up to two months. Over the course of the next few months, a new script may be developed based on some of their own life experiences. “We give them tools for self-expression, and then they self express…then we actually take the material that they’re evoking and shape it- we don’t tell them to write the play…we sculpt it into a play. They perform it…they tech it, they help design it, and they might construct the set, the costumes, and even the stage-managing…they might even help

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to videotape it, which sort of gets them involved in all aspects of it…as for us, all we do is sculpt it, edit it and direct it.”

The organic evolution of CPT appears to be very pronounced. The STEP Program (Student

Theater Enrichment Program) offers advancement within the CPT system. Students who have graduated from a housing project, have spent three to four years with CPT and want to pursue a career in performing arts are welcomed into the STEP program and are offered a small stipend to “continue to do more intermediate and more advanced work and then actually tour…some of these kids go on to college, study theater, sometimes intern here, work here, eventually sometimes even join our staff, which has happened two, three times now…so it’s important that they know that it’s a possibility that they can actually become part of our family and filter up through this organization.”

I asked James what he valued most about his work. He thought for a moment, paused and became introspective. His response was very self-effacing and filled with emotion, thoughtfulness and meaning. “…Watching how these guys who had never been in a theater in their life respond to this kind of training and self-valuing. All of a sudden there’s a light that goes on with these guys at some point…when they realize that their stories…are actually important…and who they are is important…and what brought them to Y-Haven

(substance abuse program) and their struggle now to overcome addiction is important, and that it has an effect on other people and can influence other people. And people are looking up to them now because of what they’re doing. And there’s a certain kind of a gravity and self- value that becomes engaged...when this happens, I certainly have a sense of gratification that’s much greater than getting a great review from a play, but that’s me…for me personally, this is the kind of work that is more gratifying than anything that we do.”

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There were two major events that transformed CPT according to James. The first was the acquisition of the adjacent building in 1995, which he believes endowed the whole organization with a different sense of possibilities. “Because instead of just using the second floor as sort of a smaller space here, we knew that we could create something of a different stature in the space next door.” James hired a theater consultant to help with the renovation project for the new building. Ironically this was also a time when James felt he had experienced a “severe burn-out” as he was still practicing law and working full-time at the theater. In addition to the consultant’s primary role concerning the theater, he also seemed to provide James with a sense of therapy which helped him get in touch with his original impulses in creating the theater. Through this process, James ended up reaffirming his own commitment to the CPT and gave up his law practice to focus on running the theater. The second event was hiring Randy Rollinson in 1998 who was formerly with a New York theater. He joined CPT as James’ Assistant, proceeded to become the Producing Director and in April 2002 became the Artistic Director. As James recalls, “…finally getting somebody involved as a partner who is really experienced, had considerable theater savvy and who was used to running his own show. It was really an invigoration of an infusion of energy and skill that we desperately needed…gradually over the last three years, I think that without question our productions and the facilities themselves have been more professional and more polished in their presentations…it’s been a very successful partnership.”

CPT delivers services to the underserved and in turn, CPT is a recipient of their ideas and energies. This is reflected in the diversity of their organization and their audiences. Through partnering with different cultural groups and disadvantaged communities, CPT has been able

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to express their world to the outside world. These groups often end up having a major presence at CPT, from the boardroom to the theater. With respect to the American Indian community, a relationship that has been nurtured through the years, several American

Indians have served on the Board. “It’s a great thing just to make sense of who they are historically, culturally, spiritually…to have that kind of sensibility into our sphere is a great thing.” With respect to the substance abuse program, “…to have these people who are in recovery becomes so much the fabric of who we are. It endows us with a greater perception and sensibility that we otherwise wouldn’t have. We’re a better organization from having these people being a part of it.” It appears to be a self-nurturing process for CPT, one that comes in tandem with society.

In their twenty plus year history, CPT has inspired and cultivated artists to venture out and develop their own niche in the performing arts world. Some have begun arts organizations such as the Theatre Labyrinth, Ground Zero and The Repertory Project and other have contributed to the creation of several national and internationally recognized projects including the Performance Arts Festival in 1987 to Women’s Voices, Women Dancing in

1993. For the future, James hopes to have cultural arts programming available in every school, public housing facility and neighborhood center. He would like to see that a responsive regional arts council is established in Cleveland and eventually, he hopes to be able to pay his bills and even someday, become self-sufficient.

CPT and Community Shares CPT joined Community Shares primarily to benefit its community Outreach Program

(presently, they are the only cultural arts organization part of the Shares network). Why did

James choose to become a member agency? “The money…it was purely the money. Money is incredibly hard in Cleveland, Ohio. We’re the only major urban area in the US that does

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not have a regional arts council…the fact that we’ve supported this thing for twenty years

has been like an unbelievable struggle.” James was approached by Shares as CPT was

reputed to be an activist organization and James was well known as an advocate for social

justice. He feels very connected to the advocacy and social justice agenda promoted by

Shares and is glad to be aligned with similar organizations part of the network. The five

prominent values and virtues that James believes are common to both CPT and Shares

include honoring and respecting personal dignity; economic justice, or honoring the plight of

disadvantaged people; social justice issues; cultural justice so Cleveland can experience

experimental and innovative new work at CPT which will help unveil a sense of limitless

cultural possibilities and urban renewal, as CPT advocates “a kind of an anti-sprawl, pro-

urban core, fix the inner city issue, which is very much part of our activism…we’re very

specifically and intentionally here as opposed to anywhere else.” At present he is on the

Shares’ membership committee in hopes of attracting and encouraging other cultural arts

organizations to join the community.

Environmental Health Watch (EHW) “Environmental Justice”

Stu was part of the original planning group for Greater Cleveland Community Shares through his association with the Ohio Public Interest Campaign. According to Stu, EHW may not be considered a founding member agency, however, they were definitely there at its inception. He met Lana Cowell who he remembers had a knack for finding and pulling together groups that embody social change as part of their rubric.

The history and evolution of Environmental Health Watch is an accumulation of precipitating events contributing to its creation, collaborative participation in achieving and

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developing its objectives and futuristic vision acting as a catalyst for producing and advocating for systemic social change in the community and the environment. EHW is a nonprofit public interest organization based in Cleveland, Ohio. Their core program focuses on pollution and their advocacy agenda concentrates on housing-related health hazards of children living in substandard housing and encouraging industries and legislature to adopt strategies for chemical accident prevention. They are a multi-faceted group that work with other entities to provide information assistance research in cooperation with university affiliates. Their advocacy work stems from collaborating with advocacy coalitions and demonstration projects are coordinated with various governmental/public interest associations.

‘EHW’s mission: Providing information, assistance and advocacy to protect and sustain human health and the health of the environment.’40

EWH was founded in 1980 by a constituency made up of local health groups, environmental associations, public citizen interest groups and advocacy organizations. Their directive was to inform the public and raise the awareness of local health concerns related to damaging environmental stimulants affecting health and the environment. In 1985, EHW was incorporated and has since been funded by private foundation and government grants, government contract work, contributions, fee for service contracts and Community Shares.41

My visit and conversation with Stu Greenberg, held on 01/10/0342

In 1980 Stu worked for the Ohio Public Interest Campaign, the largest consumer environmental organization in Ohio. At the time, there were plenty of issues associated with improper disposal of hazardous wastes. The federal government began to regulate the disposal of waste, resulting in big fines and major liabilities for improper disposal:

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“…so barrels of stuff were showing up all over the place and nobody knew what to do with it because it all of a sudden became costly and a liability exposure to dispose of it…’midnight disposal’ is what it was called- manufacturing companies would send a truck filled with commercial waste disposal in barrels, and would come and drop off some drums usually in a poor neighborhood or an empty lot. There was a particular incident in a neighborhood around here, where a bunch of barrels showed up. And that sort of precipitated a number of groups to come together that were advocacy groups like the Housing Authority, health groups like the Lung Association, environmental groups like the Sierra Club…and then also some agency people, health department people and the environmental agency people came together, all around the common issue that they were starting to get calls about these kinds of things, and nobody knew what to do…there was no organization that could do the advocacy, to try and figure out what to do about these problems, as no one had that as their mandate. And so the idea was to set this group up, at the time it was called ‘The Council on Hazardous Materials.”

Local citizens felt an “outrageous violation of people’s neighborhoods and space” with respect to the midnight disposal campaign. It was clear that these incidences were taking place in the poorer neighborhoods, “on the correct assumption that there would be a lot less scrutiny and follow-up enforcement, and that it would be easier to do it there. So I think that’s what juiced up the people that were involved in the thing.”

The impetus that brought this combination of public citizens and agency groups together was that “ordinary citizens were confronted with an impossible barrier and no one knew what to do about it.” There was a lack of resources within the various government and environmental organizations combined with a practical demand which generated no readily available organizational response; no one knew how to combat the issues. The coalition of groups and individuals wanted to set up a clearing house of sorts, an advocacy and assistance group that would address the hazardous waste problems. They operated as a voluntary group for some time and it became clear there was a need for staffing and funding. In response to this, Stu amongst others founded Environmental Health Watch. The reason for this as he describes it, “…was an inside-outside strategy…it was necessary to put pressure on the agencies…it was the agencies who told us that they needed somebody to put the heat on

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them to do something, for anything to get done. There needed to be some coherent message to the agencies about the need to develop programs, the need for greater enforcement, the need for simply better public education about what to do when they’re confronted with these situations…the citizens needed a place to call that had answers…the inside people at the agencies were saying that they were limited in what they could do without some political pressure…the outrage factor from the outside needed to be goosed up a little…so that was a nice invitation.” Stu served on the Board of EHW for awhile and a few years later came to work full-time in the capacity of Executive Director.

EHW held public forums and meetings and discovered there was a definite need for their services. Beyond the midnight disposal issue, people had other questions about environmental health concerns. They were worried about asbestos in the schools and radon issues and the Health Department was not equipped to respond to them. The public was not confident they were getting credible answers from the state agencies, so it was clear there was a niche for EHW to make an impact. The EHW group wanted to help create, affect and at times change public policy on environmental matters. The idea was to become an information resource and use that as a basis for formulating public policy while simultaneously acting as a source of information for the general public and other agencies.

Their outreach extended beyond the citizens within the community to other agencies and organizations.

Stu describes the evolution of the organization as flowing from one era to the next. In the

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first era described earlier, the original intent envisioned at the onset was largely a community organizing activity to help pull together community groups that would confront the environmental issues. It evolved into something beyond that:

“We would provide the technical assistance to existing community groups to be able to take this on as a part of their activities, or a part of their service to their constituencies…it didn’t make sense to create another group but to help the existing groups that had a natural place there, to help give them the capacity to respond to this new set of issues so that our role was not to organize but to provide the information and assistance about the substantive questions of these hazards and what to do about them and what was the regulatory structure and what are the avenues for redress for that kind of thing…I think it evolved that way partly due to the temperament of the people involved…the post-hoc rationale was that it’s better to equip existing organizations that are ready and have an organic, authentic connection to the community, with the capability to handle these new issues and strengthen them rather than creating separate organizations dealing just with hazardous waste issues.”

This second era of technical assistance was an effort to “be the one-stop shopping place for all environmental health questions…our role was primarily information gathering and giving; trying to take technical information and translate it in a way that people could understand and act on it.” But this type of service deemed unnecessary because other environmental emerged to focus on these kinds of issues allowing EHW to direct concerned citizens to them for answers.

The third era began in 1990 and continues today. It entailed a deliberate priority-setting process created through a strategic planning initiative. EHW chose to focus on three substantive areas including housing related health hazards, air-pollution and chemical accidents. Through research, advocacy and demonstration projects, EHW is able to continue making an impact on environmental sustainability. These projects are in collaboration with groups such as the Lung Association, Health Department and Public

Housing coalitions. Together they created new models of accomplishing their objectives such as delivering a service and then conducting a feasibility study to evaluate its benefits.

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EHW does some pilot work and if it seems feasible, they demonstrate it can work on a larger scale. In essence, EHW conducts research to develop model programs and then partners with an organization to demonstrate the project, eventually working on implementing the results into the organization’s practices.

EHW often acts more as a research arm as a prelude for project exposure. They are considered a model for other agencies and environmental policies:

“For example, we’ve done a number of projects with environmental triggers for asthma, things like dust mites and cockroaches and mold. So we worked with the city health department to develop a project to piggyback those kinds of interventions onto their existing lead programs. In other words, they already had a program to go out and deal with lead hazards in homes, and we said ‘well, it’s the same kids, it’s the same homes, similar kinds of interventions, so let’s combine them.’ We worked with them to develop that model and then created a demonstration project. Now, that’s been integrated into the way a number of other organizations are dealing with lead and they’re combining lead and asthma and working on them together in a more integrated approach.”

EHW received a grant from the U.S. Environmental Protection Agency and developed a project on household hazardous waste disposal. “People have things in their homes which should not be disposed of with the ordinary rubbish; pesticides for example, should not be put down the sewer. We tried something new- we publicized the fact that this is dangerous, and this got people to bring their stuff down, to dispose of their hazardous waste properly…so what we demonstrated is that people would do it…that people would indeed come…and then we worked with the county to establish that as part of their regular way of doing business…their solid waste office developed a household hazardous waste program that was modeled on ours, and now that’s the way the county deals with that.” The work

EHW has done on inherent safety has been so profound, they were able to move it onto the national agenda for further deliberation and action.

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Developments in society has given EHW more opportunities for growth. From 1985-1990,

EHW sponsored a series of conferences entitled ‘A Blueprint for a Healthy House’ which brought together health, housing agencies and advocates to look at common issues. The healthy house model took on a life of its own. HUD adopted it as the blueprint for their newly created Office on Healthy Houses and they have created a series of healthy-house grants of which EHW has been the recipient of many times. EHW has also acted as a fiscal agent for start-up organizations. Some of these organizations grew out of the work done in collaboration with EHW, but Stu refuses to take credit for being their ideological agent as well.

For the future, Stu is contemplating the next steps. He would like to combine environmental justice with ecological criteria in hopes of producing positive environmental changes. Pragmatically however, he is in discussion with organizations to merge and create an institute in Cleveland that would pull together a number of groups working on sprawl, green-building and ecological design in order to conduct research, publish and engage in demonstration projects. It would be a combination of economic and community development wrapped into an environmental ball under the umbrella of ecological design principles. Should this occur he will pursue bigger national grants in hopes of receiving funding in the millions of dollars as opposed to a few hundred thousand for the aggregate organizations.

Workplace Site

Lutheran Metropolitan Ministry (LMM) “Justice”

Lutheran Metropolitan Ministry was founded in response to the urban unrest in various neighborhoods of Cleveland in 1969. Through a cooperative effort spearheaded by citizens

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and clergy alike, an organization made up of all Lutheran church bodies was created to

respond to this upheaval. Reverend Richard Sering was asked to lead this initiative and now

almost thirty-four years later under his guidance, LMM has grown into a multi-faceted

advocacy and justice organization, positively affecting more than 27,250 persons (as of

2001). 43

‘Our Mission: To promote shalom (peace, well-being) and justice (right relationships) through a Christian ministry of service and advocacy with those who are oppressed, forgotten and hurting.’44

The LMM receives its funding from varied sources including government and foundation grants, individual and church gifts and donations, donated goods and services and fundraising events. The majority of their efforts are directed at preserving the four ‘pillars’ which constitute their social advocacy agenda including Criminal Justice, Disability, Elders and At-Risk Youth programs. Criminal Justice is a community re-entry program for ex- offenders. It involves re-integrating these individuals back into the community, finding them gainful employment and enhancing their quality of life in tandem with the community.

Prevention and intervention services are also provided for those at high-risk for recidivism and others who are at risk for potential involvement in future incarcerations. The Disability pillar known as ‘LEAP’ (Linking Employment, Abilities and Potential) provides advocacy, training, outreach and independent living assistance to those with disabilities, empowering them with tools and opportunities for a better quality of life. The Long Term Care

Ombudsman represents the heart of the Elderly pillar, responding to “…complaints, problems and needs of long term care consumers and their families, and advocates for legislative responsiveness to the elderly.”45 The fourth pillar, Youth At-Risk provides several programs to support oppressed, displaced or forgotten children. An employment program is designed to assist in preparing for employment through training and education and offering

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job placement for those 16-21 years of age. The Youth Re-Entry program, also offered to those from 16-21 years of age focuses on “the transition to independent living through semi- independent supervised apartment living, counseling, life skills training and support for employment and/or continued education…for those in the custody of the Department of

Children and Family Services and youth who are on parole with the Department of Youth

Services…” 46. The Westhaven Youth Shelter has been established for runaway children and an After-School Prevention Resources program was started to provide teens with a supportive place to congregate as an alternative to drugs and alcohol during the after school hours. Alongside these major directives, LMM collaborates with other organizations to promote initiatives and programs for the community including providing support and coordination services to the Cleveland Infant Mortality Reduction Initiative, sponsoring and providing administrative services to the Citizens of Cuyahoga County Ombudsman Office and advocacy services for the Racial Fairness Report Project.47

My visit and conversation with Dan Elliott, held on 01/09/0348

I entered the building on West 25th Street and was greeted by smiling faces and a bustling yet welcoming staff. Dan Elliott came down the crowded, narrow staircase to greet me and brought me upstairs to his office somewhere in the back area of the building. It was filled with papers, files and books and was overflowing with what appeared to be lots of agenda items in the works. As we talked, there was a flurry of activity taking place around us including phones ringing and staff members coming and going and people very obviously, working diligently on getting things done. Lutheran Metropolitan Ministry appears to be a very tight operation with a specific focus.

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Dan Elliott is the Director of Advocacy at LMM and it appeared as if a twist of fate brought him to the organization.

“I had known Dick (Rev. Sering) off and on very casually in his capacities here or in some community issues for a quarter of a century. And he heard that I was wandering aimlessly on the streets and getting into trouble…he and I had lunch over at the corner, and he told me that he always wanted to have a Director of Advocacy for the core organization…each of the four pillars of the organization has its own advocacy element to it, but no one had coordinated it historically…so he said to me, “I have a great idea. Why don’t you come to work for us. I have no money to pay you, and you can work full-time.” I told him I’d think about it, having come out of fancy pants, Fortune 500 corporate environment…I thought about it for about half an hour, called him and said I’d do it.”

We spoke in depth about Dan’s background, experiences, the advocacy stance at LMM and their relationship to Community Shares. I asked him how and why he felt the need and had the desire to become involved with social advocacy work and his story captures it all. Dan is a Caucasian gentlemen who grew up in modest circumstances in the 1940’s/50’s in a suburb of Cleveland, Ohio and lived in a racially integrated neighborhood. Members of the African-

American community were part of his social circle and worked side by side with his father, a social worker. Dan went to law school and worked at a large law firm on Wall Street. He joined a reading club at a church in Harlem and was overwhelmed by the environment. The next three years he continued to practice law on Wall Street, yet “…got this urge to do something different and to deal with some of these social concerns…this was the civil rights era…this was the Vietnam War…”

Subsequent to his job on Wall Street he moved to Washington D.C. to work for a congressman from New York. He recalls that the ultimate defining moment for him was

“…in 1968, the Poor People’s March on Capitol Hill…and I was one of the people on

Capitol Hill that was going to organize the relationship between sympathetic elected officials and King and his people…we had a scheduled meeting with King and his deputies on

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Monday, and it was Friday…I got on the subway, went home and my wife was standing there…she looked at me when I walked in the door and told me that King was killed…” He ultimately convened the meeting with King’s deputies including Jesse Jackson, Andrew

Young and Ralph Abernathy, yet shortly thereafter got fired from his job in D.C. because he was considered too radical a player for the current political climate. While Dan was cleaning out his office, a partner from a Cleveland law firm happened to wander into Dan’s office,

“…so Dick Pogue from Jones Day walks in, reminded me that they offered me a job in law school in 1964 which I turned down in Cleveland…and then proceeded to tell me that they keep track of people like me, and offered me a job to move to Cleveland.” He took the job and moved back to Cleveland six months later in 1969.

Dan became a member of various racial justice organizations, founded the Cleveland

Tenants Organization and chaired the federal court monitoring commission that oversaw the desegregation of Cleveland public schools. “Despite what I did for a living, I have always had a fairly strong set of left-of-center politics which drove most of my colleagues in private industry insane from time to time including serving on many non-profit boards, some of which were rather controversial in what they did.” He left the law firm and went into corporate America to work for White Consolidated as General Counsel, where his role included global industry and finance, as well, “…a full-scale plate of acquisitions and divestitures of companies and dealing with regulatory elements of the U.S. government.”

Dan feels these experiences were extremely beneficial to the kind of work he is doing now at

LMM. He knows his way around Washington and Columbus, knows how to get into the federal government and how to contact his elected officials. In his present role, he is doing

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similar work yet knocking on different doors and with a different purpose as part of his advocacy endeavors.

Dan enjoys the complexity of issues yet he still faces challenges. He feels a sense of dissatisfaction that the world has not made much progress in putting an end to abuse, inequality and wrongfulness. He does, however, admire those that have a vision and are able to commit themselves at whatever lengths to pursue an image in spite of everyday realities.

