November 8, 2006: A Blustery Day

Winnie the Pooh would comment on a day like today. Heavy rain and very blowing wind. As I was waiting for my car to be brought around this morning I watched people walking up the sidewalk having their umbrellas turned inside out from the wind. This is the first heavy rain that I have seen in Newark.

Last night we went out to Mompou in the Ironbound as soon as Dominica and Susan arrived in Newark. We actually all arrived within a few minutes of each other with Dominica and Susan actually meeting on the street at the light in front of our building. We decided to drive down to the Ironbound as it was starting to rain and expected to rain all evening.

Dinner at Mompou was really good as always. That place is awesome.

We got back to the apartment and Dominica and I pretty much went straight to bed. Early night for us.

Today we all made it out fairly early. I was going to go get breakfast but it was raining so hard that I decided against it. Not worth getting all wet over.

Today an article was printed by the BBC where Christian Aid, a British non-profit, where the person choosing operating systems there claimed that Windows was cheaper than Linux because when you use Linux you have to purchase expensive support options. Now I don’t want to go into why this guy doesn’t have the technical expertise to make any such claim or how he doesn’t have the purchasing expertise to even know that this is totally untrue nor do I want to make any claims as to the total cost of ownership comparison between Linux and Windows but what I do want to do is talk about the actual problem here. The real problem is that non-profits are often guilty of hiring incompetent support staff that are not able to do their own jobs and often pay for other companies to do their own jobs. In this case a systems administrator needs his operating system company to hold his hand and is willing to spend donated dollars instead of taking the time to learn his own job. This is tantamount to theft of Church dollars! This is a person who is effectively stealing from British and Irish churches. He is giving money that are given in the hopes that they will help starving children to Microsoft or to other support companies because he doesn’t so the job himself or hire people who are qualified to do the job. And as we all know there are tons of out of work technology professionals who would love to save that non-profit hundreds of thousands of dollars.

But the problem with non-profits is that they are not driven by profits which in and of itself is fine. In fact it is awesome. People driven by the higher good of doing good things for others. Except that the individuals within non-profits are still paid and often driven by their pay. So now you have a bunch of people out to make as much money as possible from a business that is not designed to be efficient since that is not its driving force. The non-profit doesn’t pay outrageous salaries to top performers. So this administrator who is in questionable standing here won’t likely make a nice six figure salary even if he is worth millions to the business in cost savings. He will eek out the same meager living whether he is competent or not and the business just hopes that he will do the right thing because they are a non-profit. So, since his life can’t improve by being good at what he does (and likely he would not have taken that job if he was good at what he does) he can only improve his life by doing less for the same money. How does he do that? In this case by buying expensive software that does a lot of his job for him or by buying expensive and traditionally unnecessary support contracts so that there is someone else to do the hard work while he sits in the comfy office doing, well, less than he could be.

This is assuming that this person is simply lazy or less than competent but still, sort of, ethical. Is taking money that has been donated to feed starving children and passing it off to Microsoft or Red Hat or SUN ethical when you could feed children by doing the job entrusted to you? I will let you decide. But in many cases unethical non-profit workers will get kick backs by having a support organization do all of the work for them. Work that is often paid for too much for and covers a lot of redundant ground. I have seen this first hand – presumably. Non-profits turning down free professional services in order to pay outrageous fees to non-technical workers who “know the right people”. There is no cost justification needed. Non-profits don’t work that way. The whole concept of the non-profit is the buddy system.

Are their ethical people working hard in non-profits doing great things to help mankind? Of course there are. But the system is so dysfunctional that much of their hard work is lost. I am sure that many hard working Christian Aid volunteers would be pretty upset to discover that their “corporate office” was paying software companies huge sums of money while their were volunteering their time and lives. Is there an answer to this dilemma? I believe that there is.

The for-profit corporate world works very, very hard to be good and producing results fast, cheap and efficiently. This is what makes one company do better than another. They know how to motivate employees, how to get maximum results and how to be profitable. Non-profits needs to reinvent themselves to utilize this miracle of modern productivity. They might be able to do this, in some cases, by implementing standard business practices internally but often this is not possible given the nature of their “business”. So what to do? I believe that non-profits should farm out the bulk of their internal infrastructure to for-profit entities that can do the same work better and for less. Let’s look at an example.

Food4Kids is a fictitious international non-profit striving to feed children around the globe. They physically ship food to regions where they operate small kitchens that feed children that come in to get meals. They need a lot of infrastructure. No one would expect them to operate their own farms so that piece is obviously outsourced to existing farmers. But there is more. Their shipping and logistics operation getting food from farms and into the central warehouse shouldn’t be done internally but through a logistics outsourcer who is fast, efficient and can leverage scale with many other customers to lower cost and increase expertise. The human resources functions should be outsources. Food4Kids doesn’t want to be experts at HR, they want to feed kids. So people who are good at HR should do that. The information technology department is the obvious example. Outsource it to a professional IT firm that can provide exceptional value and a good price. A good IT partner can dramatically decrease the cost and increase the efficiency of almost any piece of a business. This is a critical piece to outsource. Food4Kids will need to operate their own carefully chosen and managed “outsource management” team who selects and interfaces with the outsourcers. These people will have to be very carefully chosen and meticulously managed but they should be very few in number. In theory a non-profit would require very few of their own employees. Perhaps Food4Kids should not outsource their “in the field” operations but this is a small number of specialty workers. This means that Food4Kids might be the expert in the area of “in the field” children’s food kitchens – something that they can strive to be good at. And the volunteers should be direct through Food4Kids as volunteers can really only be managed by non-profits.

