MARTHA CAVAZOS SITS CROSS-LEGGED ON THE COUCH in the living room of the house she rents with four roommates in Southwest Detroit, periodically taking a break from her laptop to pet a floppy, black and white spaniel who snoozes nearby. One roommate has left for a road trip to her fiancée’s house in Pennsylvania, while the rest of the house remains under self-imposed isolation. It is the new normal under COVID19. In an increasingly quarantined world– during the age of the corporation, no less- the nonprofit community is under an enormous strain to hold it together.
Cavazos, 30, works remotely much of the time anyway– so the isolation isn’t completely unusual. But this week, she was supposed to be in Nairobi for a stopover en route to South Africa, where her organization was supposed to host a leadership development institute. She voluntarily cancelled the trip at the last minute, just two days before she was set to fly out– and less than a week before South Africa and Kenya both imposed quarantine measures against incoming travelers, well before such efforts were taking place in the states. The night she would have flown out, Trump announced a temporary ban on most travel to Europe.
The cancellation of the StartingBloc Institute— which, be it said, the author attended last month and greatly enjoyed- represented a devastating blow to the organization, which overwhelmingly depends on attendance fees to fund scholarships for attendees as well as its general operations.
But continuing with it in light of a rapidly deteriorating global situation could have been far worse.
“I think the tipping point for us was when Kenya temporarily banned all conferences and international gatherings,” Cavazos says. “Nairobi […] is at the intersection of a lot of different international communities, so that precedent being set, along with much larger gatherings like South By Southwest being cancelled— with our Institute, we have to consider fellows coming from ten different countries, airports that they would be passing through, people they would be interacting with. There was so much that we couldn’t control.”
While the organization also provides consulting services in organizational development, the Institutes, which it usually puts on a few times each year, are its bread and butter. Attendees participate in a five-day, intensive program that includes reflective, personal work as well as collaborative exchange. Each day focuses on a different topic, with sessions and speakers talking about communication and storytelling, equity and inclusion, behavioral psychology, relationship management, and generally looking at how to train the next generation of leaders. In their words, the objective is to shift “the paradigm of work and leadership to create a more just, sustainable, and thriving planet.”
ARE THERE REMEDIES WHEN EVERYONE IS SCREWED?
StartingBloc has a couple of fundraisers going on at the moment. But these are all reliant upon donations from members and fans. While there are many kinds of insurance that cover doesn’t cover pandemics. Liability insurance, for example, usually exists to protect property owners, businesses, and event organizers from costly lawsuits. And property insurance usually will only compensate owners for a loss of income in the case of some sort of catastrophic damage. Pandemics aren’t covered. Nor does most travel insurance cover pandemics, leading many travelers to wonder why they bought it in the first place. (Cavazos talked Emirates and Qatar Airways into a partial refund for the ticket cancellation).
Many jurisdictions have legal protections against contract breaches in cases of a force majeure. This is the kind of thing mentioned in the fine print of every contract– that exempts fulfillment in the case of “riots, floods, earthquakes, or acts of God.” Legality aside, StartingBloc’s leadership felt obligated to refund the attendees the fees they paid to attend the Institute, leaving them effectively with about a $40,000 shortfall.
“The African Leadership Academy has been extremely accommodating to work with,” Cavazos says, “and we’re still really excited about the opportunity for a future institute in South Africa.”
Cavazos says that in hindsight, even though there would have been no way to plan for the freak occurrence of a virulent pandemic sweeping the globe, there might be ways to adjust the operating model moving forward.
“In 17 years of existence, the vast majority of our income has come from events, and that’s simply not sustainable,” she explains. Expanding the organization’s international focus has proven challenging amid an increasingly xenophobic political landscape under the current administration. “We took a hit when Trump got into office, because we were unable to bring in as many fellows to the United States from abroad,” she continues, relating a story about one fellow from Central Asia whose visa was inexplicably denied for travel to the California institute in February.
Nigeria, which has a growing community of StartingBloc fellows, was targeted by the expansion of Trump’s recent travel ban. The country is one of the most populous in the world and has the 23rd largest GDP (by purchasing power parity).