“There’s a lot of smart people out there, but you know, intelligence in a vacuum needs also the capacity to strategize and the capacity to prioritize…and then you add yet another qualification to this analysis and that is people with a social justice concern.” He describes

Reverend Richard Sering in this capacity, a man that has been the incubator of many social advocacy organizations in the Cleveland area and through his visions and ideas, have enabled

LMM to reach a different plateau. Some ideas have become creatures of statute (such as the

Long Term Care Ombudsmen, an organically grown idea now existing in every county and in every major city) which may even turn into something greater. Dan describes Reverend

Sering as “…an absolute wild man, he’s just wild! He’s always thinking of things that we need, and when he thinks of them, he will staff them with somebody to do it and worry about where the money is going to come from later…it’s also about how you finance the mission of a nonprofit- Dick’s a real genius at it.”

In the early 1990’s, Community Shares workplace sites included the government, universities, and government school systems including municipalities and libraries. There were a few small law firms and a few accounting firms, but no corporations. “!n 1991, we became the first corporation, White Consolidated, in the panoply of the expansions of the

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workplace giving of Shares.” It was through Dan and an extension of this relationship that brought LMM and Shares together. Lutheran Metropolitan Ministry is a workplace organization for Shares and Dan is a Past-President and current Board Member. I asked him if he had a particular hope or image in becoming part of the Shares community. His response was very open and vivid:

“…I’ve never been able to control my capacity to say no or my instinct to say yes…I just have this sense that things have to be done, and there are too few of us who are truly committed to the issues…therefore you can’t say no because there’s an awful lot of issues. I can say in all honesty, that of the thirty-four Shares organizations, some of which bear no resemblance to the next one in terms of what their task is…some of the organizations are into housing, some are in adult literacy, others in community development or battered women organizations…everyone’s got an issue…and for LMM there’s four, and all combined, they all have merit…what I learned when I came here to LMM, which I’m sure probably goes for each one of the Shares’ agencies, is there are people like me; I have a belief and commitment that is very profound, and I could really argue about it with people who disagreed and with a passion…I spent a lot of time at it…I think LMM reflect a lot of what Shares does for those who are oppressed, forgotten, and hurting. And you advocate for these people…and these are the poorest of the poor, the people with the worst problems in our society, and I think there is an interesting overlap of the mission of LMM and the mission of Shares collectively.”

As Dan points out, GCCS is redefining how alternative giving works and believes it is changing the way nonprofits approach problems nationwide. Shares agencies around the country give two thousand dollars on the average to each member agency; in Cleveland, the

Shares group gives approximately nine thousand dollars to each plus individual donations. It is now the second largest social justice giving campaign in the nation behind Colorado

Community Shares. In its own evolution, Shares began as an organization contributing

$2500 to primarily fair housing groups. Seventeen years later, Shares has received approximately $900,000 in workplace revenues and there is a much broader list of social concerns incorporated into the Shares network by its member agencies. For the future, Dan believes the majority of Shares around the country will be self-sufficient and end its reliance on outside foundation grants and funding.

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1 Conversation with Thomas Hawn, 01/08/03 2 Conversation with Chip Bromley, 01/10/03 3 Conversation with Lana Cowell, 01/10/03 4 Conversation with Chip Bromley, 01/10/03 5 Adopted from Community Shares document entitled ‘Who We Are’, 2001 6 Conversation with Lana Cowell, 01/10/03 7 Adopted from the Community Shares web page, http://communityshares.org/about.shtml and Community Shares document entitled ‘Who We Are’, 2001 8 Conversation with Lana Cowell, 01/10/03 9 Conversation with Chip Bromley, 01/10/03 10 Conversation with Rick Bastion, 01/08/03 11 Conversation with Chip Bromley, 01/10/03 12 Conversation with Chip Bromley, 01/10/03 13 Conversation with Chip Bromley, 01/10/03 14 Conversation with Lana Cowell, 01/10/03 15 Conversation with Lana Cowell, 01/10/03 16 Conversation with Rick Bastion, 01/08/03 17 Conversation with Lana Cowell, 01/10/03 18 Conversation with Thomas Hawn, 01/08/03 19 Conversation with Chip Bromley, 01/10/03 20 Conversation with Thomas Hawn, 01/08/03 21 Conversation with Chip Bromley, 01/10/03 22 Conversation with Thomas Hawn, 01/08/03 23 Conversation with Thomas Hawn, 01/08/03 24 Conversation with Rick Bastion, 01/08/03 25 Conversation with Thomas Hawn, 01/08/03 26 Conversation with Thomas Hawn, 01/08/03 27 Conversation with Rick Bastion, 01/08/03 28 Conversation with Thomas Hawn, 01/08/03 29 Conversation with Lana Cowell, 01/10/03 30 Conversation with Thomas Hawn, 01/08/03 31 Conversation with Lana Cowell, 01/10/03 32 Conversation with Chip Bromley, 01/10/03 33 Conversation with Lana Cowell, 01/10/03 34 Conversation with James Levin, 01/09/03 35 Conversation with James Levin, 01/09/03 36 All remarks in quotation are verbatim comments made by James Levin, 01/09/03, unless otherwise noted 37 Cleveland Public Theater 2001-2002 Season Brochure 38 Adopted from the CPT 2001-2002 Season Program 39 Adopted from the CPT 2001-2002 Season Brochure 40 Environmental Health Watch web page, http://www.ehw.org/EHW/EHW_Mission_Core.htm 41 Adopted from the EHW web page, http://www.ehw.org/EHW/EHW_History1.htm 42 All remarks in quotation are verbatim comments made by Stu Greenberg, 01/10/03, unless otherwise noted 43 Adopted from Lutheran Metropolitan Ministry 2001 Annual Report, introduction 44 LMM 2001 Annual Report, introduction 45 LMM 2001 Annual Report, pg. 4 46 LMM 2001 Annual Report, pg. 6 47 Adopted from the LMM 2001 Annual Report, pg. 9 48 All remarks in quotation are verbatim comments made by Dan Elliott, 01/09/03, unless otherwise noted

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Narrative 4: Triangle Residential Options for Substance Abusers

My Introduction to TROSA The Organization

The Beginning Kevin McDonald

Development The Residents Graduate Staff Members

The TROSA System - Life at TROSA - Preparation for Graduation and Aftercare - Life After TROSA

TROSA Business Enterprises - TROSA Moving - Property Division - In-Kind Division - Warehouse and Inventory Management Department - Automotive - Transportation - Food Preparation/Catering - Holiday Sales

The Community

Transformation Partnering

Organizational Challenges Financial Perspective - Infrastructure - Leadership

The Future

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Pragmatic Vision

My introduction to TROSA

My first introduction to TROSA was speaking with Kevin McDonald on the telephone. He was extremely warm, open, excited and enthusiastic about the TROSA organization and our conversation lasted almost one hour. Immediately I was swept up into the realities and life at the organization. It was as if Kevin had known me a lifetime; he opened up his heart and soul to me without skipping a beat. He talked about the inception of TROSA, financial issues, structure, organizational growth and challenges and his own personal history. What I learned in this initial conversation could very well sum up the nature of the organization in terms of its values, dynamics, culture and hopes for the future. Very openly and without hesitation, Kevin requested I visit with TROSA and went beyond the call of duty by extending an invitation for me to stay at their women’s residence housing complex during my visit. I was honored, accepted his offer and arrived in Durham, North Carolina ten days later. Keith, a staff member and Sarah, a resident at TROSA greeted me at the airport and brought me to the main campus. Over the course of the next three days I had the pleasure of learning and exploring a very vibrant and energetic organization-one that has as its focus,

‘Doing the right thing.’

The Organization

Triangle Residential Options for Substance Abusers (TROSA) is a non-profit two year residential therapeutic community located in Durham, North Carolina.

“…It is focused on helping recovering drug and alcohol abusers change their lives, with the goal of producing self-reliant, upstanding citizens. Men and women living at TROSA receive food, clothing, housing, therapy and all living essentials at no cost to them. In exchange, they must stay off drugs and alcohol and train in one of the businesses operated by TROSA. From these businesses, TROSA is nearly self-supporting from a financial perspective. TROSA assists residents in changing their attitudes and their addictive

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behaviors, promoting personal development through a variety of programs run by the staff and residents. It is a highly structured, disciplined and organized operation run by staff, a majority whom are graduates of the program and current residents. The 2 year rehabilitation program uses the principles of self-help and individual empowerment as the methods of recovery. Residents learn life skills and work skills that will enable them to find a job once they graduate. Key elements of the program include vocational training, education, communication, peer counseling/mentoring, leadership training and aftercare services provided after graduation.”1

At any given time, there are over 300 residents at the program including roughly 80% men, yet the number of women attending the program has grown in the past few years. The majority of residents are between 30 and 50 years of age and the population is comprised of varied ethnic, religious, educational and economic backgrounds. 65% of the resident population drop out of the program before the two year completion date; 70% of the residents are African American, approximately 25% have not yet completed high school or its equivalency and 90% of the residents have a criminal record. Those who arrive at

TROSA are primarily there to combat their battle with addiction or as an alternative to incarceration. “ Through the therapeutic process, barriers break down and residents look to one another for support regardless of their backgrounds…over 85% have a long-term addiction to crack, cocaine or heroin…about 50% have been abusing drugs for more than 15 years…about 50% are probated to TROSA as an alternative to incarceration… approximately 30% identify themselves as homeless when they arrived…about 90% have been to at least one other treatment program…over 70% of the residents are minorities.”2

There are approximately thirty-four staff members consisting of graduates from the program and ‘straight people’- those that did not come through the program and were hired from outside. The TROSA residential and administrative facilities are spread out in various locations around Durham and include warehouses, offices, residential housing complexes,

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vacant land and graduate homes. The Aftercare program assists graduates with housing, employment opportunities and continued counseling. TROSA operates more than a dozen business enterprises providing real life vocational experiences for their residents to acquire job skills, work habits and ethic in addition to generating revenues to help support the organization, as the ultimate goal is to become self-sustaining. “ The majority of the money that’s generated out of here just goes back into TROSA so we can keep accepting people free of charge and make it a better place for them to live in years to come.”3

The Board members of TROSA include physicians, academics, policy makers/regulators and a judge. In tandem with Kevin, they have been instrumental in the development of TROSA.

“They’ve given me complete power…they understand. First I had a banker on there, but he didn’t understand how we were going to make money because we didn’t have nothing. And like, so how do you explain it to somebody? So you fight fights within your organization and what was left to me-I had the big power. I mean using my board. They were very positive and reinforcing because they wanted this.”4

The Beginning

Kevin McDonald is the current and only President and Chief Executive Officer of TROSA.

Through his learnings, experiences, knowledge, relationships and practice, TROSA has become what it is today and heavily influences what it will continue to become tomorrow.

The story begins with Kevin and continues through Kevin from the origins of pre-TROSA to its future conception.

Kevin McDonald

Many describe Kevin as a man of conviction and determination. He has a strong

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perseverance toward commitment and is a very warm and compassionate person. When he

speaks, he has an air of mischievous innocence yet somehow, he always appears to be on top

of everything. “ It took me 20 years and therapy to learn how to be open and I always want

to make a better person out of myself.”5 Kevin is a soft and gentle person yet he is definitely

controlling, very tough and street savvy. He is also very demanding, unrelenting and

extremely intuitive. “ Kevin does everything from the gut”6 according to Barbara who

recently did an ethnography study on TROSA. He has a lot of energy, drive and passion in

his tone and demeanor. According to Kevin, Mimi Silbert, co-founder of Delancey Street in

San Francisco told him he was the most self-centered person she ever met. He believes he is

naïve yet astute in other ways. “I am what I am-I don’t know shit…I learned a lot from on

the job training and thought that’s how others would learn, but I was wrong. Others spend

their time writing policies, business plans, but who can concentrate that long? It’s all in

proving you can do it. I’m a dictator-in two years, I push the residents so hard they have to

make quick decisions and assume responsibility…they’re on a fast track at TROSA.”7

Kevin, an ex-felon and former drug addict supported his habit through criminal acts of

armed robbery in his youth. In 1979 he opted for change and as part of his probation chose

to attend Delancey Street, a two-year rehabilitation residency program in San Francisco.

Delancey Street was modeled after Synanon in California, the first Therapeutic Community

(TC) to ever exist. Synanon was a healing based institution that existed for many years and

was closed down circa 1969 because of its cult-like mentality (inter-marriages between its members, a closed compound to outsiders, etc.). John Maher was a resident at Synanon and went on to co-found Delancey Street in San Francisco, an extremely successful rehabilitation program to this day for substance abusers and former convicts. They now have satellite

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programs operating in other areas of the country including Los Angeles, New York, Sante Fe

and Greensboro, North Carolina. To date they have positively affected the lives of over

10,000 people.

Kevin McDonald ended up spending twelve years at Delancey Street, becoming part of its

fabric. He supervised many of the substance abusers and ex-convicts in the first few months

of their residency and managed a $1.2 million moving company business within the

organization. He learned the importance of helping others to care and survive, getting them

off the streets and pointing them towards a better life. “ I went from being a hard-core

asshole to being idealistic…the 12 years of training taught me not to quit. You have to get

them (the residents) to believe, first. And they need hope. We need to give them hope-life is about being accountable and you need to learn to balance what to do…people at this type of program are so self-destructive and they don’t have the possibility to balance anything in their lives…I learned to do it in a way that I could teach others the same.”8 In 1987 Kevin headed out to Greensboro to set up a satellite operation for Delancey Street. He was paid

$65/month and spent one year getting a thirty-bed facility up and running. In his second year he was transferred back to California. “ It was there I met my wife and realized I needed to mature. I got a job by accident and ran a former gang program in Central LA – it was my first job after Delancey Street…”9

A group of social justice individuals, criminal justice types and local volunteers in North

Carolina had visited the Delancey Street operation in Greensboro and wanted to create an

alternative long-term rehabilitation program for substance abusers in Durham. This group

did not have the experience to put a program together themselves and requested Kevin’s

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assistance. “ In ’91, they asked me to interview here but there was no money available to do

it, and I turned it down- they put ads in the paper asking for Delancey Street graduates…but

then they kept coming at me and scrounged up $18,000 for me to start the whole thing,

salary included…I was into it because I liked what I did and it was doing the right thing.”10

TROSA was conceived and created by a group of Board Members with an organizational

idea in place ready and waiting for implementation. Kevin and his wife moved to Durham

in 1994 to begin the process.

Kevin started TROSA with a small staff of three persons including himself and two of his

former Delancey Street friends. An old, run-down elementary school building and other

items were donated to the organization to begin the venture. “ When my wife and I moved

here, I taught her how to drive a forklift and moved one-hundred beds myself that were

donated from Duke because you gotta do what you gotta do.”11 The building had no electricity, no plumbing and the frozen pipes had burst creating a pool of water on the basement level. Kevin and his team put their efforts into reconstructing the building and renamed it T-North. “ We didn’t have a business plan- I just started setting things up…we didn’t have any rules in place for the residents, so we made them up as we went…”12 By

October, TROSA had begun their operations with a few in-house residents and a small food preparation business; within the first few years, there were up to 90 residents, three staff members and were growing as an organization by leaps and bounds.

Development

According to Kevin,“ … it’s about economics and survival. These two things go together.

You can be a good person but speaking it only isn’t going to change things-you don’t just wait for it, you need to take action.”13 And so he did. TROSA has become a community

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within a community in Durham, North Carolina. It is a mission-driven, visionary, pragmatic

and active organization that is intent on saving lives and building a future for those who

have lost faith. From the residents through to the staff members, TROSA runs itself in an

effective and resourceful manner, capitalizing on opportunities when envisioned and

confronted. What began as an operation surviving on grant funding has transformed into a

profitable, non-profit entity which has at its core, a commitment to serving and developing

the underserved in society.

The Residents

“ The residents need to believe. They’re desperate. They feel grateful to be here after all the wrong they did in the world. Here, you need to learn how to care and residents feel it’s their last shot. We’re recycling people and treating a chronic problem of substance abusers by showing them how to fight the enemy in themselves.”14 The residents and graduate staff members in the program contribute greatly to the purposeful meaning and success of

TROSA. They are integral to the development and maintenance of the support system internally in addition to the organization’s capacities for growth and expansion in the future.

According to Jonathan, a new resident at the program, “…one person’s support is another’s therapy.”15 As mentioned, the residents come from varied backgrounds and each have their own unique life stories. To share a few (each story has been summarized and names have been changed to protect the identity of each individual):

Sarah

Sarah was the head female intern leader and office manager. She has been at TROSA for almost twenty months as a resident, graduated from Princeton University and did not drink excessively until her junior year in college. She reflects honestly and openly about her life, which left me a sense of her feeling hope and conviction for enacting change in the future:

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“I lost focus in school, and went to Mexico to be in a soap opera…6 months later I moved to New York City to work at Time Magazine…I tried heroin and cocaine and became addicted…I quit my job, lost my apartment and ran out of money…I left my boyfriend and moved in with my drug dealer…I wanted help, so I went to a one-week detox place, moved back home and started on drugs again…I kept going into a cycle moving from place to place, hoping that would change things…In rehab, you spend a lot of time talking about your addiction but at TROSA, its different…you can only do that so much. Here it’s about relearning how to be honest…honesty and accountability becomes so meaningful here…its about so much more-at the end, it’s about you and this place makes you feel better about yourself…self-esteem is important here…I want to feel clean inside and its not about getting into trouble…and the key is to really be in a place where you’re actually living like you would in the real world. I have my job from nine to five…just learning how to do your everyday things, like eating right, doing my laundry, taking a shower every morning…it’s those little things that you lose when you’re doing drugs and drinking all the time…that’s what’s really helping me…it’s about being responsible and taking accountability for your life again.”16

Candy and Ellen

Candy has been at TROSA for almost 9 months as a resident. She was very eager to share her story with me, was very open and proud of her transformation. “My family already sees a difference in me…everything has fallen into place with me and my family, because the one lesson I’ve learned here is that it’s all about honesty and accountability...there’s no getting away with anything, because your peers are always evaluating you and this relationship creates bonds and trust. We’re all a piece of each others’ puzzle.”17

Ellen is new to the program and still appears to be finding her own niche. She is very timid yet she appears to be resilient. She expressed a great deal of sadness in her life, particularly when it came to affecting her family. She is originally from Philadelphia and moved to

Greensboro in high school. Because of peer pressure, she felt like she needed to become part of the larger picture. “ I began doing acid and shrooms…I was drinking and drugging until last year…I tried doing the geographical change thing between Philly and Greensboro thinking that would cure everything, but after I began doing crack, it went downhill. I found a program and attended it for 8 months called ‘First Incorporated’- I got kicked out…I

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lasted 3 weeks until I relapsed…I kept going in and out of different programs but none

seemed to work…At the end of 30 days at First Inc., I had a stack of 30 letters from my

father who wrote me everyday hoping that I would change. Now I want to go clean…my

father had it with me-he’s angry and frustrated…when he dropped me off at TROSA he

didn’t even hug me…after 30 days of being here, I didn’t have one letter waiting for me…I

hit bottom, and now I’m trying to build self-esteem because I don’t have a backbone left.”18

Graduate Staff Members

Buddy Dove

Buddy started using drugs, his wife left him and he began hanging out with doctors, lawyers

and other financially successful people. They were snorting cocaine, smoked crack and

introduced Buddy to a new way of living. He was a mechanic by trade and was good at it. “

I made a lot of money when I was working…I was good at it and I knew what I was

doing…then I got so bad, and I just got sick and tired of being sick and tired and I called my

sister to pick me up. She knew of a program, and I stayed with her for a few days. Then I

packed my clothes and came to TROSA.”19

When Buddy arrived at TROSA he thought he would last for only three-four months. But

after six months, leaving the program never became an option. “Kevin liked me and he

liked the work that I did, and I moved up in the program real quick. They made me intern

leader and then a team leader about five months in the program, and I’ve been a team leader

ever since. And then when I got twenty-four months, I would stay and the program saved

my life because I don’t think if I wouldn’t have came to this program, I would never made it

in the streets because I wasn’t one of the hard guys. I was easy going.”20 Buddy now lives in graduate staff housing with two other former graduates of the program. Because he is a staff

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member, he does not pay rent and is given a car. He runs the automotive division which began its operations with four persons in a garage with a leaky roof. Buddy went to trade school to become licensed and now does inspection work for the TROSA fleet of vehicles.

As TROSA grew, cars, lifts, tire balancers and other specialty tools were donated. They now have over 150 cars and fix their own moving trucks and tractor-trailers and now boast a staff of nine people.

As for his future, he plans on staying at TROSA because he values the people and the ethic.

“ It’s the people, and Kevin McDonald because he loves me just as much as I love him.

And he’ll tear me all to pieces sometimes but I like when he do that because that picks my awareness up and I can do a better job. He don’t hold back and that makes me strong and it makes me a better man-that’s what I love about him. I also wasn’t ready to leave the program because I don’t think I would have made it, which is one reason why I stayed, too…I love this place and I love what the program is doing for the people-I got a passion for saving people’s lives.”21

Randy Garcia

Randy is currently a graduate staff member at TROSA working in the ‘people business’ part of the organization. He is a very soft-spoken, kind and gentle human being. I felt a certain calmness about his personality and there was an air of remorse when he reflected back on his personal story. Randy was a heroin addict/trafficker who came from a drug addictive family in New Mexico. He has been on probation since the age of twelve; he is forty-six now. He was in and out of the penitentiary and talked very openly about his childhood. He was molested at the age of six and in turn molested his own brother when he was eight years old.

