May 2, 2011

Connecticut Maps Path to Nonprofit Sustainability – With a Few, Deep Potholes

Bridgespan Partner Daniel Stid discusses Connecticut's "Commission on Nonprofit Health and Human Services" legislation and wonders if the state will manage to follow through on the recommendations proposed.

By: Daniel Stid

Last fall I was skeptical but nonetheless intrigued when I learned that the Connecticut state legislature had passed a special act establishing a “Commission on Nonprofit Health and Human Services” and charged it with taking stock of how state agencies were contracting with nonprofits for service delivery. I was skeptical because these exercises are often episodes in passing the buck and/or avoiding blame. I was intrigued because the remit and make up of this commission—leaders from the relevant state agencies and the nonprofit provider community—appeared to bode well for its impact.

I have just digested the Commission’s report, put forward on March 31 of this year, and I have to say I am favorably impressed. If every state in the country could replicate what the Nutmeg state has just done, and manage to follow through on the recommendations (not a sure thing for CT, as we will see below), it would drive a great deal of efficiency into our system for funding and delivering human services and, at the same time, increase the sustainability of the nonprofits doing most of the delivery.

Perhaps one of the most powerful aspects of the Commission’s report was the set of “guiding principles” it articulated at the outset, which are worth reflecting here in their entirety insofar as they could serve as a model for other efforts:

  • “That the work of the Commission strengthen the public/private partnerships in the delivery of health and human services;

  • That quality and effectiveness of services are predicated upon a viable and sustainable nonprofit sector;

  • That program and/or funding changes result in maintained or overall improved client outcomes;

  • That the pursuit of efficiency and streamlining processes is a mutual goal of both purchasers and service providers;

  • That commission recommendations and future program design be supported by reliable data and analysis; and

  • That services need to be client and community focused, and based on current best practice models.”

Another important aspect of the report was the specificity of the recommendations—49 in all—that could be grouped into three buckets: streamlining contracting, decreasing system costs, and identifying topics important areas for “further study, data collection and analysis.”

With respect to “funding and/or programmatic changes geared toward creating a more sustainable delivery-system,” the two big opportunities identified were to shift more services from state to nonprofit delivery in order to take advantage of significantly lower labor costs (given far less unionization among the nonprofits’ workforce) and to change where possible from institutional to community-based programs.

Though I was struck by the seriousness and comprehensiveness of this report, I came away with three niggling misgivings:

  • The report held up the opportunity to lower system costs by relying more on nonprofit providers. But it also called upon state agencies to fund and provide incentives to nonprofits so that they could in turn provide increased pay, health care, and retirement benefits to enable them to “recruit and retain a qualified workforce.” And it offered these ideas after noting a significant caveat: “the state’s current fiscal situation may preclude action.” This is one place where the Commission appears to want to have its cake and eat it too!

  • The sharp focus on efficiency and sustainability did not appear to be balanced with an emphasis on outcomes and results. There was a bit of a hand wave at this with one of the 49 recommendations – “encourage [state agencies], in consultation with nonprofit providers, to establish a uniform method to measure and audit program results (e.g., Results-Based Accountability)” – but it comes across as superficial alongside the depth of the other discussions.

  • There is so much richness here that I would like to see some prioritization of the recommendations and accompanying legislative, regulatory, administrative, and research agendas. Before getting into the detailed recommendations the report calls for “an ongoing body, similar to this Commission” to be established, which could presumably help with the triage and sequencing and drive the overall agenda forward. In the absence of such a group one wonders how much of this substantive body of work will actually get done.

But in the broad scheme of things we have to salute what Connecticut has done. Do any observers closer to the scene have challenges or reinforcements to my take? For those of you in other states, what would be the possibility and potential of this occurring where you are?

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