2012 Budget May Reflect President Obama’s Attempt to Reconcile His Nonprofit Sector History

The debate on the 2012 budget and the President’s own history with the nonprofit sector gave me a better understanding as to why the President might have made some of his decisions.

I have been watching the national discussion and debate around President Obama’s 2012 budget. I could have predicted that the nonprofit sector would be scarcely discussed, but the language coming from the left surprised me. Starting with the Huffington Post’s “Obama’s Budget Pits Him Against His Own Life Story”, there emerged a number of articles expressing perplexity at how the President could cut certain programs after spending so much time working on behalf of low-income people. Some even inferred that the present had taken a traitor-like stand against the poor. Understanding the budget as a political document, this debate and the President’s own history with the nonprofit sector gave me a better understanding as to why the President might have made some of his decisions.

I believe this discussion must start with a look at President Obama’s history in the nonprofit sector. According to his biography, after his graduation from Columbia and a brief stint in the corporate world, the President spent the several years working in the nonprofit sector. His work with the Developing Communities Project and with Illinois Project Vote focused on helping the low-income community. Programs included (per his CV) “job training programs for the unemployed, college prep programs for low-income students, parent initiatives to reform public schools, and campaigns to clean up hazardous waste sites.” When he went to Harvard Law School, he left his last job in the nonprofit sector (not including his stint as a senior lecturer at University of Chicago), and his understanding of the sector may have shifted over the next several years. That shift is apparent as we look at his 2012 budget.

Later, when Mr. Obama returned to Chicago from law school, he worked in the legal world and then transitioned to his successful career as an elected official. During this phase, he also began his life with Michelle, who early in their relationship was a successful executive director of the Chicago-branch Public Allies, one of the nation’s pioneers in the public service and social innovation movement. Right before he obtained his first elected position, he served on a couple of influential, Chicago-based foundation boards, involving himself in grant-making decisions related to organizations working on education reform and job training for low-income workers. With these positions and through his relationship with his wife, President Obama may have begun seeing the nonprofit sector in a different light.

His first relationship with the nonprofit sector was one of direct service and advocacy for the low-income community. As a community organizer and voter rights advocate, President Obama probably had a deep understanding of the programs that his 2012 budget proposes cutting. Many of the people he served probably received energy assistance through Low Income Energy Assistance Program (LIHEAP) or obtained help from Community Action Agencies that received Community Service Block Grant (CSBG) funding.  These important groups are working in church basements and lifting soup ladles; they’re the people Northwestern professors Jody Kretzman and John McKnight refer to when they talk about “Building the Community from the Inside Out”. (I base my ongoing “Third Sector Grit” articles here in the Stanford Social Innovation Review blog on these groups.) You could call this President Obama’s first nonprofit life.

As Mr. Obama moved away from directly serving these programs, he began to view the sector more broadly. This would be Mr. Obama’s second nonprofit life. Whether thinking about these issues from a philanthropic viewpoint or experiencing his wife’s work with Public Allies, we can assume he developed an affinity with social innovation or entrepreneurship-type groups. As we look at the current Social Innovation Fund or the people that make up the White House Council for Community Solutions, this crowd is comprised mostly of people who speak of innovation, measurable impact, social entrepreneurship, and scale.

I feel my perspective comes from having similar experiences. Though I’ve never met the President, I do feel somewhat of a kinship with his nonprofit path. I spent the early part of my career working in poor communities and engaged with many of the programs that may be affected by the new budget. I was actually trained as a community organizer in the same training program that he was. As I moved through my career, I found myself working on a broader level, immersed in social innovation organizations and philanthropies in these same areas. I can say that I often do not see much mingling between these two groups. They use different acronyms and attend different conferences. Looking at this dynamic, I see President Obama’s handiwork outlined in this budget.

As we have seen in the structures of grant programs like Social Investment Forum (SIF), Promise Neighborhoods, i3, Race to the Top, and others, President Obama has been identifying efforts that work, and then scaling them to new areas. Ezra Klein of the Washington Post might have said it best: “…a lot of the money feeding old programs…will be weaned off of so-called ‘formula’ funding, where money is given out according to preset rules, and moved to various forms of competitive funding, where the money is given out based on how much high-quality evidence you can provide that your intervention works…” As we understand Obama’s nonprofit “lives”, it’s clear that not only is his second nonprofit life trumping his first in his 2012 budget, but that in fact President Obama is trying to bring together, or merge, the two.

The best example in this is in the CSBG proposal, where the Community Services Block Grant program would go from $700 million to $350 million, where the remaining funding would be open to Community Action Agencies and other nonprofits that would compete for the funding. As Rick Cohen noted in the Nonprofit Quarterly, there have been “…complaints about how impossible it is to defund poor performing community action agencies and lack of real reporting requirements in the CSBG statute”. 

The challenge in merging these two worlds is that traditional groups may not be able to compete. The language of President Obama’s second nonprofit life dominates this new area, and now traditional groups have to learn a new language while fighting for existence.  As we look at this new landscape of SIFs and i3s, very few of President Obama’s first nonprofit life groups are represented. There was limited exposure to this new world before; now, the 2012 budget is introducing these groups at a feverish pace. Here’s to a hopeful, effective marriage.