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He spoke with sadness and grief when he shared his thoughts with respect to feeling worse

about being a victimizer than he did about being a victim. Randy also got into a gang in

prison and was part of a gang riot that killed forty people. He was sent to a maximum

security cell for thirteen months and recalled his fear about going back into the outside

world. He came to TROSA because he was given an option of two-hundred months in

prison or two years at TROSA. He figured coming to TROSA would be the easy way out

and he wanted to complete his sentence in a shorter amount of time. After graduating from

TROSA, he learned the importance of contributing to people’s lives and having the ability to

impact another person’s future. He has no desire to leave TROSA as it has become his way

of life and his home. He lives in constant fear of going back to New Mexico because he

withdrew from his former gang members who still retain a bounty on his head. “ Between

structure and time, there is never a complete peace.”22

Kevin describes Randy to be very diligent and courageous, “…and it’s hard to teach and train that.”23 He is considered by many at TROSA to be a mentor and caretaker in changing people’s lives. Randy shares the passion of helping others through and with others and is successful at doing so at TROSA. “ We’re like mountain climbers…we’re all attached by ropes lifting each other to the next level…it takes pure sheer determination to make the kind of difference we try to make…and Randy has what it takes.”24

Michael Keene

Michael was a former Delancey Street (Greensboro) graduate and his story is quite vast. He

had over forty felonies on his record over the years and became a heroin addict in 1971. He

was indicted for many illegal acts including prescription forgery, shoplifting, possession of

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stolen goods, larceny and drugs. “ I basically stayed strung out for about 20 years and received four different prison sentences between ’82 and ’91…I’ve been to six other drug and alcohol programs and when I got out, I went through a revolving door in and out of prison…and I used to traffic heroin out of Mexico.”25 He was given a choice to attend

Delancey Street in lieu of incarceration and decided to do so. “ When I got out of prison, I was given 72 hours to report to Delancey Street…it took me six weeks to get there and I was strung out to the hilt again…that’s when everything started changing in my life. I had never gone to a program that I didn’t start shooting dope, that I didn’t start corrupting other people around me. I always had connections…the only reason I was there was to stay out of prison because I was tired of going back…I ended up at Delancey Street for 6 ½ years and have stayed straight since. They saved my life.”26

Michael worked for the moving division at Delancey Street and contacted Kevin to discuss job opportunities at TROSA. The groundwork was laid for the creation of a moving company and it was just get started. In 1997, Michael joined TROSA to run TROSA

Moving and has taken it to what it is today. “And where else could I have been with forty felonies on my record and have the opportunity to run a $3-5 million business and have somebody like Kevin that actually shows me certain things and basically molds me into doing that in one way or another?”27

Jesse Battle

Jesse started selling dope at the age of thirteen and committed various acts of larceny to support his habit. He grew up in the projects in Texas and moved to North Carolina at the age of fourteen. He quit high school and was in prison within one year. He repeatedly went

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in and out of prison and eventually got placed in solitary confinement for a thirteen month

period for participating in a prison riot; all he did during that time was read books including

novels and poetry. When he was released, he committed a few crimes before even reaching

home. “ I was living on the dark side for awhile and really started on that dark side at the

age of ten. I made the decision that I wanted to live there in life…and prison? I’ve always

looked at it as a Persian cat going into a den of wolves…you take a Persian cat. You send

him into prison. He’s got to become a wolf to survive. And then you let him out to become

a Persian cat again. Never works. You know once he becomes a wolf, he comes out. He’s

going to become a wolf again. He doesn’t revert back to that Persian cat, because when you

go back in, you’ve got to become that wolf again.”28

Jesse ended up selling dope to an undercover agent which was the “…best thing I ever did…it set loose things that brought me here and I’m glad it came with a plea bargain.”29

Jesse was probated to TROSA in 1995 and he believes he was given a second chance in life.

“ I wanted to get out of the criminal lifestyle long before I arrived at TROSA…I guess it stopped being fun anymore…I went from wanting to be Tony Montana or James Cagney to just being a Ward Cleaver. I wanted to be the guy next door who went to work every day, came home and had a normal life…I had my little girl, my daughter. And I really wanted to be her father not just her Dad, because Dads provide and fathers teach. I wasn’t teaching her how to survive so I was pretty much showing her a way to die.” He went through the two year program and learned how to live life without drugs. “ That’s what TROSA’s centered around…not focusing on the slide shows about the drugs but how to live in society without the drugs.”30 When he graduated from the program he received a scholarship from

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Glaxo-Wellcome to attend school full-time. When he was almost finished with school,

Kevin asked him to join TROSA as a staff member.

Jesse chose to remain at TROSA primarily to help people and save lives. “I’ve caused a lot

of pain…and I know I can’t repay the world, I can’t give them back what I’ve taken from

them but I figure I can spend the rest of my life trying to…I can atone that way there and

maybe if I can help save as many lives as possible, maybe then the gates will open up for me

one day.”31 Since 1997, Jesse has been the Director of Men’s and Women’s Programs and the Network Administrator. He oversees almost the entire organization and works very closely with the residents and staff members.

The TROSA System

Life at TROSA

The TROSA program is highly disciplined and structured, and many of the residents concur.

Some residents feel they need structure as it provides a platform from which to grow.

“…It’s about people believing in us because we need to believe in ourselves… everyday is a learning, it’s a tough process…there are so many rules and regulations…you make it what you want it to be…and some of us need structure in our lives because we’ve never had it...”32

For some, TROSA is a luxury compared to living on the streets. For others, “…everyday is

a struggle.”33 Each day begins around 6:00am and continues up through 11:00pm for some, seven days per week. The responsibilities of each resident and staff member are varied yet collectively, the system appears to work effortlessly. There is a very specific hierarchical designation of its members, reflecting the mentoring and training processes very much alive at TROSA. Proper channels have been established which is diffused throughout the system

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and the concept of authority and structure is instilled into its ethos. At the onset, a new resident member is called an Intern during the first thirty days of the program and Intern

Leaders are put into a position of authority to learn leadership qualities to guide them through the first month’s process. Residents look to a Team Leader for guidance, support and problem-solving. Staff-in-Training identifies a graduate who is in training for a staff position which can take years. The Directors of Men and Women (Jesse and Shelley, respectively) are staff members who supervise the residents. Honesty and accountability are

TROSA’s highest virtues and rules are unwritten and learned verbally or adopted through trial and error. Three irrefutable rules include no violence, threats of violence and no drugs or alcohol. ‘Each One Teach One’ is the mantra at TROSA and captures the culture of the organization. It is suggestive of the philosophy that each person within the system is taught and trained, helped, supported and developed by others within the system and it remains a continuous cycle.

Preparation for Graduation and Aftercare

I met with Lisa Seago, the Aftercare Therapist/Coordinator. She is a ‘straight’ person hired from outside the organization and not a graduate of the TROSA program. Only 10% of the staff is hired from the outside yet this number is growing. Lisa is the only ‘straight’ staff member working in the ‘people’ business, i.e. with the residents as opposed to administrative and business functions. She worked at Duke University as a counselor and came across

TROSA by responding to an ad in the paper and has been with TROSA for almost two years. “I’m a natural misfit…I never really belonged anywhere and feel the work I do here is never boring.”34 She is a trained counselor with a Masters degree and has various supporting roles. She is responsible for Aftercare responsibilities including mentoring, leadership

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training, peer counseling and ‘Work-out’, a job readiness program to help prepare residents

for their employment search either within TROSA or elsewhere. It constitutes a structured

agenda; residents are taught job and interviewing skills, resume writing and financial

planning. “ I basically offer support and energy when people are going through work-

out…I’m teaching people it’s the real world….I’ll restructure the residents especially when

they get more flexible (slacking off, not paying attention, skirting their responsibilities) because they

often forget the real reasons they came here. I do a lot of pulling and pushing and teach

discipline yet with a lot of reinforcement…I also provide the motivation when someone gets

a job.”35

‘Once residents graduate, they can choose to remain connected to TROSA by living in

TROSA-owned subsidized housing. In this way, graduates can save money and re-enter the

community in a supportive environment. Graduates are encouraged to attend bi-monthly

support groups that help make their transition successful and support their continued

recovery.’36 Lisa works with the graduates in conducting support group sessions and assists with transitional graduate housing responsibilities. After eighteen months, residents are allowed to attend support group meetings. “ I put out fires, oversee house meetings and teach about managing finances…if a graduate loses a job, I help them get back on their feet.”37 Jesse Battle assists Lisa with her responsibilities. He comes from the ‘inside’ and can

often use his experiences to help Lisa direct the future course for many of the residents.

Psychiatric care is also a subset of the TROSA program, a component added by Kevin to the

infrastructure not found at Delancey Street. Lisa in cooperation with professional staff at

Duke University assists with members of the TROSA community needing support. She

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works on anger and emotional issues mainly with the women, many whom have experienced rape and child molestation. There is plenty of support for the men given by the Team

Leaders. “I always have to be hopeful and positive…there’s no bullshit here.”38 Many of the residents have psychological problems and rely on each other as TROSA has become their culture, society, life and family.

Life After TROSA

Jesse Battle shares his thoughts about the opportunities borne out of TROSA. His metaphor of a ‘Chance Card’ in the game of Monopoly captures it all.

“…everybody is getting taught different things—automotive, the computers, everything for individuals who want to find their way out… when you come into this program you’re given a Chance Card and everybody’s Chance Card reads differently…my Chance Card read ‘education’... so I went to school and I got educated on those computers…another graduate’s Chance Card may have read ‘Class A CDL’ so they got their Class A CDL license. And others may say ‘Class B’ so they’re driving buses around town…somebody else’s may have said ‘electrical’ so he’s a journeyman electrician now.

…I don’t know what people’s Chance Card says but I do know it tells them how to get out of their game…so I tell all the residents, “Read your card” and keep your card in your pocket…and you read your card very often because your card will tell you how to get out of the game and it keeps your vision focused where it needs to be… And that’s what TROSA does. It gives people those Chance Cards. If it’s ‘automotive’ man, you learn how to work on diesel trucks. You learn how to work on a variety of cars. You know after a year’s time in the program you can go to a school. You go out to Durham Tech to further your knowledge or get a certification that they got there. And you’re going to run in a whole different status of society now… and that what makes TROSA the way TROSA is. It makes it such a different place because it gives people those opportunities to actually move on and that’s the big thing. I mean just with the Aftercare Program, it gives them a chance to move on…TROSA’s very, very unique in that sense.

To me, it’s been such a unique place because it’s a nonprofit, you know, but it doesn’t act like a nonprofit. You know what I’m saying? You know it’s unique as a nonprofit and it’s unique as a business…the nonprofit is unique in a way because it’s generating it’s own income. You know what I’m saying? It’s not looking for other things. It generates its own income. It wants to be self-supporting. That makes it very unique as a nonprofit. As a business—what makes it unique as a business is that it’s sole motivation is to close…that

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one day they’ll be no drug addicts. They’ll be no alcoholics…and most business don’t do that.”39

TROSA Business Enterprises

TROSA has created a system internally providing its residents with the tools to re-enter

society feeling whole. They are given opportunities for educational development. In

conjunction with local volunteers and educational organizations, residents attend GED

courses, computer skills classes and after one year in the program are permitted to take

courses at Durham Technical Community College. After twenty-one months, residents are

able to enroll in TROSA’s Scholarship Program. Participants in the Scholars Program have

their academic expenses covered by TROSA (in addition to room and board) while attending

classes at a local college or vocational school of their choice; in exchange they work for

TROSA in some capacity around their class schedule. ‘ TROSA believes that education

combined with other key elements of the program play an important role by providing

immeasurable benefits to recovering substance abusers in their quest to develop positive

self-esteem and prepare for life after the program.’40

TROSA has several business/training schools that offer job skill development for empowering the residents in preparing for life after TROSA. Each resident has job responsibilities either for the care and maintenance of the TROSA facilities and residents or working at one of the TROSA business/vocational training schools, including participating in all phases of the organizational structure from laborer to supervisor or crew boss and training to finances and business development. The residents are not paid salaries but receive free room, board and health care in return. The in-house business/schools are designed for vocational training purposes and operate to service the staff and residents.

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They include the automotive department for repairing and maintaining the TROSA vehicle

fleet, the construction and facilities maintenance department for renovating, rebuilding and

maintaining TROSA properties, the food preparation department for banquets and meals for

the residents, the security department for visitor check-in and watching over the residents

and facilities and the transportation department for scheduling vehicles to transport people

to and from their jobs and other various program activities.41 Some of the business/vocational training schools generate income to help support the organization including the moving company (the largest operation), masonry, catering, lawn care, painting, framing, and contract labor work. TROSA has an annual operating budget of over $6 million (90% is generated through its own enterprises including In-Kind Donations) and revenues of approximately $3.5 million, a dramatic change since their inception in 1994 when TROSA began with an annual budget of $18,000 initiated through sources of grant funding. I visited with several of these divisions, each of which are unique in their own right.

TROSA Moving

The TROSA Moving Company is a revenue generating division responsible for conducting interstate and intrastate residential and commercial moves; it is considered to be the bread and butter of the organization. Their annual revenues are over $2 million with an estimated annual budget of $3 million in 2003. They average 5000 moves per year and rank as the 6th

largest moving company in a highly competitive area of North Carolina and maintain a very

sophisticated, organized and elaborate system. The contract labor division of TROSA falls

under the moving department. TROSA provides temporary labor to several large and small

organizations in the Durham area including STORR Office environments, the North

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Carolina State Fair and A Southern Season. This division brings in approximately $1 million

dollars in revenue per annum. Kevin McDonald becomes very visionary in this area with his

pool of residential talent; when he sees an opportunity to make money, he jumps on it. “If

a resident comes in who can lay bricks-he laid bricks…first thing Kevin does is he puts a

little sign up here on the board. Who wants to learn how to lay bricks? They start a brick

masonry class. That resident teaches them how to lay bricks. Next thing you know he’s got

about ten guys that can really lay bricks with him…uh oh, Kevin’s starting a business.”42

When insurance jumped from $180,000 to $510,000 in a three week period, TROSA was almost shut down because they did not have the funding to pay for the increase.

Serendipitously, TROSA received a phone call from A Southern Season offering a three- month contract to make gift baskets worth $330,000. “ It was a major deal. If we hadn’t gotten this one contract, Kevin says we would have folded…it was kind of scary because we needed to come up with $300,000 quickly.”43 TROSA Moving recently relocated to a newly converted warehouse (a former recycling center) because they outgrew their space at the main offices. The building was purchased for $300,000 from IBM at a time when they were downsizing. “ I was looking for a warehouse and wanted a good deal. It’s survival, like the streets. Better think ahead or you’re dead.”44 Michael Keene manages this operation.

Property Division (New Buildings, Renovation and Construction)

The property division began formerly in 1997. The construction arm acts as a vocational training school responsible for maintaining the residential and administrative facilities and renovating buildings for transitional housing for graduates of the program. Twenty-eight properties have been renovated to date including a 10,000 square foot school building, two eight-unit apartment buildings and numerous single and multi-family residences. The

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painting, masonry, labor and landscape areas within the property division are revenue

generating entities. For TROSA, they provide the plumbing, electrical and building

resources and labor to the construction arm to build the graduate homes. Externally they

seek contract labor work for revenue generation. According to Tony, a resident who works

in the construction office and helps manage the property division, “…we don’t make money

here but we spend the money that the moving company makes…lots of materials are

donated and the labor is internal…lots of residents have skills before they get here-they had

to buy their drugs someway. Those that didn’t have any trade skills had to mug and steal for

their drugs-them we teach the skills, such as electrical and all labor related activities…at the

end of the day, there’s nothing TROSA can’t do.”45 Future plans involve bringing all of the residents together to reside in one location. At present, they are housed in two separate areas, the Piat building for women and T-North for men. By Fall 2006, the property division expects their 3-phase campus plan to be completed which includes housing for over

275 residents, a movie theater and various multi-purpose rooms for ultimate living.

In-Kind Division

This area represents a full blown operation that provides the fundamentals for the organization. Persons in the office spend their entire day calling on corporations, small businesses and individuals to donate items such as furniture, clothing, cars, food and toiletries to support the residents in the program. Presently, TROSA receives over $3 million dollars worth of product donations per year.

Warehouse and Inventory Management Department

All goods necessary for TROSA’s operation including in-kind donations are stored in an

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incredibly massive warehouse called the T-East building. Clothing is stocked on a floor with

separate areas for men and women including separate rooms for shoes(of which there are

over 7000 pairs for women alone), trousers, blouses, belts and undergarments. Each piece

of clothing is organized by the size and type (summer wear, sweaters, suits, etc.) There are

huge rooms to store toiletries including soaps, shampoos, toothpaste and shaving

accessories. An entire room is devoted to electronic equipment such as computers, stereos,

television sets, microwave ovens and VCR recorders. Complete sections within the

warehouse are used to stockpile donated furniture items including lamps, couches,

mattresses, desks, chairs and tables. These goods are all essential because TROSA

undertakes the responsibility to help furnish all of the graduate transitional housing units. It

is a highly structured and organized facility; women learn the trades of tailoring and sewing

and men learn inventory (which is done manually) and control, work scheduling and division

of labor. The warehouse is located in a seedy area so it does get broken into quite often.

However in response to that, cages are erected and alarm systems constructed to subvert as

much crime and theft as possible, “…and the break-ins ain’t stopping us-you need to accept

the consequences within the areas you choose to be.”46

Automotive

This division is for internal purposes to service the staff, residents and graduates. Cars are either donated to TROSA or bought at auctions. A garbage truck, fire truck, tractor trailers, vans and cars have been donated. At present they have over 150 vehicles for TROSA

Moving and transportation and have a staff dedicated to ensuring they are properly licensed and insured at all times. TROSA allows graduates to purchase donated cars for the price of parts used to repair the vehicle at their automotive shop. The repair work for all vehicles are

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done internally and the division is managed by Buddy Dove, a former graduate of the program.

Transportation

This department is responsible for handling the logistics involved in transporting over 300 residents to and from various worksites and program facilities on a daily basis. Internally they have a dispatch system to transport residents to worksites, inter- campus related activities and ‘home’ visits which afford the opportunity for residents to travel home for up to a sixteen-hour period after their first fourteen months in the program.

All residents in the program are required to have an escort (another resident in the program) with them during their first 21 months in the program. The transportation department also ensures that graduates without a driver’s license are transported to and from work.

Food Preparation/Catering

This division services both the staff, residents and graduates of the program in addition to catering events (weddings, conferences, etc.) outside of TROSA for generating profits. It currently averages almost $30,000 worth of business during its peak months in the summertime. The catering branch is housed in the new commercial kitchen recently renovated at the T-West Campus. Altogether on a daily basis, those that work in the food preparation/catering department make approximately 1000 meals per day for the residents, seven days per week. Meals are served in the main dining hall at T-North and everyone is expected to attend (unless they are working on a job). “On Sundays, we have to dress up for dinner. It’s our day off but we never have lazy days at TROSA. We can sleep in a little, and

Sunday brunch is made to order.”47 Because TROSA is growing, the catering division will be expanding.

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Holiday Sales

The Holiday Sales department is seasonal; it began when one-hundred Christmas trees were

donated to TROSA several years ago; TROSA turned around and started their first

Christmas tree lot on the campus. The next year they secured another lot at a shopping mall

and then another lot the following year. In 2002 they sold almost 4,000 trees and this year

they will be adding their third tree lot. “ Because the beginning of the year is our slow

months, we’d eventually like to make enough money off the Christmas sales that it can fuel

us for three months, or at least soften it a little bit.”48 TROSA also does door-to-door sales to hundreds of businesses across North Carolina selling potted pines, wreaths and a variety of other holiday retail items. This process helps spread the word about TROSA and generates revenues for the program; it has been and continues to be a very viable source of income.

The Community

“Gotta think ahead…how to train, do the right thing.”49 Kevin made the intuitive decision to not be perceived as a non-profit, but to take action into far reaching visions and make them happen in the present. He knew going into the venture that TROSA needed the support of its neighborhoods in order to partner successfully within the community. “We have to change the perceptions when starting from scratch. We need to change the neighborhood…the perception and judgment of us needs to be appreciated and not condemned…after all, most people are afraid of drug addicts.”50 While we were touring the

TROSA facilities, Kevin alluded to many intangible issues that seemed integral to their development. As he states quite mischievously with a hint of candor, “ I never graduated and I’m not smart…I never thought I’d amount to anything…I’ve never had confidence in myself, but I have confidence in knowing how to do TROSA…I run TROSA through

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knowledge, learning and experiences-I know what to do and that’s why I’m good at it!”51

Kevin explained to the importance of being consciously aware of the community and understanding issues such as zoning regulations and guidelines before venturing into a neighborhood. In Durham, political pressure is a very strong influence and the process of getting permits is very difficult; it is necessary to go through the local council for approval when building, rehabbing or developing. “ When we decided to start in Durham, other neighborhood associations called and vouched for TROSA-that’s why we came to this neighborhood.”52

There has been an active drug trade for many years in Durham; families and drug dealers live

side-by-side. Houses were always being condemned so TROSA decided to capitalize on the

opportunity and turn the neighborhood around. They purchased several houses in order to

renovate, rehab and house their graduates and staff members. In a duplex , 2-3 graduates

live in each unit and pay up to $350/month for all expenses including rent and utilities.