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BROADER IDEAS ABOUT RISK MANAGEMENT
On the global stage, there is some discussion– most of which began around the time Zika was sparking global fears- about a market-based solutions to pandemics. No, it’s not as awful as it sounds. The idea is that “pandemic bonds” would be sold on the open market to finance emergency healthcare and treatment in places that needed it the most. From a risk standpoint, pandemics are extremely rare, so this may be attractive to investors.
How do we think about managing risk as far as facing an unthinkable catastrophe? Must we plan for it, no matter how bleak? One can think back to Donald Rumsfeld’s now-famous proclamation during the Second Iraq War, which has since made its way into many a business text as a characterization of the dichotomy between “risk” and “uncertainty”:
…as we know, there are known knowns: there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.
In a global sense, uncertainty is a part of risk. But risk models have historically failed to account for uncertainty. This underlies many characterizations of the 2008 financial crisis, when a perfect storm of events facilitated a collapse in complex financial instruments that seemed at such extreme ends of a probability distribution that, risk analysts claimed, they could never have predicted it. But it’s far more complicated than simply planning on the unlikely. Nassim Nicholas Taleb in his book, The Black Swan, attempts to derive “a protocol on how we should live in a world we don’t understand.”
This is a question currently gnawing at the very roots of the field of risk management: One can plan for utterly unanticipated, bizarre things to happen. But this could be expensive. How much would insurance cost to refund the entirety of, say, a program that would bring in $50,000 or $100,000 in revenue? Should one not count on the possibility of a catastrophic event of some sort, however improbable?
Had StartingBloc already completed its million-dollar capital campaign and established some sort of permanent fund, though, such a fund could have gotten hammered with the past month’s collapse in global equities.
TOWARD FEDERAL INTERVENTION
The timeline we live in is quite bizarre when a recent Republican presidential hopeful is pushing for the equivalent of Universal Basic Income. Many proponents of UBI have argued that this could provide a valuable safety net in the face of such uncertainty as our current situation. Proponents also argue that in most cases it would be a relatively simple strategy to supplant the need for a complex web of other social welfare programs. UBI, proponents say, would protect people like Cavazos or her coworkers if their organization ran into a catastrophic event that prevented a major source of revenue from coming through.
At the executive level, the possibility of an $850 billion stimulus package would likely be directed toward business and infrastructure. Nonprofits would seem unlikely to benefit directly. The same is true for a payroll tax holiday, which would only benefit workers who are still working. In the event of a recession, nonprofits get hit especially hard– but have no possibility of enjoying bailout money.
SEEKING SILVER LININGS
In the mean time, Cavazos is enjoying time with dogs, going for more walks, and doing more baking and cooking. She gleefully displays her latest acquisition, an Allison Roman cookbook (she speaks of “Allison” with a dreamy smile). She admits to feeling better than the she did a week ago amid the stress of cancelling her trip, and is already seeing the bright side– in evidence that the crisis could strengthen relationships within StartingBloc and its global community of fellows fellows.
“I am overwhelmed by the possibilities that exist in StartingBloc– to be convening and supporting each other digitally around the world,” Cavazos says. “We have always done this– this has alway been a thing. But in the last few days, I’m seeing more virtual gathering, more resource sharing than ever. I’m excited about the precedent for this to be even more accessible– with the hope that we can get back to doing things in person soon enough, because the face-to-face is what we’re really all about.”
The house– whose inhabitants are usually running around town, attending local goings-on, playing soccer, commuting to work in a northern suburb- has been enjoying family dinners every night. Last night was the first virtual dinner party the house hosted, with four attendees in four different locations attending via smartphone.
While the house teleworks, laptops clustered around the same dining table, Luna, the 7-year old spaniel– with arthritic hind legs that splay out when she sits afore her humans in perpetual expectation of pets- is content to nap all day. Dogs, it is said, are enjoying an unprecedented amount of face time with their humans these days. And that, irrespective of instability in global markets or budgetary risks to our respective organizations, is something for which we can be thankful.
Donate to StartingBloc’s fundraising campaign to continue support its mission of facilitating leadership development and social innovation around the globe. To support the fellows and the organization’s administration, the Handbuilt City will be donating 3 months of new Patreon subscriptions for the next seven days.