Report to The Arc of the United States'
Task Force on
Affiliation and Growth
Thomas McLaughlin
Stacey Zelbow
Grant Thornton, LLP
Not-for-Profit Management Consulting
226 Causeway Street
Boston, Massachusetts 02114
(617) 848-4899
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Project objectives and approach
Purpose
To analyze current realities and the
movement's collective desires for the
future, and recommend models to
strengthen affiliation and growth
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Why do these questions arise now?
• Affiliation issues constrain growth
• There is no clear model for affiliation
• Questions about affiliation add complexity to
the new CEO's job
• The Arc of the US lacks adequate resources
to carry out all agreed upon responsibilities
• Growth requires strategic choices
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The Arc confronts a crisis of relevance
•
•
•
•
•
•
A greater range of competition
Voluntary democratic leadership harder to
sustain due to 'time-starved' families
Brand has value but falls far short of potential
Federal gains at risk due to weakened
grassroots action and fiscal crisis
National office has multiple customers, must be
all things to all stakeholders
No timely unifying theme or “rallying point”
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Nonprofit
competition
Understanding
• Reviewed
driving
documents
Themes &
Trends
• Analyzed
financials
• Conducted
survey
• Conducted
interviews at
• Analyzed
all levels of
survey and
the movement
interview data
• Conducted
• Synthesized
corollary
findings
research
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Business
Case
• Present
findings at
convention
• Solicit input
• Identify
opportunities
and barriers
Plan
• Integrate
feedback
• Final
recommendations
to Task Force
• Task Force
recommends
action to Board
Current state of The Arc movement
Current
Current
State
State
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DesiredModels
Future
State
The Task Force's challenge
Stakeholders require
immediate responsiveness to
current challenges
and
long-term strategies for value
through affiliation and growth
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Our framework
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Mission
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The Arc of the United States' mission
The Arc of the United States advocates for
the rights and full participation of all children
and adults with intellectual and
developmental disabilities. Together with
our network of members and affiliated
Chapters, we improve systems of supports
and services; connect families; inspire
communities; and influence public policy.
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The Arc of the United States' mission
Theme Identification
Advocates
40
Rights
35
Full Participation
30
Children
25
Adults
Intellectual and Developmental Disabilities
20
Network Of Members
15
Affiliated Chapters
10
Improve Systems Of Supports And Services
5
Connect Families
0
Inspire Communities
Theme Identification
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Influence Public Policy
What we heard . . .
Vision and Mission
How successful is The Arc in achieving its mission?
High
60%
How close is the original vision to being realized
today?
High
54%
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Strategy
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Strategy vs. work
Strategy
Workplan
…Is about what the
organization
wants to be…..
…Is what the
organization
is going to do….
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Strategic plan
• Encompasses 2005 – 2008
• Calls for activities -- work, not strategy
• Does not set a unifying strategy for the movement
• There is no explicit mechanism for evaluation
• Does not parallel the eight responsibilities
contained in the Affiliation Agreement
Our recommendations to the Task Force will frame
a strategic position for affiliation and growth
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Organizational
Structure
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Most important affiliation tasks
(identified by participants in NCE conference, August 2008)
60
50
High Priority
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Assessment
Media
Fiscal Integrity
NFP Compliance
Officer Training
0
Member Services
10
Participation
20
Advocate
30
Assist Chapters
40
Current organizational structure
•
•
•
•
National office has little
inherent authority
Differentiation of service
provision & research is not
reflected in practice
No tools for managing the
brand
Structure unrelated to
strategy or an agreed upon
affiliation model
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The Arc of the US
NCE
State Chapters
Local Chapters
Members
Foundation
Loose web
Want to share principles or exchange knowledge
High
Loose web
Autonomy
Low
Low
High
Affiliation
But do not have common goals or feel the need to
share resources
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Source:
Adapted from Grossman/Rangan 2000; McKinsey analysis
Enabled network
Want to collaborate to increase impact . . .
Network models
High
Loose web
Enabled
network
Autonomy
Low
Low
High
Affiliation
. . .but do not want to invest in common infrastructure
and have no intent on of building a common brand
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Source:
Adapted from Grossman/Rangan 2000; McKinsey analysis
Loose federation
Want to align missions and share
information and resources, create a brand
identity and ensure quality . . .
High
Loose web
Enabled
network
Loose
federation
Autonomy
Low
Low
High
Affiliation
. . .but do not want to sacrifice local autonomy,
especially finances
© Grant Thornton LLP. All rights reserved.
Source:
Adapted from Grossman/Rangan 2000; McKinsey analysis
Strong federation
Want to share mission, to build a strong
brand, to exploit fund-raising and to engage
in joint strategy setting . . .