Residents restore the buildings by re-roofing them and doing the electrical, plumbing, dry

wall, painting and brickwork. “We take something that’s shot to shit and do something with

it”53 was Kevin’s response. In one particular area, TROSA purchased a few houses on the cheap and fixed them up. This unintentionally raised the property values in the surrounding area. When TROSA went to purchase its fourth house in the same neighborhood, property prices skyrocketed and the houses cost much more because of it.

“We began doing the electrical work and everything internally after we bought the first two buildings…I want to build nice houses for my people and I want to continue helping to build a better community…I bought the first two houses for $14,000 each and then bought the one across the street for $40k. This is what changes neighborhoods because no one would want to touch those houses…I just want pride for who we are and contribute to the neighborhood. We need to build goodwill here because we started with nothing…and we can contribute to developing the neighborhood and community…that’s what it’s about. We

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have to participate in the neighborhood…it’s about making you part of them rather than less than…”54

Transformation

At TROSA, there is a definite nexus between growing and having the resources to do so.

Since their inception, TROSA has had a tremendous amount of expansion both structurally and organizationally. Formerly operating their entire services from one building location

(including offices, residential housing and businesses), they purchased the obsolete

Lakewood Dairy Farm in 1996 and moved onto its campus. The land was purchased for

$90,000 and the buildings had no electricity; TROSA renovated this complex by rewiring, re- roofing and putting in new plumbing. Now called the T-West facility, it currently houses the main offices, automotive, construction and framework shop. The three-phase campus plan envisioned by the construction division incorporates enlarging the campus and creating modular housing for its residents. The ultimate goal is to relocate all of the businesses off- site and move a majority of the residential facilities onto the T-West campus area. To date,

TROSA owns and operates over twenty-five properties scattered across Durham including the Piatt Building, T-North residential facility, T-West Campus, T-East Warehouse and over forty-four units of transitional housing for senior residents and graduates.

From an organizational perspective, TROSA is outgrowing themselves. It ran itself with only three staff members and averaged approximately one-hundred residents for the first three years. At that time, TROSA relied heavily on the resources of its residents for preservation. “ In the last two years we’ve added 15-16 staff…we need to refine the infrastructure in order to keep up with the growth…two years ago we got a CFO…it’s a learning process for developing staff and it’s difficult when all the peoples are at different

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levels, which means we have to train at different levels which is difficult…also, we lose 60%

of the people every year and we have a 100% turnover rate every two years…it’s fine to be

idealistic but you’ve got to survive in this kind of transition.”55 Today there are more than

thirty staff members and over 300 residents; the challenges for growth arise from Kevin’s

vision, hopes, desires and determination. With this in mind, Kevin McDonald has formed

partnerships with people and associations in the community to help guide his future course

of direction. Strategically he has been able to mobilize academicians, community

organizations, corporations, philanthropists, policy makers and local town residents to work

together in helping to achieve his ultimate vision.

Partnering

‘TROSA’s ambitious future depends on continued support from the community and those

that share in TROSA’s mission.’56 Kevin is very proactive about building and participating in community development work. Informal classes in art and music are taught by TROSA residents and staff at the local community center. TROSA members are actively involved in volunteering their services to many community sponsored activities in the Durham area, as well, they have partnered with many organizations such as Durham Technical Community

College, Durham County Literacy Council and Duke University Medical Center. ‘These organizations provide TROSA residents with needed services and opportunities and at the same time TROSA enables these organizations to realize their goals and missions.’57

Kevin has been very pragmatic and clever in his approach to creating business opportunities.

He believes there is a method to the madness and is able to perceive a possibility and convert it into a reality. “It’s noble shit here…it takes basic common sense and then you do

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something about it.”58 For example, in lieu of getting paid for doing a speaking engagement,

Kevin requested that the Junior League (in this case) spread the word about the various

TROSA business enterprises for future contract work. “There’s a complexity involved…connecting the dots may take a year or two so throwing out TROSA gets the seeds planted.”59 He has always had a very good relationship with Duke University allowing students to conduct research at TROSA in hopes of mutual gains for the future. TROSA recently built an on-site medical center for treatment at their campus and Duke will volunteer their doctors and psychiatrists to provide medical and mental health assistance.

The University is also helping to organize a more formalized education and literacy program for the residents.

After the last major hurricane swept through North Carolina, Kevin volunteered the residents to go out into the community to help clean up debris, falling branches and wrecked homes in the neighborhoods. He noticed one resident in particular who was very efficient at swinging from tree to tree. “ He was just a tree man…he had a chain saw in his hand, swinging like Tarzan…he started teaching people and we now have a tree company to cut down trees and things of that nature.”60 Kevin proceeded to make a video, trained some residents in the art of lumbering and marketed his idea. He looked at a map and saw the track of the hurricane, started making phone calls and sent residents out to cut down trees.

He made money for about one year. “What’s so hard is to keep everything going, including relationships with outsiders…I used to have control over all of it…now what this facilitates is more planning. This is part of the change.”61

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Organizational Challenges

Financial Perspective

TROSA wants to continue growing in order to continue saving lives, however, financial

constraints can be delimiting; the need to access additional streams of funding are always at

the forefront. Kevin is continuously searching for alternative sources of funding yet at the

same time he does not depend on institutions for financial support. “ We don’t get

government money, not that I wouldn’t take it. I’d be glad to take it…I started this from the

ground up-lots of people are singing our praises but we still have lots of work to do…the

funding people are fucked up…trying to get grants takes time and takes away from getting

the job done… because we’re dope fiends, they (the county) think we’ve ripped ‘em off so they

think TROSA should do everything for free to pay ‘em back- the county gave $1.2 million to

the city to build a homeless shelter and gave us only $419,000 in the past 9 years…I guest

that’s life. Even the housing department is shitty-they’re supposed to give me money and

I’m still waiting for it…you’re peeing in the wind a lot. The county isn’t professional enough

to work with those who can get the job done… we’re in survival mode always…in order to

keep taking the next steps it costs money and we’re not going to shortcut it.”62 So Kevin decided to go elsewhere for financial assistance and recently took a loan from Wachovia bank in the amount of $2.2 million.

Advertising the TROSA businesses in hopes of increasing revenues has also remained a challenge, particularly during the slow months of the year from January-April. Kevin is very realistic in understanding the marketplace when taking into account certain limitations. “

Our thing is service-we’re polite and provide people with good quality service, but we’ve got to educate the peoples about us-do we need PR? Marketing? All we have is a brand…how

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do you change peoples minds about it (the businesses)? Do we advertise that we’re drug addicts or no? Do we advertise as a good moving company? Do we use the ‘drug addict’ because of peoples perceptions or not? Do we advertise that we’re doing good by using recovering addicts?”63 While they contemplate this issue, they continue to work hard in striving toward their vision of becoming a self-sustaining organization.

Infrastructure

TROSA is committed to changing lives yet it is not simple to keep up with the growth. They will always keep their doors open to substance abusers that come looking for support and the more graduates they get, the more houses they need which adds to their expansion. “We’re so big now that one person can’t run it on their own. Kevin wants it to keep going and someday other people are going to need to take over. Kevin wants TROSA to remain whole long after he’s gone.”64 The growth of the organization has necessitated transforming the infrastructure in order to keep up with its own evolution. “ Part of our problem is that we’re so big and we have so many businesses-moving, catering, city crew, construction, temp services, picture faming…it would be easier to get rid of 5-6 of our divisions, but I want people to learn different trade skills, so if I cut off one division, that’s one less trade the residents have an opportunity to learn…eventually we need to get outside teachers because of the internal turnover…how to balance internally and externally is the key. We’re learning different ways of doing shit. We’re integrating the straight peoples with the staff because we have to-because we’re growing so fast…it’s not easy, and I’m always balancing the right people, right jobs. I need to let things go and need to fill in the infrastructure…we now have 28-30 staff for a $6 million business and now it’s about learning and developing it.”65

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It is with great perseverance that TROSA has successfully been able to pool their intellectual, financial and strategic resources together in order to survive and grow. Individually nothing gets done and only through and with others does the businesses and therapeutic program run smoothly and efficiently. “You’ve got to balance people and business-it’s a double bottom line thing. It’s all about us-it’s a human thing and it’s about people…we work together because we have to hold a line about being accountable, fair and honest…it’s the real deal.”66 Becoming more organized has become increasingly important. Kevin is changing the entire management operations to infuse more structure into the system and is combining ‘straight’ people with resident graduates on staff at the suggestion of several outside consultants, academicians and health care organizations. “ We’re doing holistic shit…when you start interacting too much you become too mainstream and that maybe takes away from the noble shit-but maybe we have to start setting up a process-at least that’s what they tell me…they want me to do development and going to scale shit in order to get to $6 million.”67

By bringing in ‘straight’ people, different issues have come into play. “ It’s the staff who make the rules…when new staff is added, it takes the pressure off other staff…there’s a work order between the divisions which gives us some structure…we’re like one little family.”68 Kevin outwardly admits he is more familiar and used to the resident mentality and started out very skeptical of hiring ‘straight’ staff. He believes that residents own up to their accountability and are disciplined and he does not believe that is always the case for ‘straight’ people.

“ We empower our residents, and to be a survivor you’ve got to have skills and you have to know how to hustle…in a therapeutic community, you learn how to be very direct, and you learn that honesty, accountability and trust are everything… are the straight peoples going to subvert the work ethic? All the residents want is to please people but they’ve been so self-

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destructive, we need to get them to not be negative. The straight staff can be a pain in the ass-they lose their sense of the pecking order. I ain’t the easiest person to work for-I can be rigid and controlling, and people have to earn my trust…it isn’t always that way but I can see things ‘cause I know…the hardest part is for people to be honest with you.”69

Leadership

Many at the organization say that Kevin runs TROSA in a very off the cuff way, a

‘whatever/whenever’ management style. Kevin is TROSA and TROSA is Kevin. He is

filled with energy and driven by conviction; it is obvious his mind moves much faster than

even he can keep up with. He always appears to be many steps ahead of himself which

keeps him fresh, agile and constantly aware. “ The minute you think you’re going to catch

up with Kevin McDonald, there’s a list of stuff a mile long that you need to take care of.”70

We had many conversations about the future leadership of the organization. There is only one Kevin and as he readily admits, he cannot let go of the system but realizes he must do so in order to make room for others to grow and thrive long after he is gone. Kevin feels a deep sense of responsibility and accountability for nurturing, developing and continuing the legacy of TROSA and he struggles with how it will do so without his guidance and support.

“I need to survive because I have people I’m responsible for…I need to keep going and going- I just can’t quit, I’ve got too many people depending on me… if I didn’t have the experience and knew my stuff, I’m not sure I would have made it because I wouldn’t have pushed hard enough…if you keep pushing, it’s through a baptism of doing it-that’s what creates good leaders and managers.”71

It is clear that TROSA revolves around its people and with the continuous transformation of

the businesses combined with the residential turnover, it is difficult to teach and train people

for long-term gains and upward mobility. When residents come into the program they learn

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skills that are subsequently utilized for working at one of the TROSA businesses. After they

either leave the program or graduate, they may choose to stay at TROSA to remain on staff

or they may find employment elsewhere. “ I learned a lesson-no one else can do this (but me)

because how do you teach people? With twenty-eight staff, we don’t have cash and we have

a 100% turnover every two years…there are lots of balls in the air, and I guess you just have

to be resilient…I know if I didn’t just keep going, doing all these things at once, I’d stop… it

took me a long time to realize that you could only get so much done in a day.”72 These issues create a gap in maintaining continuity in the businesses and training new people continues on a revolving basis. Thus, Kevin often feels he needs to participate in all aspects of the organization in order to achieve a semblance of stability and permanence; this could contribute to his controlling nature which once again leaves the question of future leadership at TROSA unresolved. “Now we’re big and building and actually at a dangerous time.

Sometimes I feel I have to do things to make sure they get done, like the accounts receivables…I sometimes have to handle it to ensure we get paid…I micromanage at times especially when I want my money because I don’t like to write things off…this is a business-

I have to pull back from this insane pace-I have to slow down…you always have to give up a little at a time, but I’m a feisty fucker-sometimes I refuse to give up things.”73

The Future

Doing the right thing in continuing to save lives and run a successful operation will always

be at the heart of TROSA. For the future, Kevin wants to be a good father for his young

son and he needs to get his mental health back concerning his attention deficit hyper

disorder, anxiety and paranoia issues which he believes will happen soon. There are many

innovative ideas at work regarding their future and TROSA has entered a new phase in

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beginning to focus on development while simultaneously continuing to build the

organization. “Everyone usually does the development piece first-we’re doing it the other

way. We’ve been around nine years and now doing development…we’re also building a new

$6 million campus facility…part of the process is being part of the neighborhood, and you

give back. That’s what we’re doing.”74

Kevin wants to fund a school on campus to teach others how to create TROSA-like

activities in the future. There is much talk about replicating TROSA in other parts of the

country, however, this is an issue that worries Kevin to no end. A group of individual in

Baltimore have asked him to replicate the TROSA concept in Maryland and have offered

him three times his current salary. Kevin wants to continue doing the right thing and help to

replicate TROSA elsewhere, but he does not know how to do so without losing his

autonomy and sense of doing what he knows best the way he wants to do it. He is searching

for a way to balance the many issues at play, namely teaching, training and staffing at

possible replication sites while maintaining and continuing to develop the existing Durham

facility.

“We fight fights within the organization, but I have complete power…now we’ve grown so large, people want me to replicate… the more people you have in a new TC (therapeutic community) you need to send staff to help get it going, which takes away from what we do here…the problem in going to scale is having it staffed properly which takes up our staff time, which we can’t afford…when getting staff, there’s lot of power involved in managing people, particularly at the bottom trenches. I’m tired of re-training people all the time and don’t have the resources for a training organization- it goes back to ‘Each One Teach One’- we need to have enough people to teach and train, and we don’t have this yet.”

Kevin has thought long and hard about how to replicate TROSA and has come up with an alternative way to do so. He believes that it should be run by graduate staff members in combination with residents, yet have ‘straight’ people do the teaching. “ Willpower =

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Policy+Procedures; set out some policies and procedures and you only need 40-50 residents- enough to make money and not too much disorganization, so it would be run like a franchise. For example, Fayetteville (the county) would flip the bill for the residents and they would be taught a work ethic-they can rise up in position and go begin another franchise.

The in-kind wouldn’t be that big, but you could have a modular house setting which is cheap, quick and would fit lots of people. It’s a fast set up, pre-fabbed and put together at the site-this wouldn’t be reinventing the wheel. They (‘straight’ people) could come to our school to learn to teach, and the literacy part could be provided by colleges and volunteers.”75

Leave it up to Kevin to take an idea and run with it. This has been his strength and TROSA has been his joy. For such a young organization, there is plenty of life left in the future for growth and advancement of long-term objectives for a part of society’s well being. With

TROSA integrated into that fabric, the generative capacities will be limitless. According to

Jesse Battle, Kevin envisions a metamorphosis in the making. “ He has a master plan for it…he sees it, and I don’t think nobody else on the planet does, but he sees exactly where this is going and what this is going to be…that’s a door I’m ready to ride with…and whatever he’s envisioning, if it’s better than what it is right now, then man, you can’t lose…Kevin is a great man…he’s one of the very few people that I’ve ever met with such great dreams…his dream is to give other people back their dreams.”76

1 Adopted from ‘About TROSA’, TROSA Web Page(2002): http://trosainc.org/about.html 2 Adopted from ‘Resident Profile’, TROSA Web Page(2002): http://trosainc.org/about/profile.html 3 Conversation with Michael Keene, 02/14/03 4 Conversation with Kevin McDonald, 02/12/03 5 Conversation with Kevin McDonald, 02/12/03 6 Conversation with Barbara Lau, 02/13/03 7 Conversation with Kevin McDonald, 02/13/03 8 Conversation with Kevin McDonald, 01/30/03

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9 Conversation with Kevin McDonald, 02/12/03 10 Conversation with Kevin McDonald, 02/12/03 11 Conversation with Kevin McDonald, 02/12/03 12 Conversation with Kevin McDonald, 02/12/03 13 Conversation with Kevin McDonald, 02/12/03 14 Conversation with Kevin McDonald, 02/12/03 15 Conversation with William, 02/12/03 16 Conversation with Sarah, 02/14/03 17 Conversation with Candy, 02/14/03 18 Conversation with Ellen, 02/14/03 19 Conversation with Buddy Dove, 02/12/03 20 Conversation with Buddy Dove, 02/12/03 21 Conversation with Buddy Dove, 02/12/03 22 Conversation with Randy, 02/13/03 23 Conversation with Kevin McDonald, 02/13/03 24 Conversation with Kevin McDonald, 02/13/03 25 Conversation with Michael Keene, 02/14/03 26 Conversation with Michael Keene, 02/14/03 27 Conversation with Michael Keene, 02/14/03 28 Conversation with Jesse Battle, 02/14/03 29 Conversation with Jesse Battle, 02/14/03 30 Conversation with Jesse Battle, 02/14/03 31 Conversation with Jesse Battle, 02/14/03 32 Conversation with Cynthia, 02/13/03 33 Conversation with Ellen, 02/12/03 34 Conversation with Lisa Seago, 02/13/03 35 Conversation with Lisa Seago, 02/13/03 36 Adopted from ‘Aftercare’, TROSA Web Page (2002): http://trosainc.org/aftercare.html 37 Conversation with Lisa Seago, 02/13/03 38 Conversation with Lisa Seago, 02/13/03 39 Conversation with Jesse Battle, 02/14/03 40 Adopted from ‘Education’, TROSA Web Page (2002): http://trosainc.org/education.html 41 Adopted from ‘Vocational Training’, TROSA Web Page(2002): http://trosainc.org/training.html 42 Conversation with Jesse Battle, 02/14/03 43 Conversation with Michael Keene, 02/14/03 44 Conversation with Kevin McDonald, 02/13/03 45 Conversation with Allen, 02/12/13 46 Conversation with Kevin McDonald, 02/12/03 47 Conversation with Candy, 02/13/03 48 Conversation with Michael Keene, 02/14/03 49 Conversation with Kevin McDonald, 02/12/03 50 Conversation with Kevin McDonald, 02/12/03 51 Conversation with Kevin McDonald, 02/12/03 52 Conversation with Kevin McDonald, 02/12/03 53 Conversation with Kevin McDonald, 02/12/03 54 Conversation with Kevin McDonald, 02/12/03 55 Conversation with Kevin McDonald, 02/14/03 56 Adopted from ‘History’, TROSA Web Page(2002): http://trosainc.org/about/history.html 57 Adopted from ‘History’, TROSA Web Page(2002): http://trosainc.org/about/history.html 58 Conversation with Kevin McDonald, 02/14/03 59 Conversation with Kevin McDonald, 02/14/03 60 Conversation with Jesse Battle, 02/14/03 61 Conversation with Kevin McDonald, 02/14/03 62 Conversation with Kevin McDonald, 02/13/03 63 Conversation with Kevin McDonald, 02/13/03

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64 Conversation with Lisa Seago, 02/13/03 65 Conversation with Kevin McDonald, 01/30/03 66 Conversation with Kevin McDonald, 02/14/03 67 Conversation with Kevin McDonald, 01/30/03 68 Conversation with Buddy Dove, 02/12/03 69 Conversation with Kevin McDonald, 02/14/03 70 Conversation with Michael Keene, 02/14/03 71 Conversation with Kevin McDonald, 01/30/03 72 Conversation with Kevin McDonald, 02/14/03 73 Conversation with Kevin McDonald, 02/14/03 74 Conversation with Kevin McDonald, 01/30/03 75 Conversation with Kevin McDonald, 02/14/03 76 Conversation with Jesse Battle, 02/14/03

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CHAPTER 4 RESULTS: METANARRATIVE UNDERSTANDINGS FROM THE FIELD

This chapter will introduce a conceptual framework that forms the basis for developing a theoretical understanding of noble organizing. We begin by sensemaking which delineates four core functions representing the base of each narrative founded in presumed categories emerging from the data analysis that guided the protocol. Organizing processes that parallel these functions are shaped by the narratives and depicted through the lens of comparing and contrasting themes within each organization. By evaluating similarities and differences across the four narratives in the context of the basic argument of this dissertation, concepts for noble organizing will be extricated by locating and identifying explicit core functions relative to specific organizing processes that will direct us to describe and examine six guiding principles for approaching theory in response to the overarching schema, including the Principles of Intentionality, Values-led Governance, Serendipity, Unconventional

Wisdom, Reinvention and Reverberation.

The relationship between the core functions, processes and principles inform us about the design and themes associated with organizations in their commitment to the common good.

The four organizations represented in the narratives provide an alternative perspective to organizing. It is in their dedication to collectively organize around the high purpose of serving and developing human communities that noble intentions yield social action through alternative processes that defy traditional norms. A ripple effect ensues, generating a multiplicity of transformations to benefit societal development.

Core Functions and Organizing Processes

Four core functions illustrated in the narratives represent introductory ideas for invoking

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organizing processes. Each organization embodies the spirit of these functions and processes in different ways, yet at its base there exists a parallel core image, commitment, task and output (Table 9). The core image relates to the betterment of human communities, a process combining noble intentions with a purpose; economic equity, equity and respect, advocacy and justice and economics and survival become a life-long vision. Establishing an organization to serve the development of others is the primary core commitment inducing the translation of noble intentions into social action. Searching for a viable platform from which to create change, exploring a means to achieve identified objectives, collaborating with others to develop a common vision or having faith that an organization will prosper with good leadership is conceptualized and embarked upon. The core task of organizing commitment around achieving the image entails social action, having courage and wisdom to proceed with a vision and reaction, learning and recognizing the need to reorganize and adapt accordingly. Taking small steps is integral in the creation phase and experimenting through trial and error, changing the governance structure or developing strategic partnerships are a few of the many dimensions involved in promoting a socially useful product or service. The core output converges on consequences resulting from the intended course of action; becoming a model or catalyst for others in advancing long-term objectives for positive social change become part of the generative capacities for society’s well-being.

