Thursday, January 29, 2015


The non-profit, for profit and government sectors in American society are intertwined and interdependent.[1]  A recent example of how these sectors behave synergistically is the change in   leadership of the government’s second largest t agency, the Department of Veterans Affairs, from a venerable and highly decorated military general, Eric Shinseki, to a corporate business manager.  In August 2014, Robert McDonald became secretary of veteran’s affairs after a 30-year corporate executive career at Procter & Gamble.  Following scandals of poor management, cover ups regarding enormous waiting lists for health care benefits for Afghanistan and Iraqi veterans and a whistle-blower’s disclosure that delays in care had led to deaths at the VA’s medical center in Phoenix, Arizona, McDonald was appointed by the Obama administration and confirmed by the United States senate to lead an agency whose information processing technology dated back to the 1980s. 
Using a business perspective, McDonald proposed an aggressive restructuring of the VA that would give veterans a single point of contact for health care and other services and consolidate functions under a smaller number of regional executives to make it easier to manage problems locally.[2]  He increased the salaries of VA physicians and nurses.  Understanding the paucity of physicians and psychiatric and mental health professionals in the VA, McDonald started an aggressive recruiting campaign of students and medical residents by personally visiting medical schools across the country.  His plan was to offer competitive salaries and school debt forgiveness up to $120,000.
What is most interesting about the intersection of corporate and government expertise is that McDonald opposed privatization trends advocated by Republicans in Congress, some of whom advocated decreasing the breadth of services and employees of the VA by substituting a voucher system that would allow veterans to access private physicians.  McDonald argued that a voucher system “would erode the three independent VA missions of treatment, research and teaching.”[3]  In this instance, legislators promoted a “fiscal bottom-line” approach while the erstwhile business executive encouraged solutions based on non-profit principles and purpose.
However, Congress decided to pass the Restoring Veterans’ Trust Act introduced by Democratic Senator Bernie Sanders and Republican Representative Jeff Miller, to allow veterans facing long delays to get care outside the VA, if VA doctors are unable to treat patients within fourteen days, at private doctors' offices, military bases or community health centers.   This expanded funding opportunities for  non-profit service and advocacy organizations like Iraq and Afghanistan Veterans of America, Wounded Warriors Project and Disabled American Veterans to name a few.
This example underscores that for profit, nonprofit and government sectors must rely on each other to prosper.[4]  

[1] Berman, H.J., “Doing ‘Good’ vs. Doing ‘Well’: The Role of Nonprofits in Society,” Inquiry 39: 5-11, Spring 2002.
[2] A single regional framework plan-MyVA Initiative-was officially announced by the VA on January 26, 2015.  Office of Public and Intergovernmental Affairs,
[3] Richard Oppel Jr., “V.A. Creates Plans to Consolidate Services,” The New York Times, November 11, 2014, page A20.
[4] Berman Inquiry 39: 5-11, Spring 2002; Hall, P.D.; Van Til, J., The Jossey-Bass Handbook of Nonprofit leadership & Management, Chapters 1 &2, Second Edition, Herman, R.D. & Associates, 2005, John Wiley & Sons, Inc., San Francisco, CA.