I'm taking some time off right now to do a Master's degree through Harvard Extension, and I'm also taking multiple classes through Coursera, EdX, Kennedy School ExecEd, UC Irvine, etc. Everything from educational policy & leadership to quantitative research & data analysis to non-profit management & financial accounting. This blog is a place for me to collect my learnings from this adventure I'm on! Most of the time, I'll just be cutting and pasting from various assignments or papers to be able to easily reference them later, but sometimes I'll do specific blog posts knitting my thoughts together from the different coursework. :-)

Thursday, October 9, 2014

Nonprofit Management - Paper #1 - Accountabilty n Early Educaton Nonprofits

We often think of education as beginning when we start school, but children are learning long before kindergarten. And unfortunately some children, especially those from low income or minority families, are learning much less in those early years than other children with greater resources. Looking at readiness skills upon entering school, Zill & West (2001) found that only 44% of at-risk children could identify letters of the alphabet, as compared to 75% of the children without risk factors. And only 38% of at-risk kids could count beyond ten, as compared to 68% of no-risk kids. Educators may hope that their teaching will reduce this achievement gap, but unfortunately evidence shows that the gap stays the same or even widens during the school years (Duncan & Magnuson, 2011). Thankfully now more focus is being put on early education with President Obama calling for Universal Preschool (The White House, 2013). But there has often been a gap between what the market would support (many low-income families don't have the money or don't see the value in early education) and what the government was funding (previously public funds were targeted more toward K-12 education). The non-profit sector has a long history of filling this gap and promoting early initiatives, but are they operating effectively and what results have actually been achieved?

The early education non-profit arena contains many types of organizations. Some social welfare organizations are more focused on advocacy and information, such as Zero to Three, which has an annual budget of over $19 million, was launched in 1977, and focuses only on early care for ages zero to three years old (Fact Sheet, 2014). Some of these research and dissemination organizations are more membership-based, such as the National Association for the Education of Young Children (NAEYC), which was founded in the 1920's and has several membership tiers for early childhood professionals but also puts out significant print and online resources available to the public (History of NAEYC, 2004). Private foundations also contribute heavily to early education and universal preschool, including the Pew Charitable Trust, the Packard Foundation, and the Joyce Foundation (Klein, 2004). And perhaps most importantly are all of the non-profits that work directly with the young children and their families. These include many smaller organizations that just serve their local communities – church-based preschools, day cares that are run for low income families, etc – as well as many larger organizations that work regionally or nationally. For example, Jumpstart for Young Children, a non-profit started in 1994 now with locations on the East Coast, West Coast, and the Midwest, trains college students to deliver an early literacy curriculum in low-income preschools (Grossman, 2010). With all of these different non-profits working on early education, what sort of accountability measures are in place to make sure that they're actually making a difference for young children?

One basic aspect of non-profit accountability is in making sure that the organizations are not misusing the resources that they have been entrusted with. Finances and governance are regulated through requirements of the law, such as the IRS, and through transparency, such as charity rating websites (Worth, 2014, p. 129). Zero to Three has just a short, one-page graphic annual report for 2013 on their website, providing some transparency to their activities and financials (Annual Report Zero to Three, 2013), while NAEYC provides a much longer and more in-depth annual report with significant transparency about both the good and the bad happening in the organization. The 2013 report cites taking steps to 'right-size' the organization and reduce its annual deficit, such as eliminating departments, creating in-kind partnerships, and cutting other costs (Annual Report NAEYC, 2013). Even with these steps, NAEYC still had about $2 million more in expenses than revenue, which they clearly show in their annual report. Jumpstart, on the other hand, glosses over negative financial information in their 2013 annual report. They only show increases in revenues from all sources - government funding, foundations, private donors, and corporations – while redirecting people to see their financial statements for more info (Annual Report Jumpstart, 2013). However, the financial statements show that their expenses have also increased greatly, such that the bottom line for 2013 is even more negative than it was in 2012 and that their net assets are significantly reduced (Form 990 Jumpstart, 2013). These annual report documents are not used so much to report numbers for compliance, but rather as a bit of transparency and a lot of marketing to current and prospective funders, full of pictures of cute children engaged in educational activities and inspirational quotes from volunteers and clients.

While the annual reports look at the nonprofits perhaps through rose-colored glasses, the outside watchdogs give a somewhat more unbiased view. Interestingly, while Zero to Three is the least forthcoming on their own website with only the brief graphic report and no financial statements or Form 990's, the organization is actually highly rated with four stars on Charity Navigator and a silver rating on Guidestar (Charity Navigator & Guidestar Zero to Three, 2014). While NAEYC is very open and transparent with finances in the one most recent annual report available on their website, they do not participate in the Guidestar Exchange and they are not rated on Charity Navigator – perhaps because they are more a membership-driven organization that derives its income mostly from selling services and products, rather than from grants or donations (Guidestar NAEYC, 2014). Jumpstart has a bronze rating on Guidestar and shows a three star rating on Charity Navigator, although the star rating may need to be updated as Charity Navigator lists Jumpstart as not having audited financials or Form 990's on their website when they actually do, at least currently (Charity Navigator & Guidestar Jumpstart, 2014). Jumpstart may have been 'pushed' to be more transparent with their financial information on their website because of the lower star rating on Charity Navigator last year. Between the information from the rating websites and the information provided by the non-profits, all of these early education organizations are fairly transparent about their finances and governance, at least to anyone who goes looking for the information – although the one to two million dollar annual deficits they're all currently running is perhaps more cause for concern than the organizations are sharing.