High
Loose web
Enabled
network
Federation models
Loose
federation
Strong
federation
Autonomy
Low
Low
High
Affiliation
. . . but do not want to sacrifice local flexibility and
'ownership'
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Source:
Adapted from Grossman/Rangan 2000; McKinsey analysis
Franchise
Want to replicate nationally and to retain control
over operating standards and brand . . .
High
Loose web
Enabled
network
Loose
federation
Strong
federation
Franchise
Autonomy
Organizations
who want.. . .
. . . but. . .
Low
Low
High
Affiliation
. . . but still need localized approach in service delivery
and financial support with distributed leadership
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Source:
Adapted from Grossman/Rangan 2000; McKinsey analysis
Want to extend scope by rolling out programs
with control over operating standards, brand,
and service delivery . . .
Subsidiary
High
Loose web
Enabled
network
Loose
federation
Strong
federation
Corporate models
Franchise
Autonomy
Organizations
who want. . .
Subsidiary
. . . but. . .
Low
Low
High
Affiliation
. . . but do not want to allow for much local
discretion
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Source:
Adapted from Grossman/Rangan 2000; McKinsey analysis
Resources
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Revenue and expense trends
(in thousands)
Deficits in five of the past eight years
$5,200
$4,200
$3,200
Revenue
Expense
Profit/Loss
$2,200
$1,200
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07
20
06
20
05
20
04
20
03
20
02
20
01
20
20
-$800
00
$200
Financial indicators, 2007
Favorable/
Unfavorable
Liquidity
Days cash
Capital Structure
Debt to net assets
P
32
P
0.00
Profitability
O
Total margin
-17.66%
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Operating revenue 2007
The Arc of the United States
Other
Investments 3%
4%
Contributions
19%
Government
Grants
2%
Membership
52%
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Program
Services
20%
Dues
revenue
$1.9 million
Services to $2.3 million
affiliates
expenses
Comparable associations based on ASAE
benchmarks
ß The Arc
50%
40%
30%
20%
1. membership
dues
2. educational
programs
3. conventions
10%
0%
Association Size
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$1
0M
+
$2
M
-5
M
$5
M
-1
0M
$5
00
K1M
$1
M
-2
M
4. grants
<$
50
0K
Share of Revenue
Association Revenue Sources
5. periodicals
6. government
funding/contracts
Profile of comparable organizations
• Top twelve organizations named in
survey
• National association
• 501(c)(3) public charity
• Mission is to enhance lives of people
with disabilities
• Market leader
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Top twelve organizations named in survey
(in order of frequency)
1.
5.
9.
10.
2.
6.
3.
7.
11.
4.
8.
12.
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fA
dv
Rev. of nat'l HQ (in millions)
B
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Total revenue of the twelve comparables
(based on most recently available data: FY05 or FY06)
$100
$75
$50
$25
$-
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Affiliate structure and membership revenue of
comparables
1. Special Olympics
2. Autism Society of America
3. American Assoc. of People w/ Disabilities
4. Autism Speaks
5. UCP
6. Easter Seals
7. National Association on Down Syndrome
8. National Down Syndrome Society
9. TASH
10. Goodwill Industries
11. Self Advocates Becoming Empowered
12. Best Buddies
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8 regions worldwide
200
-15 sites in North America
100
83 affiliates, 600 centers
-248
30+
184 worldwide
9 regions
--
Percentage of revenue from membership dues and
assessments
75%
50%
25%
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dw
ill
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oo
Ar
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f
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at
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B
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AP
D
0%
Sp
ec
ia
A
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ut
is
ly
m
m
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et
y
of
A
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ks
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Revenue of national HQ
(based on most recently available data: FY05 or FY06)
Private support as a percentage of total revenue
Total
Revenue
Private
Support
(000,000)
Special Olympics
$203 million
$166
Easter Seals
$893 million
$144
Goodwill Industries International
$2.93 billion
$456
United Cerebral Palsy of America
$587 million
$63
The Arc of the United States
$2.82 billion
$93
Forbes Top 200 U.S. Charities
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Private
Support as
% of
Total
Revenue
81.8%
16.1%
15.6%
10.7%
3.3%
Spending on national headquarters as a percentage
of total revenue
Forbes Top 200 U.S. Charities
Total
Revenue
HQ as
Nat'l HQ
% of
Revenue
Total
(000,000) Revenue
Special Olympics
$203 million
$71.6
35.27%
Easter Seals
$893 million
$82.5
9.24%
United Cerebral Palsy of America
$587 million
$6.6
1.13%
Goodwill Industries International
$2.93 billion
$19.4
0.66%
The Arc of the United States
$2.82 billion
$3.8
0.13%
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