What we end up with in the end is a lean, efficient non-profit that still drives the majority of its work force through traditional pay and career incentives which have always shown to be the most successful means of saving money. This means that people are motivated to do the wrong thing and rewarded for helping people instead of rewarding them for the most damage that they can cause without drawing too much attention to themselves.

Sorry that I had to go on that tirade but big media publishing articles like that really makes me upset when media is making money off of glorifying a person who is doing the wrong thing and hurting people. Or at least doing things for the wrong reasons. I have spoken to people who work at non-profits before and they have expressed their disgust with people who use high level non-profit jobs as a form of welfare since non-profits will seldom fire people who are incompetent (often because the people who would fire them know nothing about business and don’t know that they are losing money) and those people are motivated to do as little as possible to make up for the inability to get raises. It is really about a breach in the trust that those people have from the people who donate to those non-profits.

I got stuck in the office later tonight than I had hoped. I was half past six when I finally got to leave. But tomorrow I am working from home so I get a chance to work in my pajamas and maybe, just maybe, I will actually get a chance to make the fifty-first episode of the SGL Podcast. Hopefully…

One thought on “November 8, 2006: A Blustery Day”

  1. [Ed. – Steven attempted to comment directly on the page but we had an error and the comment did not get posted. He emailed me and this is a copy of the email that he sent to me.]

    I tried leaving a post on your blog entry about our use of MSoft
    technology at Christian Aid. Either WordPress didn’t like me or you’re
    moderating the comments. Hoping it’s the former, I thought I’d drop you
    a line.

    It seems many in the OSS community have read the BBC news article which
    was a vastly compressed version of the radio programme. We do take an
    increasingly pro-MSoft stance at Christian Aid which I will try to
    explain, but that doesn’t mean we are anti-open source. I think too
    often the argument is presented as a binary yes / no approach – you are
    either for OSS and against M$… or on the dark side 😉

    If you listen to the radio programme, we’re making a number of points.
    The first and most obvious one is that organisations choose the
    applications and operating environment that best suit core business
    needs. We use MS on the desktop and for a number of enterprise
    applications, but we – currently – use Linux and Plone for some of our
    web applications.

    In choosing the best route, a number of factors have to be taken into
    account. Price is an important one and the preferential pricing
    charities recieve from Microsoft and others does have a huge impact.
    Perhaps more important though is cost of ownership – technical staff
    capable of developing and maintaining open source applications are more
    expensive for us to hire than, say, support staff with MS skills. This
    route means that we do not have to employ and maintain a large IT staff.

    Then there is the opportunity cost of open source development. Remember
    this radio programme was actually about the software staff are using in
    the field rather than the server environment at Christian Aid. Why
    develop something over several months when configuring off the shelf
    software can achieve the desired result in weeks or months? The MS
    SharePoint system at Christian Aid was configured, disaster tested and
    live for 500+ staff within three months. Compare that to a small Plone
    project which took the best part of a year for us and the benefits are
    obvious.

    You go on to say that as a non-profit we are unconcerned with profit and
    are spending donations unwisely. Quite the contrary – profit is
    everything for us. I’m interested in maximising the difference between
    costs and income – so that we can grant as much as possible to projects
    that assist the most vulnerable in society. Only 1% of our income is
    spent on administration.

    Of course, it is not just about cost. Key to all of this is helping
    Christian Aid staff to have decision support systems that make a
    tangible difference to their work. In the event of a major disaster,
    we’re able to have a team site (a collaboration area for all involved in
    responding to that emergency) live, configured and populated with all
    the necessary information within 1 hour of the disaster being called.
    For me, that’s more interesting that what platform we’ve used to do
    that.

    As for outsourcing, we do outsource in a very dramatic way – Christian
    Aid is a grant giving organisation that works with grassroots
    organisations in over 50 countries. We also outsource software support
    where it is appropriate to do so.

    Incompetent? Well it’s the first time that has been levelled at me.
    Maybe it’ll happen more as a result of this programme. Whatever, I can
    tell you that (like a number of my colleagues) I came from the
    commercial sector, work at least 12 hour days and put every ounce of
    what I do into helping Christian Aid achieve what it does. There are no
    comfy offices here and certainly no hangers-on.

    I could go on, and no doubt you will find holes in what I’ve said.
    Nevertheless, if you do ever find yourself with half an hour to spend in
    London – do get in touch. We’d love to show you an organisation and set
    of people that are somewhat different to the picture you have painted in
    your blog.

    All the best – Steven

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