Guiding Principles of Social Entrepreneurship

Each narrative reveals unique approaches to organizational growth and serving the development of others. The context and methods of achieving a mission, size and scope priority markets, leadership styles, governance and organizational structure and culture vary

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Table 9 Narrative Comparison of Core Functions and Organizing Processes

Organizing Narrative 1 Narrative 2 Narrative 3 Narrative 4 Core Function Process Core Image Noble Intentions Economics and Economic Equity Equity and Respect Advocacy and Justice Survival Building capacities and Job creation for low- Alternative funding Building a future by wealth for disinvested income minority sources to promote promoting personal neighborhoods of residents in areas of social justice activities development for Chicago New York City in Cleveland recovering drug and alcohol abusers Core Translating Noble Establishing a shared Combining talents to Developing a Creating an Commitment Intentions into purpose and searching for explore a means to common vision organization in Social Action a viable platform to suffice for the through collaborative anticipation of hiring create change established objectives efforts good leadership Core Task Social Action A step-by-step approach Combining mid-range A step-by-step A step-by-step in using a financial theories about process in gaining practice model intermediary to enlarge cooperative funding, membership approach in the scope of community structures, adult and exposure developing the activity and economic education and training infrastructure development to approach a step-by- step process of development Reaction Learn through trial and Learn through trial Change the Strategic development error - build and error - revamp governance structure of partnerships within infrastructure in response strategies according to to respond to internal the community to existing market forces market forces and growth and conditions organizational development Core Output Consequences A model organization - A yardstick Redefining alternative A catalyst for creating the industry of corporation - giving concepts and developing similar community development becoming a principle changing the way organizations banking actor in helping to nonprofits approach nationwide reshape the home care social problems industry nationwide

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from one organization to the next. What then, is common to the organizations under study? Their organizing processes around improving a piece of society as a guide to conduct. Noble intentions are fueled by different motivating factors, all of which are grounded in human needs. The development of a common vision and shared purpose establishes a foundation from which to launch a democratic form of governance through participatory and consensual practices. Responses to unanticipated actions and events can breed opportunism in a good sense. Each organization is highly practical in their approach to improving the development of a particular corner of the world; a targeted focus on a target population. Innovating, self-organizing, under-organizing, learning and reflecting has enabled these organizations to remain at the forefront of social change and the exchange of knowledge and ideas in turn has become a shared resource promoting dialogue and action, prompting others to engage in contributing to the development of the human spirit. After reviewing comparisons of similarities and differences relating to the organizing processes and characteristics inter-organizationally from this shared ground in the narratives, six universal principles (Table 10) that provide texture to the context of noble organizing were extracted.

Table 10 Defining the Guiding Principles Principle Meaning Intentionality Willful choice to participate as an agent or catalyst for social change

Values-led Governance Members’ ethics and values drive the organizational mission

Serendipity Learning and discovering through unplanned actions and events

Unconventional Wisdom To have an image and commit at whatever lengths to pursue that image in spite of everyday realities and obstacles.

Reinvention New paradigms and ways of approaching acts of service are created in response to societal needs and development

Reverberation Sharing experiences and knowledge for others to create and respond

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In-Depth Perspective on the Guiding Principles

Developing the appropriate label for each principle was at times very simple based on its obvious elements and alternatively very trying based on feedback and further excavation of its concepts. The principles can be expressed differently in each organization and are the guiding elements for shaping the core image, commitment, task and output (Table 11).

Iterations found in different contexts elsewhere in organizational life are equally significant to the concept of noble organizing.

Table 11 Approaching a Theoretical Understanding of Noble Organizing Function Organizing Process Guiding Principle Core Image Noble Intentions Intentionality Core Commitment Translating Noble Intentions into Social Values-led Governance Action Core Task Social Action Serendipity Unconventional Wisdom

Reaction Reinvention Core Output Consequences Reverberation

Principle of Intentionality

The Principle of Intentionality was originally termed the Principle of Voluntarism because of my desire to express free will as a fundamental agency in persons choosing a pathway to embark upon social purpose endeavors. I simply thought it was a more admirable expression. However, round two of interviews exposed the indecency of that term by many persons who felt it connoted a ‘volunteer’ image; I was assured these persons were getting paid for their employment. After a more cogent investigation into its elements and in consultation with many participants in the study, I decidedly felt that the Principle of Intentionality captured the spirit of its meaning. Different motivating factors stemming from experiential learnings, personal histories and societal

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influences were instrumental in persons opting to participate in social change; with great intention did one choose this pathway.

The Principle of Intentionality depicts a willful choice to participate as an agent or catalyst for social change and is fueled by noble intentions derived from various motivating factors.

Less consciously, the choice to effect change is often motivated by a psychodynamic of personal disappointing life experiences and the social conscience in effect, becomes the driving force to actively pursue a muted passion. The founders of Shorebank Corporation had a penchant for racial equity and Cooperative Home Care Associates aspired to create an authentic, non-authoritarian community workplace.

Conversation with MH from Shorebank Corporation, (Narrative 1) round 2 of interviews:

MH: “ We created the bank based on having an outsider role. None of us (the founders) fit well within the existing system of things.”

Narrative 1: MH: “I think Jim felt the OEO was able to make an impact yet he believed it was marginal compared to the monies that were being put into its programs. Milton was frustrated in really being able to impact the lives of people…they could accomplish changes in legislations, get people the right to vote etc. but was it really changing their economic outlook?”

Conversation with SD from Cooperative Home Care Associates (Narrative 2), round 2 of interviews:

“There’s the dark side of what drives people and success…there’s a myth about entrepreneurship-people think individuals are powerful and want to get out to do things…the dark side is the side of fear…the constant questioning of oneself…the outsider mentality…there are negative experiences that are just as powerful drivers…what drives people and helps them keep successful is constantly feeling like an outsider…you can be successful because you’re fearful not to succeed and always questioning and adapting to get to the goal…you’re constantly fearful- is this going to work? Do we have enough money? It’s being trapped in one’s own creation and its hard to gain perspective because you’re inside that.”

Narrative 2: RS: “My vision was a result of lots of cumulative experience but also mostly negative experience that made me think about what I really wanted…and that drove me.”

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“I’m a class outsider that feels very much like somebody who doesn’t belong and yet has the appearance of looking like they do. And so I’ve dealt with that by living in borders a lot…I just didn’t feel like I fit anyplace and it was very hard to find people who cared about what I cared about…you could choose one of two very specific divergent paths…and I chose the one to be very conscious in the sense of other.”

“Nobility in many ways comes from the rejection of something else…and then imagining what could be different that would speak to me.”

Conversation with SG from Environmental Health Watch, (Narrative 3) round 2 of interviews:

“ What drove me was more about not wanting to work in a for-profit and being repelled by bad things about capitalism…it’s about trying to avoid doing bad things which makes you do what you do.”

Consciously, there may exist a profound passion to contribute to the development of others based on experiential learnings and environmental influences. Members of Cleveland Public

Theater and Lutheran Metropolitan Ministry were influenced by their upbringing and society, to a large degree. TROSA was founded on the principles of “Each One Teach

One”, a practice-model approach based on cooperative learning and educating.

Narrative 3: JL: “(At La Mama) Everybody would always be talking, talking about cultural stuff and political stuff and social stuff…they were very experimental and were a little bit underground…they were more about participating in plays about bigger issues and concerns…so there was just a sense of activism brewing in this place where different energies were coming together in a kind of combustion of ideas and cultures …I’m much more, by nature and experience, a social or political activist more than a theater entrepreneur…and I always thought this kind of theater as a way to do, as a means of activism and to effect social change and to enhance awareness of political and social issues of the day.”

DE: “ I got this urge to do something different and to deal with some of these social concerns…this was the civil rights era…this was the Vietnam War…despite what I did for a living, I have always had a fairly strong set of left-of-center politics.”

Narrative 4: KM: “I am what I am…I learned a lot from on the job training and thought that’s how others would learn, but I was wrong… the 12 years of training taught me not to quit…I learned to do it in a way that I could teach others the same…In ’91, they asked me to interview here but there was no money available to do it, and I turned it down…but then

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they kept coming at me…I was into it because I liked what I did and it was doing the right thing.”

By surrendering to noble intentions, social action has contributed to empowering and developing others. Experiencing negative effects of racial discrimination led Shorebank

Corporation members to challenge the system by investing in the future of disinvested communities. The rejection of conventional norms and structures drove Cooperative Home

Care Associates to develop a community of culture that heightens the self-valuing of a target population. At a time when organizations were being de-funded and the need to create equitable structures in the community became more pronounced, Greater Cleveland

Community Shares actively sought ways to support social change agents in their commitment to improve parts of society. The willful choice to act on experiences and knowledge to serve the underserved and change lives has enabled TROSA to form and flourish.

Principle of Values-led Governance

The Principle of Values-led Governance began as its own independent entity like most of the other principles, however, after fine tuning the concepts within each category it became apparent that the formerly named Principle of Collective Action needed to be subsumed under a values based label because of its properties. The Principle of Values-led

Governance incorporates the development of a common vision and establishment of a shared purpose through a collective process. The concept of leading by values invites membership consistent with its mission that drive the organizational directives. With great conviction, spirit and determination does cooperative action stimulate social and personal growth in those communities served by the four organizations represented in the narratives.

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The Principle of Values-led Governance requires the development of a common vision directing the establishment of a shared purpose. From this shared purpose, translating noble intentions into social action facilitates charting new ground in establishing a values-led organizing structure that invites membership consistent with its mission that is related to social impact as opposed to wealth creation. Values, ethics and mission therefore become the primary drivers effecting the organizational directives throughout the organizing processes.

Like most social movements, it takes a handful of persons in dialogue to envision, enact and implement change; this involves a tremendous amount of courage to traverse unknown territory and think in more unconventional terms. Converging on the needs and desires of others wanting to do something greater and extraordinary can often provide the impetus to develop a shared ground and lay the foundation for that image.

Narrative 1: RG: “ At the time it seemed the only organizations in our society that cared about the totality of needs that existed in urban communities-housing, schools, childcare, crime, small businesses…were volunteer neighborhood-based community organizations…so it seemed to us as we would drink beer that there ought to be a way to take that kind of organization with that kind of agenda and wed it in some way with what we were doing at Hyde Park, which was essentially running a self-sustaining organization that was dealing with one facet of that life and doing something that everybody said could not be done…”

MH: “ Our job was to turn the banking industry upside down…we had this idea that the people’s deposits ought to be used in the people’s neighborhood or that you could attract deposits from outside and channel them into a neighborhood…these ideas kept us going- that we would prove that racial change and economic deterioration were not inevitable…we were going to prove that neighborhoods that were African American might be economically stable, too…there were not just poor people living there, there were working class, too…and the neighborhood didn’t have to go in the way of demolition…the satisfaction of innovation!”

Narrative 3: LC: “What became very exciting was the concept of taking this whole workplace fundraising entity that had heretofore been monopolized by UW since 75 years, and had started in

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Greater Cleveland…and to be able to use that source of funding for social justice as opposed to social service.”

It has been the responsibility of leadership to articulate the values that have permeated into

each organization (Table 12); the integrity and clarity of the social mission ultimately

becomes the vehicle to guide strategy, decision-making processes, hiring and retention

decisions and serves both the stockholders and stakeholders in the community.

Narrative 1: RG: “…in the end, capital controls and if we were going to try to pursue the mission or the vision that we had, we had to have shareholders who agreed with that position (reinvesting profits back into the community and organization).”

SM: “ It’s just the underlying set of values and beliefs that the organization subscribes to and it permeates from there…it’s what attracts talent to the organization…and it’s ingrained into the fabric and culture of the entire corporation…”

Narrative 2: PD: “My job is to get all the key stakeholders in the state to begin to work together on what reform could look like-agree to a set of principles, begin to understand what the possibilities are other than what we have now and begin to make the trade-offs that will be necessary in order for there to be a negotiated reform.”

Narrative 3: RB: “…I had heard about them somehow…they were a very intellectually curious population, with a lot of basic democratic values…I called them up and said come and talk to me about beginning a workplace campaign…they appealed to me because I recognized them as kind of nontraditional and kind of counter culture…and I wanted to be a part of that, as I though they’d appeal to the employees of the organization I was working…it was about their advocacy stance…they were committed to changing the basic conditions that were less than democratic, that were less than engaging, that were un-empowering…”

Narrative 4: MK: “And where else could I have been with forty felonies on my record and have the opportunity to run a $3-5 million business and have somebody like Kevin that actually shows me certain things and basically molds me into doing that in one way or another?”

Having strong values has the potential to create advantages in the marketplace. A values-led organizing structure affords the opportunity to form alliances with other organizations having similar values; the newly-formed relationship is founded on principles that emanate from a position of collaboration and trust. An organization can become more efficacious

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Table 12 Prominent Values Instilled into the Organizational Ethos Values Narratives

N1 N2 N3 N4 Entrepreneurialism x x x x Competing principles of autonomy and collaboration x x Respect for the contribution of all organizational members x x x x Encouragement of participation and dialogue x x x Knowledge sharing and building x x x x Consensual participation and inclusion x x x x Innovation and creativity x x x x Experimentation and risk-inclined x x x x Focus on business assistance, wealth creation x x x x advocacy, education and/or jobs training Empowering community members x x x x Development output and profit is at the core x x x x Developing a sense of community x x x x Interdependence amongst organizational x x x members and/or affiliates Egalitarianism x x x People-centric institution x x Democratic principles of equity and respect x x x x Mutuality, reciprocity and shared gains x x x x Becoming a greater force in the community x x x x through shared partnerships Collaborative efforts in achieving the mission x x x x Create change through democratic values based x x x x on education, empowerment, advocacy and training Cooperative learning x x Honesty and accountability x x Developing self-esteem and confidence x x x

because of its people; the capacities to recruit better talent is more plausible when searching for those who identify with the mission.

Narrative 1: BW: “ We now had these two entities out in the Pacific Northwest for which that was their primary mission, and we saw both the value of incorporating it into who we are and the necessity of doing so…”

SM: “ They wanted to attract talent to the organization- talent that had the right values and the right experiences that could contribute to the organization’s development from a mission and operating standpoint…that influx of talent has brought with it obviously a different perspective on what to do and how to do it…and the organization has been very receptive to that.”

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Narrative 2: SS: “The whole thought about quality jobs-quality care gains traction throughout the long- term care industry nationwide via our three core areas including practice with our affiliates, consulting relationships and disseminating information.”

SS: “It enabled them to become affiliated with PHI in order to provide or solidify the technical assistance relationship.”

Narrative 3: JL feels very connected to the advocacy and social justice agenda promoted by Shares and is glad to be aligned with similar organizations part of the network. The five prominent values and virtues he believes are common to both CPT and GCCS include honoring and respecting personal dignity; economic justice, or honoring the plight of disadvantaged people; social justice issues; cultural justice and urban renewal.

Narrative 4: “…I want to build nice houses for my people and I want to continue helping to build a better community…I bought the first two houses for $14,000 each and then bought the one across the street for $40k. This is what changes neighborhoods because no one would want to touch those houses…I just want pride for who we are and contribute to the neighborhood. We need to build goodwill here because we started with nothing…and we can contribute to developing the neighborhood and community…that’s what it’s about. We have to participate in the neighborhood…it’s about making you part of them rather than less than…”

Values help foster invention and provide courage to experiment in unknown territory.

There exists an inherent desire to change the system so exploring alternatives become

essential. Organizations that forge new ground often have stubborn leadership at the helm.

An ultra pure image is envisioned and values-led organizations are able to chart new paths

because of the evangelical belief about a vision that ultimately cause members to push

against the odds to innovate. There is a conviction, almost spiritual determination to

accomplish social goals. It is this power of commitment that takes a great deal of

determination to change the course of business or industry.

Narrative 1: GS: “ Successes here often don’t emanate from direction from the top…they generally come out in a very organic way as the managers take the responsibility to move things forward…what we’ve accomplished is due to all these people on the line, on the crew, and doing their job…it’s constantly evolving and sometimes out of control. Sometimes it works really very well and other times it falls off a cliff but at the end of the day, all the

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management people are producing a lot of activities that are really relevant and they’re moving the organization in new ways all the time…it’s a completely non-static company.”

Narrative 2: RS: “As a visionary you have a pure model-your own vision of what should be… It’s just a founder’s mentality and I have a good deal of founder’s disease…it’s not like you can cure it, you can just try to control it…I do think it’s important to disseminate our ideas and treat them like seeds to grow someplace and hopefully they take root in a good way…but those things that we’re not doing directly, we have no right to think they’ll turn out exactly the way we want them to.”

Narrative 3 TH: “So, you’re trying to move off of whatever your tradition is... you’re looking for another way in which you can raise what are predominantly non-restricted funds for your organization so that you aren’t hemmed in by somebody else’s rules...”

Narrative 4: KM: “ When my wife and I moved here, I taught her how to drive a forklift and moved one- hundred beds myself that were donated from Duke because you gotta do what you gotta do…”

KM: “…it takes pure sheer determination to make the kind of difference we try to make…”

A community-focused value system consisting of participation, mutuality and shared gains comes alive in these organizations. Cooperative action through participatory and consensual practices endures when democratic principles are in effect. Learning through and with others promote relationships that are consequential to both personal and organizational growth and transformation. The exchange of knowledge and dialogic interaction provides a mechanism for groups to collaborate and form shared partnerships in anticipation of becoming a greater force in the community.

Co-development inclusive of all stakeholders encourages participation and produces social action around a common ground.

Narrative 1: BW: “ We talk about the natural tension between the fact that we need to work together and get value from working together but we all still value everybody’s capacity to develop something and run with it…this has been a hallmark of this organization…”

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LR: “…it’s also creating a whole new degree of integration across all the different parts of the bank…”

Narrative 2: RS: “…can you communicate what you want in such a finely detailed way or in a particular way that people can see it as well and share it…people then are there because they’ve come to believe in the same purpose and share a vision of what the place should be like…and that’s ultimately powerful.”

SS: “So it’s not just a mechanism for information exchange, it is true participation and to some extent, a forum allowing direct-care workers to exercise their ownership right and live out those rights as owners on a daily basis.”

PP: “If you don’t value the people, then it gets lost…focus had to be about holding the company accountable to its ownership and participation culture because if you don’t have somebody that sees that as a key role, it will get lost.”

ME: “We epitomize the notion of taking from the community and giving it right back…”

Narrative 3: CB: “They’re giving part of their own political capital (referring to member agencies) to assist in the growth of something bigger than themselves, which is Community Shares.”

CB: “(They) turned into this model of the whole world is their client…organizing, empowerment and social change were not part of how you became part of (them)…they closed their doors and didn’t want new members which created an opening for us. There was no way to put choice groups and issues in …all these issues were out there and all really begging to have a place where people could do workplace giving… we really talk about the issues that are on the cutting edge of what it means to make change and there’s always a tendency when you have a clubhouse to close the door…and I’ve been able to help people understand that by opening the door and keeping it open to new groups, we can be greater than any of our individual selves… we give recognition, cash and a sense of place to those organizations who work for justice.”

Narrative 4: ‘Each One Teach One’ is the mantra at TROSA and captures the culture of the organization. It is suggestive of the philosophy that each person within the system is taught and trained, helped, supported and developed by others within the system and it remains a continuous cycle.

W: “…one person’s support is another’s therapy.”

KM: “…part of the process is being part of the neighborhood, and you give back. That’s what we’re doing.”

KM: “ We’re like mountain climbers…we’re all attached by ropes lifting each other to the next level…”

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History: TROSA web page: ‘TROSA’s ambitious future depends on continued support from the community and those that share in TROSA’s mission…these organizations provide TROSA residents with needed services and opportunities and at the same time TROSA enables these organizations to realize their goals and missions.”

Principle of Serendipity

Labeling a principle ‘serendipity’ received the most attention from participants in the study and professors on my committee. Many of those interviewed felt the concept of serendipity depicted their own realities, however, it was overwhelmingly clear that most preferred and suggested the label ‘Opportunism’. I have held steadfast on this point and believe that serendipity captures the essence of these organizations. Its elements originating with the development of a shared ground and forming partnerships act as a catalyst for opportunistic behavior to follow. “I think a lot more decisions are made on serendipity than people think.

Things come across their radar screens and they jump at them.” (Lorsch, 1984). The four organizations possess capacities to respond efficaciously to unplanned actions and events and in turn, the consequences of social action help shape the organizational focus.

Is kinship a preface or postscript to founding a shared ground? The Principle of Serendipity elucidates the complexity of this question. Learning through unplanned actions and events can lead to establishing relationships based on a common vision and concurrently, a common vision can serendipitously lead to the establishment of relationships. Accordingly, these narratives illustrate that both realities exist; forming partnerships ultimately provide the basis for establishing a community of competence that inspires courage and determination to collectively introduce social action.

