Building Bridges - The TANGO Blog

TANGO’s mission is to build bridges between the nonprofit sector and the business sector. The mission is based on the belief that the interests of the sectors are capable of being aligned, and that communities do better when their interests are aligned.

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An alignment of interests is not the same as a merger of interests. Each sector is responsible for different tasks within a community, both sets of tasks are necessary conditions for community stability, and each sector should be allowed to perform the tasks for which it is best suited without undue interference from the other.

However, recognizing the equally important role each sector plays in the community, the sectors should support each other, and doing this will require a bridge over which information, ideas, problems, solutions, and goals are exchanged freely in both directions.

The principles upon which the bridge will be built are the TANGO Founding Principles appearing at the beginning of our textbook, The TANGO Nonprofit Method.

This Blog is one component part of the bridge we will be building, and it will be both a platform and a portal to identify relevant information, ideas, problems and solutions and to discuss them openly and critically.

Finally, our roots are in the business sector, and we will bring “business-like” rigor to our commentary. We will be frank and clear so as not to be misunderstood, while always being respectful. We also invite counter-opinion from those who disagree. Having said this, our critique of nonprofit sector organizations will be based on the following rigorous standards and principles:

ONE: Tax-exempt status is a privilege conferred by federal and state legislative acts. Tax exemptions and tax deductions reduce public tax revenue, and, as such, indirectly subsidize nonprofit sector operations.
TWO: The governing boards and management teams of these organizations must adhere strictly to high fiduciary standards when expending and managing the funds and assets of the organizations they serve. Moreover, as fiduciaries of financial and other assets dedicated to a public/charitable purpose, nonprofit governing boards have a higher level of responsibility than do our elected officials who are not held to fiduciary standards when they exercise their voting authority over public assets.
THREE: Nonprofit governing boards have a duty to develop a set of measures and metrics to gauge both internal operating functions and the social impact of their organizations. The applicable measures and metrics should be prepared in conformance with the fiduciary standards mentioned above consistent with applicable benchmarks, data, and known industry standards.
FOUR: Organizations should report prominently and candidly the results of operations relative to the measures and metrics. The fiduciaries governing boards of these organizations must have the courage to report poor measures and metrics, not unlike the manner in which publicly traded business organizations are required to do so – even if over the objections of management.
FIVE: Nonprofit Organizations should not misuse the emotional appeal of their mission. The emotional appeal of a mission statement should be subordinate to the measurement and metric outcomes.

Nonprofits should adopt these private-sector practices

On Oct. 14th Jack Horak discussed a new wave of thought called “stakeholder capitalism,” which injects some fundamentally new DNA into corporate America by requiring governing boards, for the first time, to consider social justice as they make their business decisions, even if doing so lessens shareholder profits.

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INTRODUCING THE AUTHOR.
John (Jack) Horak is a lawyer by training and practiced law for 36 years at the Hartford, Connecticut based law firm Reid and Riege, P.C. During the first half of his legal career he worked primarily with for-profit business clients, and in the second half he worked primarily with non-profit organization clients. His practical familiarity with both sectors, and daily experience with the types of organizations and people in each, led to the conclusion that the sectors should be allies and not opponents, and that a basis for the alliance exists in law, history, philosophy, logic, science, religion, and psychology.

While at Reid and Riege, Jack established the firm’s Nonprofit Organization Practice Group and authored the Reid and Riege Nonprofit Organization Report, a quarterly publication that was distributed throughout the United States. He has also published articles and editorials on legal and policy issues in Philanthropy Magazine, the Hartford Courant, and the Connecticut Law Tribune. He writes a regular column for the Hartford Business Journal entitled “Rule of Law.”

Over his career, Jack presented at various venues including the Commonfund Endowment Institute at Yale, the Aspen Institute, The Philanthropy Roundtable in Washington, D.C., The American Institute of Certified Public Accountants, and many others. He also served as a member of the board of directors of several nonprofit organizations.

Jack was listed in The Best Lawyers in America® for Corporate Law and Non-profit/Charities Law (2009-2017) and earned an AV® Preeminent™ Martindale-Hubbell Peer Review Rating. Jack is a 1976 graduate of Dartmouth College and a 1980 graduate of the University of Notre Dame Law School.

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