CEO Corner: Nancy Wackstein, UNH

New York Nonprofit Media sat down with Nancy Wackstein, Executive Director of United Neighborhood Houses, an association of 38 settlement houses and community centers and a leading voice in nonprofit advocacy on the city and state level.

NYN: Welcome to New York Nonprofit Media. I’m here in the CEO Corner with Nancy Wackstein, who is the Executive Director of United Neighborhood Houses – 38 houses all over New York City. You have been Executive Director since 2002 and are stepping down in the next few months. This is a great time to have you here to reflect on your time with UNH and also your expansive career in the nonprofit world and the government side of things here in New York. Maybe we could start with an overview of what UNH does. 

NW: Thanks, Jeff. Since I am leaving before the end of the year I can be brutally honest. United Neighborhood Houses is the association of 38 settlement houses and community centers. These are multi-service, community-based nonprofits serving multiple generations. We used to say from cradle to grave, meaning from very young people in preschool to very old people and everybody in between. Our agencies are in general pretty well known in their communities – places like Henry Street Settlement, Union Settlement, Project Hospitality, and Cypress Hills. These are organizations that are firmly rooted in their communities. I think I will get into trouble by naming some and not all of them. 

It has been a real privilege for me to lead this association because I know how important the work is and how hard the job of leading these organizations is. For 11 years before I was at UNH, I was the Executive Director of one of the agencies, Lenox Hill Neighborhood House on the Upper East Side. So I have extraordinary respect for the job these agencies do in their communities and how difficult it is. These are organizations that are funded typically through a combination of city, state, sometimes federal contracts, private fundraising, and sometimes earned income. Putting all those pieces together to have a functioning organization is really hard. Working on behalf of the government is not always easy, because there are lots of accountability requirements, regulatory requirements, fiscal requirements, and reporting requirements. Sometimes you wonder if the government really is your partner, or is your terrible overseer. But we forge ahead and try to make that partnership with the government – particularly the city and state government for us – a meaningful, productive, and true partnership. I can tell you it is a challenge. 

NYN: What insight have you taken from your time, having served in a couple of different mayoral administrations, and reflecting on that specific challenge? I would also love to get your thoughts about the philanthropy and foundation side of the nonprofit world. It’s a very interesting interaction between these three actors in this space. 

NW: Starting with the philanthropic sector, I think that also is a very challenging relationship. First of all, you have funders and donors who have their point of view. They are the controlling party in most interactions, so there is a power differential between funders and the nonprofits who are supplicants. I think the foundation community typically likes to call us partners, and talks about investments in nonprofit work. But it is not always equal. If you talk to our executive directors, the thing that they would say they need the most is general operating support and unrestricted funding, which is very hard to get. Most philanthropic organizations have particular guidelines and priorities, so you often on the nonprofit side have to really pretzel yourself into meeting this year’s priority. Like with ice cream flavors, there are fads in funding. In your quest to sustain your organization, you fit yourself into what this year’s priorities are. I do not think that is the right way to do business and to support essential social services. We are not talking here about supporting fluff. We are talking about essential services like childcare, afterschool, and senior care. I often think there’s something wrong with this picture. Either the government, through its contracting, should support 100% of the cost of providing these services, or the philanthropic sector should make up for what the government does not do. And that does not happen. 

I am concerned about the nonprofit business model, frankly. I am not sure about how cultural groups and environmental groups fall out on this, but I can talk about social service groups. There is a real challenge in making it work, especially if you want to be multi-service and meet the needs of your neighborhood – which are constantly changing – you need flexible funding. Government funding is not flexible and typically philanthropic funding is not flexible, so that is why so many of us have these big dinner dances and galas. That is where your flexible money comes from. If you look in the New York Times Style Section, as I guess City & State does not have a style section yet, you see these endless black tie dinners. Why do people have those? Because they need flexible money to support fixing the elevator, paying Con Ed, and the non-sexy things. It is easier to find a donor who wants to fund an early childhood classroom with cute little children, but it is harder to find a donor who wants to pay the Con Ed bill. 

NYN: Going along those lines, how much of your organization’s time and resources would you say are devoted to measuring outcomes, jumping through all the regulatory hoops, and also meeting all the requirements of funders, both on the government and the philanthropy side?

NW: We ourselves at United Neighborhood Houses don’t operate with government contracts. We do a lot of advocacy and policy work related to city and state government, so we, as a policy, do not accept government contracts. Plus we do not want to compete with our members. So the question probably is more aptly directed to the direct service providers, the agencies in the communities, and I would say they spend a lot of time on compliance issues and regulatory compliance. Let’s say you are an agency and you are 90% supported by government contracts. Each of those government contracts has its own fiscal audit, its own program audit, and its own monthly reporting. So there is a lot of work involved in making our multi-service model work. I have to say that, in the Bloomberg administration, then Deputy Mayor Linda Gibbs paid a lot of attention to trying to streamline the contracting process for human services and nonprofits. She came up with the Health and Human Services Accelerator, which was to create more of a central data vault so that you would not have to each year, for each contract, submit your audit, submit your board of directors list, and submit your VENDEX. And so I think there has been some progress made. It is not a streamlined system. I mean this is 2015 and you can use your cellphone to do pretty much anything, but you cannot use your cellphone to submit documents to the city government when you are a contractor. I heard a story the other day where the executive director of one of our agencies in the Bronx had to go down and sign a contract in person. That of course was half of a day, which I was stunned by. I said, “can’t you send an electronic signature?” No, you have to go down there. Another one of our agencies told me that they had ten different contracts with one of the city agencies, and for each one they were required to submit the same set of documents. That doesn’t make sense in this digital age. So I am hoping that city and state government will continue to look at this. I know that state government is trying to streamline contracting. It is a significant cost of doing business. 