Narrative 1: MH: “ We really thought each other was just the greatest thing we ever met…this was really a tight team and we just sort of clicked…we had enough success that we thought we could do something bigger than this and so we just dreamed it up and did it.”

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BN: “ My guess is that they didn’t have any idea what they were doing…but they had heart and they had passion.”

Narrative 2: PP: “…I continued to do stuff that I felt was relevant around education and training but I was always sort of waiting for the moment when Rick and I could reconnect back up...we wanted to take the work we had started(at MAP) to another level...”

RS: “I don’t think Cooperative Home Care would have existed in its current form if it wasn’t for the partnership with Peggy in the first six or seven years. In major ways the culture formed in a crucible between Peggy and me…it was a very good partnership. We had very different personal styles that we had to figure out how to blend and we knew that-we knew each other from before and we were friends…we came together and managed to become friends about our beliefs in adult education and about how it should be done….”

Narrative 3: Chip brought this concept (workplace fundraising) back to several colleagues from various advocacy groups in Cleveland. Lana, Chip and others put together a group of seven to eight individuals who took interest in pursuing the idea and were already involved in grassroots advocacy work to promote equality in the community.

Narrative 4: A group of social justice individuals, criminal justice types and local volunteers in North Carolina…wanted to create an alternative long-term rehabilitation program for substance abusers in Durham. TROSA was conceived and created… with an organizational idea in place ready and waiting for implementation…they did not have the experience to put a program together themselves and requested Kevin’s assistance.

Serendipity often leads to opportunistic behavior. Social action calls for counterintuitive thinking in promoting systemic change when charting new territory or going against the grain of existing market conditions. In the midst of persevering, unplanned actions and events can often steer initiatives onto new and unexpected dimensions. It is therefore imperative to capitalize on opportunities to enhance the mission when launching into the unknown.

Narrative 1 exemplifies the Principle of Serendipity from its inception through to its own evolution. The circumstances that led to the development of an industry emanated from an

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initiative to support social activities; it took resourcefulness, courage and ingenuity to impel it onto a higher plateau.

RG: “Adlai told me that the little research he had done revealed there were virtually no banks in the city or perhaps the state that were willing to make loans to qualified small business operators…he put in a $1million deposit from the State of Illinois into our bank for one year at the market rate of interest so that we could provide loans to minority-owned businesses…we accepted that… and that could well have been the beginning of social investing in the United States.”

Expansion to other areas of the country was the outcome of unanticipated destiny.

BW: “ We didn’t do a study of the 100 cities in the US and decide that these are the ones we want to be in…it just sort of happened…all of the expansions except for the first one have been opportunistic- an opportunity came along and we took it…the timing may not have been right and in a perfect world the way we did it might not have been the way it should have been done for maximum, early best results but we took the opportunities and ran with them.”

Shorebank Corporation was approached by an environmental organization to explore ways to combine community development with their ecological agenda. The adoption of conservation into their mission was fateful.

LF: “ Mary went out to the Pacific and got all excited about the whole idea of conservation…they’re out there and they came back talking about oysters- there was a whole deal about Bay oysters and that they’re the best oysters in the world and we kept thinking, ‘what the hell are they talking about?’…the next thing you know we’re talking about developing a nonprofit in relationship with Ecotrust and everybody thinks they’re crazy.”

Serendipity is a consequence of social action as illustrated in Narrative 3. Each of the organizations are an accumulation of precipitating events that have shaped and inspired its members to innovate and create newer designs for the future.

SG: “There needed to be some coherent message to the agencies about the need to develop programs, the need for greater enforcement, the need for simply better public education about what to do when they’re confronted with these situations…the citizens needed a place to call that had answers…the inside people at the agencies were saying that they were limited in what they could do without some political pressure…the outrage factor from the outside needed to be goosed up a little…so that was a nice invitation.”

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JL: “…to have these people…becomes so much the fabric of who we are. It endows us with a greater perception and sensibility that we otherwise wouldn’t have. We’re a better organization from having them part of it.”

Developing relationships with kindred spirits from various grassroots organizing groups helped cultivate a shared ground from which to launch Greater Cleveland Community

Shares. The advantages of doing so superceded the present state of affairs and receiving philanthropic donations would have been at a minimum, good luck.

CB: “Let’s study the issue…you know, how much more can we get hurt? I mean we’re not getting any money now…and we’re not going anywhere so let’s try to take a look at this.”

Lutheran Metropolitan Ministry was founded in response to urban unrest and through a cooperative effort spearheaded by citizens and clergy, an organization was created to respond to this upheaval. It was fate and almost 30 years later that brought Dan to the organization.

DE: “I had known Dick off and on very casually in his capacities here or in some community issues for a quarter of a century…he heard that I was wandering aimlessly on the streets and told me that he always wanted to have a Director of Advocacy for the core organization…no one had coordinated it historically…so he said to me, ‘I have a great idea. Why don’t you come to work for us. I have no money to pay you and you can work full- time.’ I told him I’d think about it…I thought about it for about half an hour, called him and said I’d do it.”

Principle of Unconventional Wisdom

The Principle of Unconventional Wisdom subsumed the former Principle of Progressive

Determination. Unconventional describes the backbone of these organizations and the wisdom and courage to forge new territory and break new ground captures the progressive nature of determination and fortitude. Counterintuition drives the pragmatic nature of these organizations that have a will to succeed in changing the social system. Grounded in strategic long-term vision, tools are developed organically that lends itself to enhancing the

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creativity and resourcefulness of its members. Autonomous work conditions evolve in the face of an under-organizing environment that produce innovative designs and programs that go beyond existing paradigms.

The Principle of Unconventional Wisdom is guided by pragmatism; it is having an image and committing oneself at whatever lengths to pursue that image in spite of everyday realities and obstacles. Each of the narratives expose an ideological base for promoting social action, however, the organizations as described are realistic and highly practical about discovering ways to implement their vision. Members do not depend on institutions for support, instead they become creative and resourceful in finding the right sources of funding, ultimately moving towards self-sufficiency. This is an important aspect in distinguishing the ‘noble’ in organizing from organizations with a noble purpose. Social entrepreneurship organizations are visionary, their mission is grounded on people’s needs and realities and they are skillful in tending to the practicalities of business; these realities irrefutably trump ideology, eventually shaping the organization.

Narrative 1: MH: “ In the end most of the things that are idea based don’t make it in the real world…in the first ten years, we had lots of trial and error which were tried and errored- it was a gruesome time.”

JP: “ The founders’ ideas were very based in ideology but it was grounded and rooted in real life business experience…and so I think without those two things they wouldn’t have succeeded.”

SM: “ It requires constant vigilance to protect the mission…it starts at the top but it goes all the way down through the organization…the founders are the key to this balance as they have subscribed to this belief for more than thirty years and it’s well ingrained in them. They’ve never given up on the idea of being able to make a difference using conventional banking and other techniques…that has remained constant over a long period of time which adds stability to the whole notion.”

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Narrative 2: RS: “The fact is I knew very little about how to run a home care business…and then I became President and so there was this real pretty steep learning curve. And I felt like I knew a lot about organizing a group of people to do something…but combining the two was not so easy given that the business lived and died on whether it made money or not and whether I was a good organizer or not…and I knew what I was doing even though I could have done it better…but learning the industry-just being with people, asking questions, listening, learning from them, trying to figure out what to do with it next…the first five or six years were all about internal things but I think being sure of myself on big organizational issues and learning the business, which I had a different approach than almost all of my peers who ran agencies, was the most important. It was not to grow it quickly but it was really to figure out how to do it and that would mean we’d make less money during the boom time but that we’d be a high-quality organization…this was the growth period for home care and some people thought I was being foolish.”

Narrative 3: RB: “…we got very purposeful on selecting community directors for specific business skills, management skills, organization change skills, marketing, public relations…Shares is small enough that you can come to Shares and exercise those skills in support of social change.”

Narrative 4: KM: “ In the last two years we’ve added 15-16 staff…we need to refine the infrastructure in order to keep up with the growth…two years ago we got a CFO…it’s a learning process for developing staff and it’s difficult when all the peoples are at different levels, which means we have to train at different levels which is difficult…also, we lose 60% of the people every year and we have a 100% turnover rate every two years…it’s fine to be idealistic but you’ve got to survive in this kind of transition.”

The task of noble organizing entails resourcefulness and a great amount of fortitude in devising new strategies to challenge social concerns. Unconventional wisdom begins by adopting a step-by-step approach toward development that often leads to experimentation; it requires pragmatic approaches grounded in strategic long-term vision that necessitate capitalizing on intellectual resources, experiences and knowledge to enhance the mission.

Searching for new perspectives enables the organization to stay fresh in their pursuit of ideas; it is in tapping into the strength that also exist elsewhere and being able to bring it into the organization that add to organizational learnings and development. Collectively, the varieties of knowledge and experiences facilitate a mutuality of effort and interdependent contributions leading to a self-organizing and often autonomous working environment.

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Narrative 1: MH: “ We didn’t really think too much about all the things that could go wrong nor did we really imagine that we were going to learn as we go along…we were just going to go one step at a time and figure it out.”

BW: “It needs the capacity to figure out where people are and how you can address particular needs with the tools that you have or how you can design your tools…I don’t think it’s a field of endeavor that is esoteric, it begins with somebody who starts with that commitment and is intelligent enough to figure it out.”

PS: “ The good side of it is that for people who are very motivated, it’s a great place because you can learn the tools and then the organization allows you to discover what it is that you like applying those tools toward…within our sort of disciplined business environment is lot of room for personal growth in learning what you want to become.”

Narrative 2: RS: “ We didn’t have a grand theory. We had a collection of mid-range theories, an eclectic so that we had a mid-range theory about adult education and how people learn. We had a mid-range theory about what the cooperative structure would look like and we believed that the most important thing was the culture of the organization…it’s really important to see Cooperative Home Care’s development as neither linear nor one grand vision…I had previous failures…and so that one of the things I learned because of them is that I had to think in terms of stages of development…I learned not to work in the second stage when I was doing the first, and I don’t think Cooperative Home Care would have existed if it were not for that major change in my thinking.”

PP: “It’s grown primarily through the leadership of Rick and Steve at different points. Steve on the nonprofit HCATI and PHI side and Rick in terms of the growth and preservation of CHCA at different points in its history. On Rick’s side and from a nonprofit business perspective side for Steve, Rick sees the development of CHCA as a business first. For him, it has always been about the survival of the business-he knows the industry, reads the tea leaves, is incredibly creative and knowledgeable and figures out what we need to do in order to get to the next level.”

Narrative 3: LC: “You have to do the work to make the organization grow…and you have to do all the common things to build the Board, and to get the volunteers and to get the workplaces…it’s a step by step process, and you just have to keep doing it.”

RB: “It was no longer good enough just to think Shares folks are cool, you have to be able to bring something, contribute something…and I think that was huge.”

Narrative 4: KM: “ We didn’t have a business plan- I just started setting things up…”

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KM: “ We don’t get government money, not that I wouldn’t take it. I’d be glad to take it…I started this from the ground up-lots of people are singing our praises but we still have lots of work to do…trying to get grants takes time and takes away from getting the job done…I guest that’s life…you’re peeing in the wind a lot… we’re in survival mode always…in order to keep taking the next steps it costs money and we’re not going to shortcut it.”

Under-organizing in the face of ambiguity and uncertainty creates a platform enabling members to envision and invent beyond the boundaries of existing paradigms. In an environment that fosters innovation and creativity, members willingly devise new strategies and tactics in response to challenges, which gains traction when forging new ground.

Committing to an idea unaware of its consequences inspires freedom to explore and discover. Tools are developed organically to respond to existing realities. Improvising means to achieve objectives can be tried and tested; failed attempts are rejected and successful practices learned and disseminated. This can often lead to the invention of new designs and programs that engender wisdom allowing an organization to stay ahead of the current trends by creating them in their wake.

Narrative 1: JP: “ The problem was the appraisal…so what (we) decided to do was train (our) own appraisers…and then sent them out and said ‘Don’t do it on appraisal guidelines…we want to appraise it based on their real market values’…so they gave selling price values to these homes…as a result, property values in South Shore rose faster between 1970 and 1980 than any other community area in Chicago because of (the) appraisal process- not only would they appraise it but they would stand there and make the loan…it was very successful.”

LF: “ Ron and Mary believe in that- that you get some of your best ideas when you let people fly a little bit.”

JP: “ We rewarded her for risk taking and for trying and for having a good idea…and we learned from her-we took the lessons from her experiences and incorporated them into our future actions so that we can really get to where we want to go anyway.”

NK: “ At SAS they’re creating products for their clients whether it’s a bank in Louisville or a nonprofit in Romania…they’re trying to solve problems and come up with things so they’re constantly creating and it might not be anything we’ve done before…we don’t like to follow anybody else’s rules- we’re an independent sort of bunch.”

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LR: “ We’re trying to set up systems to encourage innovation and then have ways to screen and test ideas so that the good ideas can ramp up and reach scale much more quickly, the bad ideas will get cut early on and the ones in the middle-somebody’s really watching to see whether they need to be ramped up or terminated… We want to keep the innovation. We want to keep the sense of personal commitment. We want to keep the sort of freedom to come up with wonderful new ideas and at the same time set up systems and structures so we can really use our resources wisely so we can be more effective in doing all these different things.”

Narrative 2: ME: “It’s a new program we just started so its fairly experimental…our tasks will just continue to grow as the needs of our workers grow…as we identify them, we try to fulfill them.”

JB: “A lot of the home health aides are getting involved and that’s what we need to do is keep them involved…if they stay involved, their chances are better to be noticed…to be heard.”

Narrative 3: CB: “It made us really get down and kind of grab ourselves by our seatbelts and do the best we could do with what we had…we have had a benefit of having longtime small family foundations as supporters of Shares, and the fact that we were a co-op made us depend on the wisdom and generosity of the member organizations to get Shares off the ground.”

RB: “We weren’t doing the basics anymore and the Board meetings were becoming really disorganized…there was a sense of entropy going on, as things were not being managed as well…it became too loosely organized a system…”

Narrative 4: JB: “If a resident comes in who can lay bricks-he laid bricks…first thing Kevin does is he puts a little sign up here on the board. Who wants to learn how to lay bricks? They start a brick masonry class. That resident teaches them how to lay bricks. Next thing you know he’s got about ten guys that can really lay bricks with him…uh oh, Kevin’s starting a business…he was just a tree man…he had a chain saw in his hand, swinging like Tarzan…he started teaching people and we now have a tree company to cut down trees and things of that nature…”

KM: “…better think ahead or you’re dead…it’s noble shit here…it takes basic common sense and then you do something about it.”

Principle of Reinvention

The Principle of Reinvention, labeled as such is self-explanatory. The four organizations have continuously reinvented themselves in the face of trial and error and experimentation in learning what works and shifting resources in that direction. New ways of approaching

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acts of service have been created in response to reaction and reflection. Reorganizing has

emanated from a learning to learn model enabling these organizations to remain adaptable

and flexible to environmental stimulants. Inventing and re-inventing has been consequential

to shaping industry standards, affecting public policies and contributing to human

development.

The human condition is constantly transforming keeping organizations in perpetual motion.

Reorganizing in order to adapt to changes often justify the need to revamp, regroup and

reconsider strategies. As demonstrated in the narratives, this reaction process is not a

deterrent; remaining flexible and adaptive in response to external stimulants enables

development in unforeseen directions. The Principle of Reinvention reinforces the

capacities to strategize and prioritize along unspecified dimensions in order to benefit social

returns. New paradigms and ways of approaching acts of service emerge as a result of

exploration and experimentation. In due course, reaction and development entails a

pragmatic approach to learning what works and shifting resources in that direction.

Narrative 1: BN: “ We can’t continue to do those types of projects because again, it’s profitability and development…so we’re going to reinvent ourselves.”

Narrative 2: PP: “…and we moved in that direction (creating PHI) because we couldn’t do what we couldn’t do…we had to take it to another level to be able to really sort of get closer to what it is that really makes this a quality job and really makes it a job that people want to come to and should come to and be supported...”

RS: “We wanted to make our own market and have more control over the bundle of services and money. As conceived, we do that today…it’s just a question of whether we’ll succeed in doing that.”

Narrative 3: LC: “We switched from the member board to the elected board…and it was due primarily

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to the fact that we were growing and that our board was not a very committed board because it was an appointed board…”

TH: “We reconstituted ourselves…we didn’t lose any of our principles, but we got more focused.”

Narrative 4: KM: “ We’re doing holistic shit…when you start interacting too much you become too mainstream and that maybe takes away from the noble shit-but maybe we have to start setting up a process-at least that’s what they tell me…they want me to do development and going to scale…”

By responding to societal changes and through trial and error, organizations often engage in a reflection process to assist in reinventing for the future. When learning to learn, refocusing efforts on developing new programs override existing ones. Expansion takes place structurally and organizationally in order to evolve and meet the needs of societal development in response to existing and future realities. Establishing alternatives in response to more regulatory constraints and limitations become essential in order to continuously provide a socially constructive product to human communities. The process of reflection is simultaneously historical and futuristic; history gets connected with the future in the present context.

Narrative 1: LR: “And their job was to grow managers inside who could then be transplanted around the world to recreate what we’ve done…well, reality strikes. They spent the first five years just trying to make the bank profitable.”

Narrative 2: RS: “I’ve said the industry needs to be unionized-that if you look at companies in industries where low-income workers dominate, the only one difference between good paying jobs and low paying jobs is the union involved…. we’re saying we can’t exist separate from the market and we therefore want the market to look like this…if we want the market to look more like us, unions is the only intervention you can make for the industry to do that.”

PP: “…you’ve got to have people who believe in whatever the social aspect is that they’re trying to interweave into the business…skill and dedication is important, too. I think that if you have all the goodwill and all the passion in the world, if you bring in the wrong people- you’re not going to get it right. I think there needs to be somebody who has a vision for the world and others who implement it…I think the organization has to be adaptive. Passion

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gets you started and I think skill and tending to the realities is what keeps you going…and you have to make hard choices like firing people and holding one another accountable for their actions. I think you have to do that checking and holding yourselves as leaders accountable to that vision. You have to be genuine and you have to be honest-it’s an almost brutal capacity at times to be self-judging and self-accountable and assume that responsibility…it’s also that level of reflection that enables us to continue and create newer levels-it’s that ability to step back and evaluate and re-evaluate what is happening.”

Narrative 4: KM: “ I learned a lesson-no one else can do this (but me) because how do you teach people…we don’t have cash and we have a 100% turnover every two years…there are lots of balls in the air, and I guess you just have to be resilient…I know if I didn’t just keep going, doing all these things at once, I’d stop… it took me a long time to realize that you could only get so much done in a day.”

Principle of Reverberation

The Principle of Reverberation portrays the humility of nobleness most eloquently. While most organizations re-tool their arsenal when competition enters the marketplace, the social entrepreneurship organizations as described embrace competition. They are willing and hoping to share and disseminate knowledge and experiences to help cultivate the growth of more similar organizations. Acting as a model and catalyst for others to follow stimulates more service to communities which translates into more persons becoming positively affected. Co-joining efforts with other organizations produce a ripple effect that in effect helps broaden a far reaching purpose.

Sharing experiences and knowledge inspires others to co-join in the pursuit of betterment.

The consequences of disseminating information has the potential to create an entire industry and effect public policy in ways that change a system. Becoming a model and catalyst for others to follow equip existing organizations with the capacities to learn and contribute even more; partnering with neighborhoods help jump-start activities leading to growth in communities. The creation of competition is embraced; similar organizations participating

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in societal development equate to additional investment in communities. Contributing to positive social change through action and policies generate newer, systemic-wide shared designs for the future. The Principle of Reverberation advocates generative capacities that allow for great visions to become realities, eventually transforming the lives of everyday human beings.

Narrative 1: BN: “ It was the basis for the CDFI Program that President Clinton introduced in 1993…he used this model to cite in passing the federal legislation that has resulted in community development banks in this country.”

SM: “ Ron and Mary specifically have been trying to share our concepts with others, trying to build an infrastructure that will support institutions of a similar type…that we encourage institutions to be formed to do the same kind of work I think is the real legacy of the organization, the whole idea.”

LF: “ We act as a catalyst, once we get the ball rolling then we start building capacity, then the communities can start growing on their own…we partner with the community rather than acting in it.”

Narrative 2: PP: “So we ended up putting together a three year plan, of which we’re now in the third year. PHI wanted to become the go-to organization for paraprofessionals, for knowledge and information and about improving the health care paraprofessional’s job.”

History and Lessons, pg. 1 and 33: “The combination of CHCA’s clearly stated social purpose and employee-owned structure has helped the company forge the related role as a “yardstick corporation”-a private company whose social mission is above reproach, whole economic achievements are respected and thus whose analysis is trusted by public regulatory agencies, health policy organizations, labor organizations and the media. CHCA’s high standards and innovative practices can therefore be used by these institutions to guide and measure their assessment of how the rest of the home care industry currently functions-and how the industry could function within a more supportive regulatory environment.”

RS: “ There’s always been a push and pull between what the market wanted of the organization so this organization could exist in the market…Cooperative Home Care was essentially structured against the grain of the existing market institutions…we worked really hard at maintaining our base and going out and trying to influence the core and at the same time in that process, the core was influencing us…but in order for Cooperative Home Care to exist and flourish, it needed to have that push-pull tension.”