Read more stories by John Brothers.

Tracker Pixel for Entry


  • Chris Sieber's avatar

    BY Chris Sieber

    ON February 18, 2011 04:48 PM

    I think this analysis is psychologically astute. But like the President’s imagined experience, it buys into several prevalent misconceptions which are interesting, in part, because they are apparently so seductive.
    The first is a false dichotomy. At least in my experience, many “traditional groups” as defined here are not static, not limited to the delivery of direct services, and certainly not strangers to rigorous measurement and new ideas. I work in a Community Action Agency and part of my job is building bridges to social enterprise and start-up thinkers; my staff compiles outcomes data on the impacts of all programs we run, analyzes effectiveness, and has a mandate to create new models, seeking effective ideas wherever we can find them. I am confident of our ability to compete, but that does not mean I would prefer to see our nation’s investments in the lives of poor people become one more crabs-in-a-barrel struggle for shrinking discretionary grants.
    The second untested idea here is that somehow “new” groups can create meaningful change without the kind of infrastructure and scope that “old” groups have built. To refer again to personal experience, my organization has—again and again—served as an incubator for new models, and disseminated them through a neighborhood-level framework built with that “old” money. It seems to me a viable strategy for field-testing ideas and moving them to scale.
    Finally, there seems to be a notion abroad that “old” social services providers offer only concrete “crisis services” (LIHEAP, food pantries, et cetera) and that there is some necessary antagonism between this work and the programs on a “broader level” which are seen as displacing them. It’s pretty clear in theory, as well as in practice, that a flexible, responsive system of “opportunity services” involves three elements at the level of families—crisis reduction, human investment and asset-building—as well as complementary efforts on the levels of community and policy. How real opportunity for poor families and neighborhoods can be built without this degree of complexity escapes me.  This complexity requires not only that there be a “marriage” of two approaches, but that one element of effective poverty policy not set itself up in opposition to the others.
    I think there is an opportunity for tremendously fruitful dialogue here—one which really would expand opportunity—but the impulse toward over-simplifying the nature of the change needed worries me.
    Thanks for the thoughtful provocation, in any case!

  • The quote from my NPQ article about complaints about defunding poor performing CAPs and the lack of CSBG outcome measures comes from two places—the justification of the CSBG cut in the federal budget and OMB Director Jacob Lew’s commentary explaining it in a New York Times op-ed. I suspect if defunding poor performers were the criterion for determining which federal programs to continue or cut, there would be a vigorous national debate, and CSBG would hardly be the headline program.  One of my articles pointed that out in comparing the CSBG cut (50%) with the proposed CDBG cut (7.5%) in President Obama’s FY2012 budget.  The issue of social innovation or social entrepreneurship versus these “older” programs (or older nonprofit implementers) is sort of a false issue.  The question of the cuts is the question of the prioritization of anti-poverty work in the federal budget.  The energy and enthusiasm, despite protestations to the contrary, behind the CSBG cuts compared to other opportunities for cutting which clearly were bypassed in favor of more powerful constituencies just rub me wrong.  Budget-making and budget-cutting is a political process, and the interests and voices of the poor have been revealed in the FY2012 budget as needing attention and bolstering in the federal budget-making scrum.

  • BY John Brothers

    ON February 19, 2011 10:24 AM

    First, having Rick comment on my post is a huge honor.  I read your work with a passion. 

    In regard to anti-poverty cuts, I commented on the Lew NYT article a week earlier in my SSIR post that Lew discussed pretty heavily the issues of impact in CSBG and the community action groups mentioned in the State of the Union.  Community Action leaders throughout the country and I had a pretty fruitful debate. OMB has been concentrated pretty heavily in the last year on the issue of high-impact and scalable ideas.  That weighs closely to the Obama’s second nonprofit life, so I am not sure I agree with you that it is such a false issue.  I think it closely relates to the work of we are seeing in the world of social innovation and that “marketplace”.  I think it is entirely important to 1) understand how the language of this world is now injecting itself into the traditional anti-poverty discussion at the federal level and 2) how does the anti-poverty movement shift itself to adapt to this world, which as I said might be difficult to do, considering that many of these efforts were created and grown behind the great anti-poverty work developed in the late-60s.  Lew described these efforts as ineffective and came to those conclusions using the frame of what we are seeing in SIF, i3, etc.  As a beneficiary and having worked closely for a longtime with CSBG related groups, I hope and want them to make this shift.

    With that said, and seeing the House legislation dropped this morning, one side of the political spectrum is missing any of this discussion with any real understanding of this arena.  I am sure that will drive some of our thoughts and discussions next week.  Look forward to seeing your thoughts on this in the weeks to come.  I hope I will be able to post a response on NQ.

Leave a Comment


Please enter the word you see in the image below:


SSIR reserves the right to remove comments it deems offensive or inappropriate.

The Power of Simple

By Lisa Benenson 1

How the Natural Resources Defense Council effectively unearthed and reframed compelling research to raise public awareness and effect policy change around food waste.