On the philanthropic side as well, there are high transaction costs. If you get a $10,000 grant from a foundation, you typically have to do a six-month report, and an end-of-the-year report and proposal. It is a lot of transaction to get these grants. I do not want to sound like an ingrate about it, but it is hard to keep one of these agencies going. As I said at first, I am a big admirer of people who run nonprofit organizations, because it is a really complicated job. One of the things I bristle at most is when people in the corporate world come and tell us what we should be doing and how we should be doing it. Well, you know, we are actually doing a better job than they are with fewer resources. We do not have up-to-date technology and we cannot buy the latest human resources packages, but we manage to do it. And we do not typically have Enron and Tyco imploding. We have had a few, but not as much as the corporate world. I always say we should export our knowledge to the corporate world. Maybe they could do as well as we do. 

NYN: It seems like another systemic problem in terms of the overall business model of trying to keep a nonprofit afloat is the struggle of the unfunded mandates. I would love to get your thoughts about that concept generally and why it needs revisiting from various levels of government. I was just reading about another piece of legislation that passed that mandates a workplace violence prevention program for any nonprofit that gets 50% or more of its funding from the government, though this program is not funded by the government. It seems like these costs continue to add up. 

NW: Right, which is why a lot of nonprofits have to supplement their government contracts through private fundraising. Unequivocally, I would say that government should pay 100% of the cost. One of the really disturbing trends over the last several years has been that if you applied for government funding – I will use the Administration for Children’s Services’ Early Learn Program, which is the childcare program for very young children, as an example – there was a private match requirement, where you had to put in I think 6.7% of the overall cost. Why is that? The common response to that is if you have a contract with the city to paint a bridge, does the city ask you to put in a private match? I do not think any contractor in the world is going to step up for that deal. Now maybe it is our fault because we do step up for those deals. But I would say it is an equivalent issue. Why should there be a private match requirement to do a government-funded program? Either you want a quality program, or you don’t. 

It also helps create the Tale of Two Cities in the nonprofit sector. I have said this to city officials. Mayor de Blasio ran on a Tale of Two Cities platform, and in the nonprofit world we have a Tale of Two Cities as well. The small agency in East New York cannot raise the kind of money that an agency on the Upper West Side or the Upper East Side of Manhattan can. It is really a problem because many of the neediest neighborhoods in the city – East New York, Brownsville, places in the South Bronx – are served by agencies that do not have the ability to raise huge amounts of money, like some of the other Manhattan-based agencies can. So the poorest people end up with the poorest services, which perpetuates that kind of inequality. Without question, I think the city needs to fund 100% of contracts. When they ask us to install new technology in order to report to them, they should pay for that. They should pay for essential administrative costs. You know, we pay health insurance for employees. We are employers; we are not just do-gooders, we are employers and we want to treat our employees fairly. So when healthcare costs go up 10% every year, which they had been, the city should cover that. That’s not some decision you make because it is a nice thing to do; it is an essential thing to do. The partnership between nonprofits and government needs to be rethought and equalized a bit. 

NYN: As a final question, reflecting on your time as a leader at UNH for 13 years, what has your leadership philosophy been, with all the various agencies under your leadership, and also what are your thoughts on the transition in leadership?

NW: Running a membership association is a little different than running your own agency. On my office door I have a New Yorker cartoon of President Obama herding cats, because to some extent running a membership organization is like herding cats. But I think the most important thing is relationships. You can go to Barnes & Noble or any bookstore and see shelves and shelves of books on leadership. For me, it boils down to respectful relationships with people, doing what you say you are going to do, and building trust. I guess that is the way I have managed my own staff over the years. It is hard to quantify, but I would say that at least 75% of management is building relationships of trust. 

You can call me old-fashioned, and that is why I am leaving, and letting all these new-fangled managers come on in and try something different. I think the transition is good. Look, I am part of a wave. I am 63 years old. I am a baby boomer. There are a lot of us who got into this business trying to make the world a better place back in the 1970s. We were that era of wanting to change the world, and I think a lot of us did do our best and ended up running a lot of these organizations. There is an exodus going on, as we’ve had several retirements from our small system in the last couple of years. I think seven or eight people in their sixties left. It is great that there is a whole new cadre of people. Yesterday, I went down to one of our agencies and met with their new executive director, who is in his mid-forties – so impressive. They are going to introduce some new ideas and some new energy into this business, which is fabulous. We did our bit, and I want to take my accumulated wisdom and experience and still work to help younger people do this. I am going to go to Hunter School of Social Work and try to help mold the next generation. But I think it is really a positive for the nonprofit field that we are going to have an infusion of new leaders, who will bring new ideas and new energy. I always think it is a mistake when old leaders hang around, lurking in the shadows. I am going to go off and continue to care about UNH and settlement houses for the rest of my life – it is in my heart.