Narrative 3: LC: “…a group that was doing similar stuff to what we’re doing, for example, a fair housing group from Columbus might know someone here at the Heights Community Congress

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(similar housing group) and in conversations, might learn about the Community Shares federation…and it usually means somebody expresses an interest…then NCRP would come into the community and start asking questions and trying to find out who does similar kind of stuff…the NCRP role was to form these new fundraising federations…anyway, at the end of the day, the interest had to come from within the community. There’s no way you can go into that community and start a Community Shares. Columbus for example…once they had a group of people that were interested in the whole idea, then we got involved…”

Organizational expansion into new markets, diversifying products and services to meet the needs of communities and the creation of parallel organizations to support and enhance the mission are consequences that contribute to the ultimate generative development of others.

Narrative 1: PS: “ We have to change and recognize who those people are so that we can be ready to provide them with what it is they need for us to be viable because we’ll only be viable as long as we offer a service that people are looking for.”

Transformation within the organization spans over three decades worth of acquisitions, affect on public policies, influence on the banking industry, global outreach, expansion, internal growth, organizational change and new directions for the future.

SM: During the era of expansion, Shorebank tried different models to expand and replicate themselves in other locations “which was exciting and interesting…I think that the continued focus on development has been a result of the holding company expanding and establishing operations in new locations and raising capital for doing development work.”

Narrative 2: PD: PHI has been designed to “carry the word…and quality care through quality jobs is something that I think all of us agree is the best way to move forward in reforming long- term care nationwide…and we’ll take every opportunity to move into new parts of the national scene as well.”

In due course, it is envisioned that PHI will take all the lessons learned from the Cooperative Home Care Network (including New York, Philadelphia, New Hampshire, Detroit and Arkansas and ICS) and begin to investigate opportunities in the country to either replicate in terms of bringing worker-ownership to the industry or start something completely different using those same principles and applying them elsewhere.

ME: “Right now we’re allowed to provide home health aides and nursing. We want to include occupational therapy, speech therapy and so on…” PD: “Rick wants to stand on principle that he’s going to serve the people who have the highest needs” and as a consequence, ICS was developed in response to his mirror-up vision.

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Narrative 3: Shares aspires to become as much a network for social change groups as a source of funding; they enlisted and funded Business Volunteers Unlimited (nonprofit entity that is a model for communities to engage in supporting nonprofit efforts) to conduct training for Executive Directors at member agencies. They hope to eventually develop enough operating support either through endowment or the development of a seed fund to help promote social change agents begin their own venture.

CB: “Democratic institutions are strengthened by the work of Community Shares…and we provide a network for those kind of groups that do that type of thing…foundations feel this is an important way to address the problems and not something to be afraid of…it’s helped to strengthen them as well.”

Narrative 4: KM: “…now we’ve grown so large, people want me to replicate… the more people you have in a new TC (therapeutic community) you need to send staff to help get it going, which takes away from what we do here …when getting staff, there’s lot of power involved in managing people, particularly at the bottom trenches. I’m tired of re-training people all the time and don’t have the resources for a training organization- it goes back to ‘Each One Teach One’- we need to have enough people to teach and train, and we don’t have this yet.”

Kevin envisions a metamorphosis in the making: JB: “ He has a master plan for it…he sees it, and I don’t think nobody else on the planet does, but he sees exactly where this is going and what this is going to be…that’s a door I’m ready to ride with…and whatever he’s envisioning, if it’s better than what it is right now, then man, you can’t lose…Kevin is a great man…he’s one of the very few people that I’ve ever met with such great dreams…his dream is to give other people back their dreams.”

In Brief

This study is explicating how four organizations have grown and developed over time prior to present issues of restructuring. Each organization as described in the narratives began as an amorphous compilation of ideas, people and vision; the realizations of inventing and experimenting have been primary drivers contributing to development. They have evolved beyond their initial scope of activities and due to an increase in size and complexity, a dialectic between becoming more structured and retaining the principles of a loosely organized environment has emerged.

Narrative 1: PS: “ I don’t think the organization is as standardized or as structured as it could be, yet it’s becoming more so recently. Right now, it’s still on the side of being entrepreneurial and

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lacks system, yet it’s moving in that continuum…the entrepreneurial spirit is becoming a little more systems driven so that it can get to the next level of growth.”

Narrative 4: KM: “ Part of our problem is that we’re so big and we have so many businesses… eventually we need to get outside teachers because of the internal turnover…we’re integrating the straight peoples with the staff because we have to-because we’re growing so fast…it’s not easy…we now have 28-30 staff for a $6 million business and now it’s about learning and developing it.”

The process of reorganizing internal operations to become more structured and centralized in order to remain efficient and effective will generate a next phase of inquiry in the future.

In Sum

It is important to note the constant interplay between these principles; they are interrelated and there is no causality nor linear relationship (Figure 2). The narratives have informed us that a cross-fertilization of certain themes can be located across

Figure 2 Interrelationship Between Guiding Principles

different phases and in varying

Intentionality degrees throughout the organizing

process. The Principle of

Intentionality as a fundamental Reinvention Values-led Governance agency of free will is the starting

point to actively engage in social

Unconventional Serendipity Wisdom change and remains a continuing

factor throughout the principles. In

due course, we are guided into the

Reverberation labyrinth of simultaneity amongst

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the Principles of Values-led Governance, Serendipity, Unconventional Wisdom and

Reinvention and eventually get spewed out into the Principle of Reverberation. The concept of becoming a model and sharing knowledge for others to create and respond should not be considered a final destination. Elements of reverberation exist throughout the entire organizing process, in fact as defined, it becomes a catalyst for others to co-join in the contribution of efforts to begin anew.

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CHAPTER 5 DISCUSSION: INSIGHTS INTO NOBLE ORGANIZING

This chapter will extend the concepts presented in the results section using organizational literature to support ideas expressed in the development of principles about social entrepreneurship (SE) to pose more possibilities and interconnectedness in approaching a theoretical understanding of noble organizing. Propositions are introduced that merge organizational theory with discoveries from the narratives. These propositions will add detail, flavor and newness to the principles and an attempt will be made to sharpen the dynamic interplay between principles and propositions (Table 13). How the principles connect and intersect with the propositions is an expanded theme that will help us understand the process through which noble organizing operates.

Introducing Propositions for Noble Organizing

Advancements in knowledge shaping the visions of the future incorporate a shift toward an interdependent global economy, hyper competition, emergent technologies, massive transformation in manufacturing capabilities and heightened volatility in the marketplace

(Daft, R. L. and Lewin, A. Y., 1993). In order for organizations to stay ahead of these changes, new paradigms are evolving challenging the norms and assumptions of the past. In organizational life, the social context becomes part of the new century’s movement toward building a global community, a heightened and dramatic approach towards environmental consciousness and the magnified awareness to promote human development. The underlying value principle driving these projections involves a belief in the nobility of the human spirit and its encompassing features.

“Whatever you can do, or dream you can do, begin it. Boldness has genius, power and magic in it.” - Goethe

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Table 13 Summary of Principles, Propositions and their Relationship Principles of SE Proposition(s) about Noble Organizing Intentionality 1 Noble intentions are an extension of past experiences supported by high passion for taking action in the interest of the common good. Thus, noble organizing is a process combining purpose and commitment in the service of others.

Values-led Governance 2 Shared beliefs about an ideal state of society provide guidance for developing a set of principles around business functions and social goals that ultimately govern noble organizing systems.

Serendipity 3 Noble organizing is catalyzed by a small group of persons that co-inspire courage and determination in each other.

4 Learning and discovering through unplanned actions and events promotes counterintuitive thinking that guides opportunistic behavior in noble organizing systems. Planning and action are simultaneous.

Unconventional Wisdom 5 Noble organizing invites members to take pragmatic approaches grounded in strategic long-term visions to achieve their business objectives and social goals.

6 Under-organizing systems promote experimentation and freedom of action in noble organizing processes due to an expansion of opportunities for testing new ideas. The explosion of innovation results in new designs and programs to further organizational activities.

Reinvention 7 By remaining adaptive and flexible to environmental stimulants, problems and hurdles become opportunities. Noble organizing is contingent on the organizational purpose, not practice. Members are required to reorganize and reinvent the organization by forging new instruments and generating new ways of approaching acts of service in response to the challenges of societal needs and development.

Reverberation 8 Noble organizing calls for sharing and exposing organizational practices, knowledge and experiences for others to learn, engage and respond. Inviting competition to advance social causes improves the likelihood that development output will be greater.

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The challenges of creating a new organization is the task of cultural change. Often, transforming mental models and images enable new realities to emerge and developing appropriate systems of shared meanings bestow courage enabling human beings to pursue the boldness of curiosity and spirit of perseverance to achieve the unimaginable. Action, imagination and ideas drive our theory building. Theories can provide a foundation from which to build and construct social systems enabling people “…to question their basic assumptions, to work out different suppositions, and to conceive and implement alternative modes of social action” (Wicker, p. 714). Realities are constructed through dialogue and meaning making processes, as such, there is no objective reality but rather interpretations which all hold validity (Gergen, 1991). From this lens, the concept of noble organizing will be further articulated by evaluating six principles emerging from the analysis section of this dissertation.

Principle of Intentionality

A core image illustrates the ultimate consciousness in human systems; cultivating and honoring life, nurturing the politic of differences towards achieving unity and fostering the belief in the potential of the human spirit. Man in contrast to things can be understood not only in their external manifestations (behaviors) but also in their underlying motivations

(Weber, 1978). Erich Fromm’s research on basic human needs led him to determine that modern society and ideologies mold the social character of individuals (Fromm, 1941). A heightened sense of awareness is made more conscious throughout a continuous integration cycle of cultural developments and societal relations. “The chances for positive (personal) growth depend not only on changes within the person and in his particular life circumstances but on more general changes within society” (Ryckman, 1996 p.164). The organizations depicted in this dissertation exemplify the relational transformation of self

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within the context of society. In narratives 3 and 4, there may exist a profound passion to

contribute to the development of others based on experiential learnings and societal

influences. “The purpose and direction (of organizational life) are products of unique history,

personal interactions and environmental circumstances.”(Smircich, 1983 p. 56).

Narrative 3: Community development was being funded through the federal government and grassroots neighborhood organizing groups were being de-funded because they were considered too radical for the conservative agenda. In response to this, community organizing groups evolved into community development corporations in order to gain access to the some of the monies available. The development of alternative funding sources through workplace campaign giving as an antidote to the difficulties at the time in raising funds for social justice and advocacy groups became a reality. These were people determined to achieve systemic institutional change in hopes of creating new equitable social structures in the community.

Narrative 4: Through Kevin’s learnings, experiences, knowledge, relationships and practice, TROSA has become what it is today and heavily influences what it will continue to become tomorrow. He learned the importance of helping others to care and survive, getting them off the streets and pointing them towards a better life.

KM: “ …the 12 years of training taught me not to quit. You have to get them (the residents) to believe, first. And they need hope. We need to give them hope-life is about being accountable and you need to learn to balance what to do…I learned to do it in a way that I could teach others the same.”

Erik Erikson contends that the ego functions to help individuals adapt constructively to challenges, as it has organizing capabilities to help people resolve inner conflicts while simultaneously dealing with difficulties presented by the environment (Erikson, 1963). From a cultural perspective, unique interpersonal and historical experiences contribute greatly to the varied developmental patterns of individuals through the process of socialization. His research focuses on the emergence of a strong ego identity as individuals continually resolve crises (turning points or discontinuities) inherent in the developmental process. The development of self, in turn, is in response to dealing with these critical points in life. In narratives 1 and 2, the desire to effect change was motivated by personal disappointing life

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experiences and the social conscience in effect, became the driving force to actively pursue a muted passion.

Narrative 1: MH: “ We created the bank based on having an outsider role. None of us (the founders) fit well within the existing system of things.”

Narrative 2: RS: “My vision was a result of lots of cumulative experience but also mostly negative experience that made me think about what I really wanted…and that drove me.”

The Principle of Intentionality depicts a willful choice to participate as an agent or catalyst for social change. Noble intentions as a prelude to process involves the maturation of self in giving one’s life toward a greater cause and consistently placing the development of others above one’s own personal fulfillment.

Proposition 1 Noble intentions are an extension of past experiences supported by high passion for taking action in the interest of the common good. Thus, noble organizing is a process combining purpose and commitment in the service of others.

Principle of Values-led Governance

The process of choice and decision can lead to a process for action. Values are formed via ethical and factual considerations; values are weighted and actions implemented (Simon,

1976). Translating noble intentions into social action entails a core commitment and commitments flow out of relationships. A mutuality of respect, approval, affirmation and friendships are integrated allowing individuals to both submit to and create a system and community (Lawrence Kohlberg in Kegan, 1989) that invites membership consistent with its direction. There is a transcendence of “affection toward something else, toward something that looks more like a human community, the community of all persons to which this man feels even more strongly compelled” (Kegan, p. 94). In narrative 2, social goals are established and the means to achieve them rest on the values for developing a community-

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based business environment. Rick was hired to manage the Center for Community

Economic Development and initially focused his efforts on refining the organizational directive.

Narrative 2: CHCA History and Lessons, p. 5: ‘During that first year, Rick helped clarify the Center’s purpose: to create for low-income people “good jobs”-jobs with adequate wages and benefits, decent working conditions, employment stability and opportunities for career advancement. Rick then chose worker-owned start-ups as the form within which to create those “good jobs.” He believed the worker-ownership structure would enable the business to maximize wages and benefits. He also believed it would encourage greater self-esteem and responsibility within the work force, and at the same time anchor the new businesses deeply within the local community.’

The organizations presented in the narratives embrace organizational and environmental inter-relations enabling collaborative actions to remain open, the generativity of exchange and discussion to remain constant and the promotion of shared ides and appreciation of concerns to facilitate the emergence of common, democratic values. Vision, values and possibilities act as reference point in guiding behavior, enabling greater forms of shared realities to evolve. In narrative 3, it was the dedication and commitment of people to the movement that continued to help the organization move forward. Each of the member agencies were decidedly in organic solidarity, stressing the importance of a collective conscience (Durkheim, 1933).

Narrative 3: RB: “…we are part of this rich center of this social change movement in Cleveland, and it is very representative of how things should be going on in other parts of the country…the members’ primary passions are their own agencies, and Shares is very instrumental for them. However, there is a sense of community that’s drawn from it, to the extent that they’re pursuing the social justice goals that we (GCCS) espouse.”

CB: “…the fact that we were a co-op made us depend on the wisdom and generosity of the member organizations to get Shares off the ground…”

Social existence is structured by human values. The co-creative aspect of noble

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organizing entails the creation of new, shared values whereby reality judgments are merged with judgments of values (Srivastva, Cooperrider et al., 1990). This process has promoted the discovery of collaboration fostering the creation of integrative visions; trust in a supportive environment evolves enabling a shared governance structure to emerge. In narrative 1, the founders of Shorebank believed they could accomplish a great deal in terms of community development for the communities they wished to serve; it was a passion they shared for racial equity and their faith that a bank would be the perfect tool to create neighborhood change. Their approach was more unconventional than traditional banks and their style was non-conforming.

Narrative 1: RT: “ They all came out of the left, were opportunistic in the best of senses and had a very special kind of package…”

RG: “It would be four of us talking and dreaming…we’d all been involved one way or the other in the civil rights movement and community action programs.”

MH: “We thought- should it be housing, credit unions, jobs, banking? We thought a bank- wow…we did a big study project and thought if you could intervene for minority small businesses and find a lot of demand and make good loans, what else could you do?”

Social realities are constructed through values, intentions, beliefs, ideals, cognitive symbolic and mental processes (Gergen, 1991), the evolution of which culminate in an array of choices and alternatives enabling these images to determine the nature of organizational actions. Realigning priorities around new issues, building community and tapping into common concerns to chart new ground (Lipman-Blumen, 1996) facilitate the translation of noble intentions into new substantive realities. The unified configuration of values, norms and behaviors are subject to the collective will of the organization (Weber, 1958) that promotes a consensus of values driving the organizational directives; positive ethical sanctions are aimed at maximizing the development of others.

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Narrative 2: ME: “What drives the organization is just trying to do better and just trying to make that job a better job for the home health aides. At the same time we are trying to create an environment within the organization that is a nice place to work and that the work we do is good…so we can all be proud of our successes.”

In narrative 4, TROSA is described as a community within a community. It is a mission- driven, visionary, pragmatic and active organization that is intent on saving lives and building a future for those who have lost faith.

Narrative 4: KM: “ The residents need to believe. They’re desperate. They feel grateful to be here after all the wrong they did in the world. Here, you need to learn how to care and residents feel it’s their last shot. We’re recycling people and treating a chronic problem of substance abusers by showing them how to fight the enemy in themselves.”

MK: “ The majority of the money that’s generated out of here just goes back into TROSA so we can keep accepting people free of charge and make it a better place for them to live in years to come.”

Members’ ethics and values drive the organizational directives. When noble intentionality is high, it transforms the nature of governance in a direction that allows inclusion of all voices and strengths in the organization. The organizational governance structure becomes more democratic for purposes of accessing all members’ experiences and knowledge in order to carry out noble tasks. Noble organizing processes increase the potential for creating governance structures that are paradoxically autonomous and cooperative, worker-owned and flat in terms of the power structure in contrast to traditional organizations where hierarchical structures dominate.

Proposition 2 Shared beliefs about an ideal state of society provide guidance for developing a set of principles around business functions and social goals that ultimately govern noble organizing systems.

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Principle of Serendipity

All human behavior is driven by relationships, the foundation of which is driven by

knowledge, experiment and activities that are serendipitous in nature. True evaluation and

organizational effectiveness transpire through the intimacy of relationships and cannot be

explained by measured and rational forms of behavior and output. Unwritten relationships

that exist between persons naturally promote cohesiveness in achieving a commonality or

purpose (Durkheim, 1965) and forming partnerships ultimately provide the basis for

establishing a community of competence (Srivastva & Cooperrider, 1987) that inspires

courage and determination to collectively introduce social action.

Narrative 1: It was fortuitous that Ron met Mary, Milton and Jim; neither one of them had banking experience but together they had vision and purpose.

Narrative 2: Rick began to try and differentiate the product, yet came up against the government health care reimbursement system; they refused to pay more for Cooperative Home Care Associates’ services in spite of the higher quality of care. He in turn took it upon himself to change the dynamics of the system.

RS: “Cooperative is like a gilded job shop…it’s similar to a craft place run by craftsmen, but it is the one that is seen as being the best-it’s the one everyone goes to for advice…and so we had people from all over the world come to us for advice but it didn’t get us a premium price. We were being treated as a nice ambassador of a commodity product and it made me nuts…”

Narrative 3: A group of individuals who shared a common interest in social justice came together to discover ideas for creating alternative sources of funding.

Narrative 4: A group of social and criminal justice people and local volunteers assembled to develop an alternative long-term rehabilitation program for substance abusers.

Proposition 3 Noble organizing is catalyzed by a small group of persons that co-inspire courage and determination in each other.

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Organizations exist as systems of shared meanings and are sustained through various processes (Smircich, 1983). Inter-subjective negotiation enables organizational members to reach an agreement on promoting realities through the combined efforts of interactions and experiences that often lead to opportunistic behavior. The formation of new processes emerge in the midst of persevering, envisioning and acting upon alternate ways of survival that can often steer initiatives onto new and unexpected dimensions. A realignment of priorities emanating from counterintuitive thinking creates unconventional approaches to action; responsibilities are nurtured through the collective mind and members grow, adapt and develop in response to the challenges.

Narrative 1: RG: “Milton, Mary and I then Jim wanted to use a significant portion of those profits to grow the program or to reinvest it and expand it and do what we could with it…other colleagues felt that those excess profits belonged to the rest of the corporation and the shareholders…it was the philosophical difference of opinion that probably united the four of us to really start thinking about ways to get out of that situation and to create a situation in which we would not be dependent on that ever happening again…”

Narrative 2: RS: “We’re not going to take over the industry through regular market forces and we don’t want to…so I pushed for unionization of the industry…everybody thought we were really nuts…”

Proposition 4 Learning and discovering through unplanned actions and events promotes counterintuitive thinking that guides opportunistic behavior in noble organizing systems. Planning and action are simultaneous.

Principle of Unconventional Wisdom

Human beings have needs that must be satisfied in a quest for full growth and development

(Maslow, 1998). Intrinsic motivations in organizational life can become fully realized when organizations incorporating socio-technical qualities of job designs (operating structures, technologies and related tasks combined with human resources) (Trist, 1979) create conditions for personal growth that simultaneously support organizational objectives.

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Through leadership, the organizations presented in the narratives have evolved into organic structures that foster authenticity, providing a true and noble sense of ownership that produce a sense of fulfillment and a level of trust, commitment and devotion towards accomplishing social goals. Diversified roles have created a system of rotating membership amongst colleagues capable of responding effectively to the internal and external demands of most any situation; it has inspired and encouraged them to become resourceful and innovative in experimenting with different ways of approaching development objectives.

The progression toward homeostatic and self-regulating systems has produced regenerative capacities within the social context; members learn the requisite skills and acquire knowledge to represent the whole generating excitement, enthusiasm and vigor to spark the ideal membership situation.

Narrative 1: PS: “ Both in terms of the tools we use but also in the approach we take using them…one of the great things about being here is that you learn just about everything about lending…and you end up doing everything almost yourself…so by the time you leave, you know the ins and outs of this business…and that allows you to be very good at it.”

