Two big bailout stories came out today and all day I've been thinking about how both are interlocked. Most of us heard about the declared bankruptcy of GM but it was the tale of AIG* trying to recapture their charitable endowment for executive salaries and bonuses that peaked my interest the most. Fortunately my organization does not receive support of AIG and is not affected but there are dozens who are including Citymeals on Wheels. I think we can all agree that, if true, it is a despicable act of desperation. I am hoping the news reports and blogs are wrong but it got me thinking. Putting that story to one side, what if GM or AIG were treated like a charitable organization, non-profit or not-for-profit company? Would we bail them out? Would we prop up bad management for the sake of the mission? I don't think so.
At the start of this economic downturn many non-profits saw the warning signs, we began to tightening our belts and look at ways to retool and streamline project management systems. The word from many corporate boardrooms was that 'all bets are off' and to set clear guidelines for impact and expenditures. Yet as individual donations began to dry up and CSR departments began to downsize, we heard nothing either candidate to prop up these shortfalls. Knowing there would be no bailout, we became more nimble (we are 9% admin), more open to collaborate and more willing to partner with charities and social entrepreneurs with similar and/or complimentary missions. How much would have we saved if the big three had become the big one in September 2008?
Instead of installing 'a private board' of automobile executives perhaps Obama would be wiser to install successful not-for-profit leaders.
Another alternate plan that was relayed to me by multiple folks via Twitter is to go the whole hog and well beyond the Michael Moore plan. Buy GM completely, turn it into a not-just-for-profit company that builds and delivers an integrated and energy efficient public transportation system (
*I should note that there are a number of shiny apples in AIGs executive cart. A few months back Jake deSantis resigned from AIG and donated all of his post tax bonus to charity, almost $750K. Here is his letter to Mr. Liddy. Kudos Jake.