Saturday, November 11, 2006

Whole lotta shakups goin' on

Two of the biggest, best-known non-profits in the world have launched major reorganizations: the American Red Cross and the Girl Scouts.

The Red Cross shakeup is in response to a series of missteps and criticism in recent years, most famously related to the 9/11 attacks and then Hurricane Katrina. Basically they are adopting what most non-profit people would recognize as a normal structure at the top, with a self-recruiting policymaking board of directors which hires a CEO to run the place. The Red Cross has since 1947 had a 50-person board largely chosen by state chapters which tried to directly run the organization; different board members had different titles, operational decisions were made by committees, and not surprisingly three CEOs have resigned since 1999. No doubt the current highly-democratic structure will be missed by the state and local chapters, but it just wasn't plausible for running what is now a $4 billion/year operation with 35,000 employees deployed in hundreds of local offices.

Girl Scouts of the USA, meanwhile, has announced a huge internal consolidation: 312 local councils will be consolidated into 109 over the next three years. In some places as many as seven current councils, each with their own local boards and staffs, will be combined into a single new one. The primary motivation here is simple efficiency; local councils are naturally worried about how many camps might end up getting closed, staff positions eliminated, and so forth. What the organization hopes to gain isn't just reduced administrative costs but new ability to modernize their program nationwide.

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