LR: “ I may not have the big idea but I can connect the dots and then I can help mobilize people for the changes to happen…I’ve been able to perpetually take on new projects hand them over to people and watch others grow them better than I ever could…it’s the perfect place for me!”

Narrative 2: SS: “When a bunch of other special assignments come up whether it’s working with our different affiliates, fundraising or grant writing, anyone of us get involved even if we’re working on something entirely different.”

Narrative 3: Shares began executing multiple campaigns, managing money, building databases and other hard business functions more efficaciously to support the organization. They began developing cleverly around organizational functions which has continued to increase their effectiveness today.

The effectiveness of an organization relies on achieving a balance between strategies, structures and the commitment and needs of organizational members and the community.

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Viewing organizational wisdom as a sensemaking response (Srivastva and Cooperrider, 1998) stimulates a reflexive task of evaluation preceding action. Unconventional wisdom, however, entails firstly a commitment for action grounded in strategic long-term vision and a reflexive response or evaluation that follows. Because the needs and realities of society are in perpetual motion, visions, values and possibilities act as a reference point in guiding behavior. This type of unconventional yet highly pragmatic approach to social concerns is due to the resourcefulness and extraordinary wisdom of its organizational members.

Narrative 1: BN: . “ In order to do good in the community and do development we’ve got to make money which was one level. Then it evolved to creating the perfect tension between development and profitability which was talked about for many years. Now where we are is talking about a perfect marriage between development and profitability.”

PS: “ There is definitely an inculcation of market discipline that leads to a future viability of not only the organization but the communities we serve…it’s not short-term. I think it is a very grounded and strategic long-term vision of how to effect the sort of change that we’re committed to…bottom line, the better we are at doing business, the better we are at making a difference in our communities…it’s not compromising how we do business. It’s being better in the business in order to do what we want to do.”

Narrative 2: Cooperative Home Care Associates has made huge inroads in achieving their social goals and business objectives, challenging the system at times and adapting to the realities of the market when necessary. In the process, they have been affected as much by the environment as it has influenced industry standards.

Narrative 3: TH: “Shares embodies the hope that we need to go away because we aren’t needed anymore- we have empowered and tackled these major issues…the endgame is on the road to going out of business…”

Narrative 4: KM: “ … it’s about economics and survival. These two things go together. You can be a good person but speaking it only isn’t going to change things-you don’t just wait for it, you need to take action.”

To have an image and commit oneself at whatever lengths to pursue that image in spite of everyday realities and obstacles is the foundation of the Principle of Unconventional

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Wisdom. It is guided by pragmatism and a sense of conviction to effect social change in ways possible yet never thought probable.

Proposition 5 Noble organizing invites members to take pragmatic approaches grounded in strategic long- term visions to achieve their business objectives and social goals.

“Ambivalence, disorder and diversity are better strategies for organizational survival than clarity of purpose, order and uniformity…the advantages…are that more and more variable, versions of reality are maintained within the organization” (Wicker, 1980 p.716). In a highly structured environment, rigidity often limits the imagination. Embracing ambiguity and uncertainty in organizational life maintains a constant fluidity that creates a system-less system by instilling ongoing changing realities (Weick, 1979). Evolution is continuous and therefore self-generative transformation occurs that creates more potential for new ideals to emerge and shared meanings to develop. Under-organizing provides for individual freedom, innovation and creativity that emanates from a decrease in restrictive perspectives. Social action then becomes a process of collective idea creations that contribute to advancing long- term objectives for society’s well-being.

The narratives emphasize that under-organizing is most apparent in the organizational creation and development phases.

Narrative 1: LF: “ We are about profitability. We are about good credit. We believe you can do both things and also serve communities and give people opportunities and access that they hadn’t had before…some people understand it in theory but when it comes to the difference in approving a loan, it can be more difficult…this lends itself to Shorebank employees being more creative, innovative and yet still remain disciplined.”

Narrative 2: CHCA History & Lessons, p. 6-7: “The CSS team’s only real path was to take an existing low- wage business and begin to change it…they therefore decided in their planning not to be

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constricted by current industry norms, deciding instead to work toward long-range improvements within the industry. To loosen the regulatory and payment factors that constrained the fashioning of decent jobs was essential to achieving the social goals in their own home care venture.”

Narrative 3: TH: “You do an annual fundraising to your members. You get a government grant. You get foundation grants… this enables us to increase our ability to provide services and we’re really only accountable to the organization, the board and our members as opposed to some third party out there.”

Narrative 4: KM: “…we didn’t have any rules in place for the residents, so we made them up as we went…”

Proposition 6 Under-organizing systems promote experimentation and freedom of action in noble organizing processes due to an expansion of opportunities for testing new ideas. The explosion of innovation results in new designs and programs to further organizational activities.

Principle of Reinvention

Human behavior is a function of persons within the context of the environment (Lewin,

1947). Contingency theories stipulate the need for organizations to continuously adapt to its environment (Kast & Rosenzweig, 1972); this adaptation and acculturation is critical to organizational survival. The capacities to remain open and flexible to possibilities for invention and re-invention, organizing and re-organizing, framing and re-framing enable organizations to flourish in response to the challenges of societal needs and development.

Organizational transformation of tasks, approaches, management forms, technologies and human resources become inevitable. The organizations presented in the narratives have remained in a state of interaction and interdependence within the environment that has helped shape industry standards, promoted industry growth and contributed to the development of others. As a consequence, members get motivated to re-design and re-focus strategies in order to preserve and enhance the vision, resulting in powerful and creative new

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methods for accomplishing their social goals.

Narrative 1: Through credit and investment by and large, Shorebank has contributed to revitalizing communities by improving housing and employment opportunities, providing loans to small-business owners, creating commercial development and addressing other needs and social concerns in underserved communities. Issues and problems are constantly changing and Shorebank has responded successfully. They have developed non-profit entities to address community needs and real-estate development companies to jump-start activities in neighborhoods. They grow with their customers and borrowers and are working towards becoming a customer-focused institution externally as well as inter-organizationally.

PS: “ We have to change and recognize who those people are so that we can be ready to provide them with what it is they need for us to be viable because we’ll only be viable as long as we offer a service that people are looking for.”

Currently, they are exploring more opportunities to do lending in tandem with daycare providers and faith-based institutions, both of which are effectively capable of making a dramatic impact on the communities they serve.

Narrative 2: Market forces, government regulations and societal changes are primary external factors effecting Cooperative Home Care Associates. Reimbursement and public financing issues became the primary delimiting factor controlling their abilities to restructure wages and benefits. Paraprofessional Healthcare Institute was created in response to the limitations of what CHCA could accomplish in their mission to create high quality jobs and ICS was developed primarily to source their business.

PD: “We are not always the ones waiting to be shaped by the marketplace but also work to shape the marketplace.”

Narrative 3: Greater Cleveland Community Shares moved toward a consensus type of management structure.

TH: “…we realized this was an additive process and not in opposition to.”

Narrative 4: The growth of the organization has necessitated transforming the infrastructure in order to keep up with its own evolution.

KM: “ Part of our problem is that we’re so big and we have so many businesses…eventually we need to get outside teachers because of the internal turnover…how to balance internally and externally is the key. We’re learning different ways of doing shit. We’re integrating the straight peoples with the staff because we have to-because we’re growing so fast…”

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Because the power of intentionality is so potent, noble organizing as a process invites radical and necessary adaptation and flexibility. Organizational members often fight the normal tendencies for bureaucratic controls because noble tasks, purpose and intentions supercede inertia. Intentions translate into commitment and action in the sake of serving the development of others.

Proposition 7 By remaining adaptive and flexible to environmental stimulants, problems and hurdles become opportunities. Noble organizing is contingent on the organizational purpose, not practice. Members are required to reorganize and reinvent the organization by forging new instruments and generating new ways of approaching acts of service in response to the challenges of societal needs and development.

“Organizations are continuously constructed, sustained and changed by actors’ definitions of the situation” (Astley, Van de Ven, 1983 p. 248). Each organizational history depict a unique blend of values, assumptions and knowledge that has enhanced their collective experiences.

There has been constant interaction and exchange internally within the organizations and externally through invisible boundaries of the environment. These organizations have monitored changes with respect to the demands of the external environment and through trial and error, ultimately transforming themselves in response to the needs of the marketplace and communities. A continuous process of reflection combined with information exchange has created opportunities to question whether learning to learn will enhance the chances of organizational survival that ultimately impact society.

Organizational learning through a double-loop learning process has been important for the sustainability of the organizations as presented in the narratives.

Governing variables (the creation of affiliate organizations, expansion, increased member agencies and workplace sites, a greater number of residents and/or hiring from outside)

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incite social action (contributing to the development of others) promoting both positive and negative consequences (stimulating growth in communities, closing operations and/or financial constraints) becomes cyclical in nature (Argyris, 1982). Learning to learn loops back to the framing or re-framing of the governing variables. Morgan (1997) simplifies a 3

½ step double-loop learning process which is very much alive at the organizations under study:

The process of sensing, scanning and monitoring the environment 1. The comparison of this information against operating norms 2a. The process of questioning whether operating norms are appropriate, and 3. The process of initiating appropriate action

Each organization has been able to create and re-construct ways of pursuing the mission by evaluating a multiplicity of perspectives while retaining their values and core technologies.

By exploring, differentiating, processing, organizing and intellectualizing (Boulding’s Scale of

Systems Complexity, Ashmos and Huber, 1987), natural processing capacities for creating new forms of managing and innovative techniques have emerged to meet the challenges and demands of the communities and environment for the future.

Principle of Reverberation

Knowledge is essential to understanding the world. Human beings live knowledge through and with others making ourselves consequential to the development of others, as exemplified by the organizations under study. By sharing experiences and knowledge, these organizations have impacted communities and spawned and/or solidly influenced industries.

This exchangeability has encouraged dialogue and creation, generating free will and prompting more freedom of choice. “Individuals are capable of undertaking remarkable change when made aware of choices before them” (Pasmore & Khalsa, p.549, 1993). On a social level through to an institutional level, the sharing and dissemination of knowledge by

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these organizations has enabled others to tap into common concerns and underlying values,

eventually leading to mobilizing social action. Shorebank is participating in micro-enterprise

development projects on a global basis. Paraprofessional Healthcare Institute under the

umbrella of Cooperative Home Care Associates has developed a clearinghouse of

information on direct-care workers to disseminate knowledge and share best practices on

recruitment and training within the industry. Greater Cleveland Community Shares has

become a catalyst for other Ohio groups to join in the pursuit of social justice. TROSA is

considering partnerships to create replication sites in other locations.

Noble organizing invites competition by using the power of market mechanisms to advance

noble causes. Anticipation governs human behavior (Simon, 1976); alternate behaviors and

unanticipated consequences ensue. Knowledge is discovering the consequences of those

behaviors that stimulate action.

Narrative 1: BW: “ It was this idea that we’re learning something. We’ve been doing this now for a few years and let’s start figuring out how to share some of that information in an organized kind of way…”

BW: “ When it got hard for the bank to find individuals willing to invest (in the neighborhood) because things around them were so bad, having a big player (Shorebank) tackling some of the worst of it creates a sense for individuals to say, ‘Oh look. Here’s an opportunity. Things are happening. Things are changing. Maybe it’s worth my getting involved and maybe it’s worth my investing. Maybe it’s worth my staying here and taking care of my house instead of trying to figure out how I can get out.”

Narrative 2: Replication sites in Boston, Philadelphia, New Hampshire, Detroit and Arkansas have spawned from Cooperative Home Care Associates; the primary intent was to more broadly disseminate their unique model throughout the home care industry.

SS: “The whole thought about quality jobs-quality care gains traction throughout the long- term care industry nationwide via our three core areas including practice with our affiliates, consulting relationships and disseminating information.”

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Narrative 3: LC: “What would generally happen is that some organization in these other communities would learn about us, some grassroots social justice group… they started inviting us to help them get started…and we shared with them how we do things and that’s the role we’d play.”

Narrative 4: Kevin wants to help to replicate TROSA elsewhere and is searching for a way to balance the many issues at play. He has thought long and hard about how to do so and has come up with alternatives. He believes it should be run by graduate staff members in combination with residents, yet have ‘straight’ people do the teaching.

KM: “ Willpower=Policy+Procedures; set out some policies and procedures and you only need 40-50 residents- enough to make money and not too much disorganization, so it would be run like a franchise. For example, Fayetville (the county) would flip the bill for the residents and they would be taught a work ethic-they can rise up in position and go begin another franchise. The in-kind wouldn’t be that big, but you could have a modular house setting which is cheap, quick and would fit lots of people. It’s a fast set up, pre-fabbed and put together at the site-this wouldn’t be reinventing the wheel. They (‘straight’ people) could come to our school to learn to teach, and the literacy part could be provided by colleges and volunteers.”

The more knowledge people have, the less division between them because knowledge

becomes a shared resource; a principle of shared meaning and understanding through

interaction and reciprocity. Building on the education of learning facilitates the

dissemination of knowledge that becomes a catalyst in connecting others to co-join in

pursuit of social change. If more persons become engaged in promoting social action, the

reverberating effects on development will strengthen and transpire.

Proposition 8 Noble organizing calls for sharing and exposing organizational practices, knowledge and experiences for others to learn, engage and respond. Inviting competition to advance social causes improves the likelihood that development output will be greater.

In Summary

How do for-profit and nonprofit organizations manage to be opportunistic, pragmatic,

profitable, values-based and noble? By reviewing the narratives in this dissertation, we can

now challenge organizing as we know it today. Social entrepreneurship entities can be

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considered the most appropriate vehicle to understand the concept of noble organizing; these organizations are practical, creative, entrepreneurial, destined and determined to positively affect the social condition.

Hybrid organizations such as Shorebank Corporation and Cooperative Home Care

Associates are explicitly managed as businesses for the sake of service in its commitment to developing communities. Greater Cleveland Community Shares and TROSA are nonprofit entities that employ a business approach in its mission to serve the development of others.

The language of a business discipline is rooted in each of these organizations, for example,

“…the inculcation of market forces…”, “…building databases and other hard business functions…”, “…its about economics…” and “… we work to shape the marketplace…”; in effect, each of these organizations harness the discipline of markets for advancing a social purpose. The language of business as described by organizational members in the narratives is entwined with a social process. The narratives approach this public lexicon as a way of understanding organizational consequences and actions that are connected to organizational goals of providing a service. By expanding on a commitment to the fundamental process of developing others, the language of economics and business offer ways of communicating with others to join in conversation. A posteriori, language used as public lexicon becomes a service of the social process. This helps implore a universalistic concept of noble organizing that can be adopted in any type of organizational entity.

Cultivating cooperative endeavors and inviting competition is far more powerful in accomplishing that service rendered for its own sake. By relying on the ingenuity of its members, social entrepreneurship forms, processes and visions become a shared resource

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that helps generate and stimulate others to compete and engage in the process of social change. They believe in pure market mechanisms more so than conventional companies who wish to eliminate competition. Intentionality is a driving force in everything these organizations do. If the intention is to improve a piece of society and if markets are good for society, does it not make sense to increase competition? If intentions are high and markets are good, why spoil the market? Noble organizing systems want to help nurture and lift up competitors, realizing that noble intentions and causes will be advanced by harnessing the power of market disciplines.

Social entrepreneurship members are highly pragmatic as opposed to ideological in their approach toward accomplishing a dual mission of development output and profitability.

These organizations are visionary and knowledgeable about how to implement visions that correspond with possibilities. Under-organizing has enabled these organizations to develop alternative interpretations of achieving business objectives in tandem with realizing social goals. Innovations and learnings have fostered creativity and imagination that parallels the dynamism of the environment. By generating new ways of approaching acts of service, the courage and determination to collectively organize around advancing a social purpose takes on new meaning. The concept of noble organizing as expressed through social entrepreneurship gives birth to a new generation of organizational forms that are effective, functional and designed for serving the common good.

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CHAPTER 6 CONCLUSION

This chapter is an effort to conclude and respond to the main areas of inquiry in this dissertation. The term noble is defined and altered in its usage as a verb qualifier in conjunction with the concept of organizing, a process focusing on conduct in the service of others that are founded on the basis of goodness and expressed through actions. In the development of narratives, we learn about the values and factors that give life to four social entrepreneurship organizations in their commitment to developing human communities. By conducting an in-depth analysis of the narratives, six guiding principles of social entrepreneurship emerge and through this lens, we gain insight into their organizing processes which form the basis for extricating the concept of noble organizing. The interrelationship of principles with propositions generated under the auspices of organizational theorizing guide us to approaching a theoretical understanding of noble organizing that provide implications for further inquiry.

Noble Organizing

Noble organizing is a process combining noble intentions to do social good with a business- like purpose and the translation of those intentions into sustainable organizing actions that boldly synchronize with reaction leading to transformations toward a higher value for members in society. At its base there exists a core image, commitment, task and output. A core image relates to the betterment of human communities. Noble organizing begins by embracing the spirit of passion and purpose. A willful choice to actively participate as an agent or catalyst for social change leads to the development of a shared ground.

Establishing an organization to serve the development of others becomes a primary core commitment. By combining values and vision, members’ ethics become the engine driving

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organizational directives. The core task of organizing commitment around achieving the image entails having wisdom to proceed with a vision and recognizing the need to adapt accordingly. Development is having the courage to experiment and innovate in unknown territory when collectively organizing around the high purpose of contributing to the human spirit. Transformation captures the power of perseverance; being committed and resourceful in taking pragmatic approaches to social concerns result in new ways of approaching acts of service. The core output converges on consequences resulting from the intended course of action. Reorganizing has the strength of creativity. By remaining adaptive and flexible, organizational learning by reflection guides reinvention for the future. Generative capacities provide for a legacy of societal well-being. Sharing and exchanging knowledge and information will support and encourage other organizations to do similar activities, improving the likelihood that more communities will be positively affected for generations to come.

Contributions to Organizational Theory and/or Practice

By generating examples, the largest contribution this dissertation can make is to inspire more people to become actively engaged in the social change process. The reasons to think about a higher level of organizing will create positive directions for humankind. In this study, we gain an in-depth understanding of the multidimensional organizing processes of four social entrepreneurship organizations. In doing this, a number of similarities and differences were unearthed. “There are different ways of arriving at a given end state…allows the achievement of specific results from different starting points with different resources in different ways.”

(Morgan, 1997, p. 47). This leads to the assumption that organizing processes are unique to each organization and thus, by engaging in a humanistic model of organizing, all types of

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organizations are capable of joining in this effort. The advantages of noble organizing implore theoretical variation of the concept broadening a theory’s applicability to different instances in any given organization.

How does this analysis open up new ways of enquiring into the field of organizational behavior? The development of narratives through co-inquiry illustrate organizational historicity and living phenomenon of social processes that provide a descriptive and explanatory lens to investigate the context of social settings that mirror organizational realities. By collaborating with organizational members, the inquirer is able to authenticate what is heard and reported in order to capture existence and transform it into a social context that is representative of their actions. Similar to a longitudinal study, it provides us with insights into the underlying principles and values of organizational life rather than just a snapshot.

The challenges of organizational theory respond to issues that lead to organizational research. We need to focus more on organizing processes that contribute to a larger cause for human society. We need more inquiry based on the creation of innovative organizations with a social purpose; to date, there is very little information available in management literature. If we study the organizing processes of social change organizations from a design perspective, we can gain insight into the development of new organizational forms which have at its base, underlying ideologies and values. By evaluating the organizing principles of social enterprise organizations, businesses can become engaged in the processes of the transforming nature and impact on society. More inquiry dedicated to the kinds of lessons

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businesses can learn from social enterprise and vice versa in order for both to successfully engage in its mission while simultaneously contributing to societal advancement is required.

Organizational sciences is calling for more research in the field of positive organizational scholarship (Cameron et al., 2003) which is moving into new domains of inquiry that are exciting and forward-thinking. Rather than deficiency based models, the field is moving toward utopian and virtuous forms of organizing. By lifting up the term noble, we can add to the discussion by bringing in the concept of noble organizing. The concept of being noble has a paradoxical quality to it filled with incredible resolve, will and humanity yet higher level qualities are subsumed in the term itself. Nobility is humility. The more we get into the word, it captures its own essence. The need to study noble organizing and its qualities will contribute to other streams that are building a framework in this field of study.

Implications for Further Inquiry

The appreciation of paradox exists as a creative dichotomy for the organizations presented in the narratives; the contemporary challenges involve embracing paradox in a way that enables future possibilities and social action. Presently, the organizations are undergoing a metamorphosis that requires more structure, rules and regulations incorporated into its systems. We need to develop a second generation of inquiry into these organizations from the transformation phase onto the next level of growth in order to gain insight and add value to the existing concept of noble organizing.

The development of principles and propositions to approach a theoretical understanding of noble organizing provides implications for further inquiry. The guiding principles as

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presented in this study can pertain to many other types of organizations that are also entrepreneurial and innovative such as socially responsible companies, dot-coms and large technology giants. What makes noble organizing special to social entrepreneurship organizations? What are its permutations? Conducting a comparative analysis across multi- organizational sectors and industries to investigate its distinguishing characteristics will invite new models of organizing in the future.

I invite all different kinds of scholars and practitioners in organizational life to join me in the exploration of noble organizing processes in hopes of collectively promoting its ideas such that all types of organizations can benefit in the service of others.

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