Finances and governance are only part of the accountability picture – the other big issue is performance and mission impact. Even if the money is being handled properly, are the organizations actually changing lives with that money? Many nonprofits find it easier to report outputs, rather than outcomes, especially for early education where the benefits might not be seen for 10-20 years. Zero to Three talks of training 15,000 early childhood professionals and welcoming 1.8 million unique visitors to their website (Annual Report Zero to Three, 2013). NAEYC speaks of the nearly 2000 participants at their National Institute and nearly 7000 accredited programs (Annual Report NAEYC, 2013). Like the advocacy & information nonprofits, Jumpstart mentions outputs – 4300 volunteers trained that year, 600 classrooms, etc – but they also talk about the research studies done on their programs and how they're changing their practices because of these impact evaluations (Annual Report Jumpstart, 2013). Aaron Lieberman, the original founder of Jumpstart, said that “a culture of performance measurement was put in place early at Jumpstart and it's been evolving since” (Grossman, 2010). This Harvard Business School case study on Jumpstart included multiple observation and feedback forms, site management and monitoring tools, and their balanced scorecard showing not just increasing revenues and enrollments but also statistically significant gains on subscales measuring school readiness, placing social impact above financial as recommended in Kaplan's 2001 article. Jumpstart has continued their commitment to evaluation, and was named an Exemplar Program by The Center for High Impact Philanthropy, citing studies showing that “the average gain for Jumpstart students was more than two and a half times as large as the comparison group” (Center for High Impact Philanthropy, 2014). A non-profit organization working directly with the population they're trying to help, as opposed to advocating or disseminating information, will be better able to see the immediate effect they're having, which is part of why Zero to Three and NAEYC are only able to report on outputs, not specific outcomes.

The research shows that early education is extremely important for children's future achievement, and many non-profits are advocating for, informing about, and working with the young kids, including Zero to Three, NAEYC, and Jumpstart. These three organizations are all fairly transparent in their finances and governance, although their budget deficits are concerning. They all also provide measures of their performance, mostly in terms of outputs and immediate outcomes. How well they are impacting the long term futures of the children is perhaps a question too big to be answered.


References

Annual Report, Jumpstart. (2013). Retrieved from

Annual Report, NAEYC. (2013). Retrieved from http://www.naeyc.org/files/naeyc/annualreport2013.pdf

Annual Report, Zero to Three. (2013). Retrieved from http://www.zerotothree.org/about- us/2013-annual-report.html

Center for High Impact Philanthropy. (2014). Report on Jumpstart. Retrieved from http://www.jstart.org/sites/default/files/Scribbles/high-impact-philanthropy-article- February-2014.pdf

Charity Navigator, Jumpstart. (2014). Retrieved from www.charitynavigator.org/index.cfm? bay=search.summary&orgid=4885#.VDbwUBZzCSpc

Duncan, G. J., & Magnuson, K. (2011). The Nature and Impact of Early Achievement Skills, Attention Skills, and Behavior Problems, in Duncan & Murnane (eds.), Whither Opportunity: Rising Inequality, Schools, and Children's Life Chances, pp. 47-69. Retrieved from http://sites.uci.edu/gduncan/files/2013/06/Duncan-Magnuson-including- web-appendix-0321121.pdf

Fact Sheet, Zero to Three (2014). Retrieved October 8, 2014, from http://www.zerotothree.org/about-us/zero-to-thees-fact-sheet.html


Grossman, A.S. (2010). Jumpstart, A Culture of Performance Measurement and Management. Case Study. Boston, MA: Harvard Business School Publishing.


Guidestar, Zero to Three. (2014). Retrieved from http://www.guidestar.org/organizations/

History of NAEYC. (2004). Retrieved October 8, 2014, from https://oldweb.naeyc.org/about/history.asp

Kaplan, R.S. (2001). Strategic Performance Measurement and Management in Nonprofit Organizations. NonProfit Management and Leadership, 11(3). Jossey-Bass.

Klein, L. (2004). Private Foundations and the Move Toward Universal Preschool. The Evaluation Exchange, 10(2). Retrieved from http://www.hfrp.org/evaluation/the- evaluation-exchange/issue-archive/early-childhood-programs-and-evaluation/private- foundations-and-the-move-toward-universal-preschool

Ritchie, S. J., & Bates, T. C. (2013). Enduring Links From Childhood Mathematics and Reading Achievement to Adult Socioeconomic Status. Psychological Science 24(5). Retrieved from http://pss.sagepub.com/content/early/2013/05/02/0956797612466268

The White House. (2013). Fact Sheet President Obama’s Plan for Early Education for all Americans. Retrieved from http://www.whitehouse.gov/the-press-office/2013/02/13/
Worth, M.J. (2014). Nonprofit Management, Principles and Practice. Third Edition. Thousand Oaks, CA: Sage Publications.

Zill, N. & West, J. (2001). Entering Kindergarten: A Portrait of American Children When They Begin School: Findings from The Condition of Education 2000. U.S. Department of Education, National Center for Education Statistics, NCES 2001–035. Retrieved from http://nces.ed.gov/pubs2001/2001035.pdf
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