Non-Profits: Challenges, Deaths, Rebrands, and More - Research Paper

Introduction

Over the past few decades, American non-profits have witnessed various challenges, with some of them encountering near deaths, deaths, while others reincarnate into different business practices or rebrand. Often, these challenges are attributed to management or operations issues, ethical complications, financial problems, among others, that significantly affect the stability of non-profits. Some of the tax-exempt organizations are volunteer services, governmental agencies, legal aid services, labor unions, research institutes, and some public service organizations. This paper will provide an event structure analysis discussing Hull-House's non-profit organization by looking at its difficulties, the cause of its failure, and the outcomes as well.

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As one of the first settlement houses in America, Hull House, initiated programs such as fighting for the children labor laws, the building of recreational facilities for the slum children, as well as aiding immigrants to become U.S citizens. Even though Hull-House viewed itself as a critic of the American government, it acquired some of its funding from the government and few philanthropic supports (Addams, 1999). Serving residents of Chicago for over 100 years, Hull House was unexpectedly closed in January 2012 (Hull House Association). Today, the non-profit organization exists as a social service agency serving the public around Chicago. Within the organization, various individuals have attributed their collapse to the high reliance on government funding. Despite the overreliance on government funding being one of the significant issues, other practices such as poor governance, drift from the organization's mission, and financial mismanagement contributed to the untimely collapse of Hull House. Although there could be significant issues within the non-profit organization that facilitated its demise, it is essential to note Hull-House claimed that the harsh economic climate resulted in the organization's failure (Cohen, 2012). The harsh economic environment increases the cost and demand for social service; hence government agencies and other funding foundations may result in reducing their support.

History of Hull House

Named after the first owner of the house, Jerald Hull, the two primary founders of Hull house were Jane Addams and Ellen Starr, who acquired a building owned by the Hulls in Chicago (Addams, 1999). They set up a non-profit organization named Hull House in 1889 (Addams, 1999). This single building spurred the obtaining of several other buildings turning the Hull House institution into a considerably big size that catered to several people's needs along the course of its existence. Jane and Ellen started the settlement house as part of social services to help the diverse local community. Hull house concerned itself with addressing several issues within the society, such as the advancement of women's rights, juvenile justice, child labor reforms, education of immigrants and other immigrant problems, among other societal issues ((Hull House Association; Knight, 2012). By the mid- 20th century, the organization had grown nationally, serving its ultimate goal and mission.

Hull House's Mission

In consideration of the company's mission, Hull House concentrated primarily on two purposes. Firstly, it was improving the social opportunities available to the residents in the neighborhood. They comprised of immigrants to America who had come to try their luck with the American dream. These immigrants were often isolated. Thereby, Hull House had educated people living within its premises who were referred to as residents. These residents helped accomplish the mission of improving social opportunities and cultural competency by mingling with the people from the neighborhood who were mostly poor (Culbertson, 2012). By intermingling in these circles, the immigrants learned the American culture, and their self-esteem was improved.

Secondly, Hull House concentrated on providing people with education. The scholars were experts in diverse fields, which allowed them to educate the people in the neighborhood on various disciplines, including philosophy, psychology, art, literature, and domestic chores. The educated residents ensured that the beneficiaries were at per with current events. Education was a mission due to its ability to open up employment opportunities. It was a way to reform the immigrants to prepare them for life in a foreign culture in a humane manner. Hull House's primary mission was to be a settlement that made a direct impact on the neighborhood through social transformation and education (Hull House Association; Culbertson, 2012). Later on, Hull House became a place that pushed for the rights of different categories of people, including children, workers, and women.

Key Individuals

Furthermore, some of the critical individuals include Jane Addams. Jane Addams is a crucial person in Hull House as she was involved in the management of the institution until her death in 1935. She is notable as her noble cause helped several people over the decades Hull House was in operation ("Hull House," 2020). The first woman to hold a cabinet position in the U.S, Frances Perkins, was also a resident at Hull House. Ethel Andrus, an educator who would later find several associations for teachers and retired people, also stayed at Hull House. Florence Kelley is a crucial individual as she transformed Illinois laws and latter contributed at a national level through heading the National Consumer League. Notable men who resided in the settlement include Willard Motley, an African-American who wrote several novels. Gerald Swope, a manager at General Electric, stayed in Hull House and is notable as he vocally supported the federal government and called for unionization f workers so that their rights were safeguarded. Hull House was home to many professionals, thinkers, and scholars that positively impacted the lives of people in the neighborhood.

Organizational Structure

In its organizational structure, the organization followed different structures. Jane had been in charge, but in 1890, her former classmate Julia Lathrop took charge. Florence Kelley's arrival gave Hull-House a social reform institution outlook, which was a change from Christian Socialism. Toynbee Hall had inspired the latter in London. Other leaders of the organization include Gordon Johnson and Clarence N. Wood, who were aided by a board.

Hull House Programs

In the beginning, Jane and Ellen started to read and show pictures to residents. The need for women to have a place for their children soon arose, and a kindergarten and nursery were started. Women also got to share the challenges that they faced through talking sessions. Then the residents started being invited and took on teaching various topics. Programs for teenage girls and boys on domestic, leadership, and people skills started ("Hull House," 2020). Hull house did not discriminate on culture, race, or language. As a result, it brought together a diverse community of residents and beneficiaries. As a result, the programs implemented were broad and often took into consideration the specific needs of the group in question. The settlement mostly catered to working-class and poor people; thereby, the programs aimed at improving their lives considerably. The sharing programs were essential to Hull House as it aided in collecting research data that would be useful in clarifying the effects of poverty, ignorance, drugs, sanitation, disease, and other factors on populations. These would later be useful in helping push for reforms.

Physical Location, Assets, Financial Condition and Size

The physical location of the Hull House was at 800 S. Halsted, Chicago. The first institution was the house owned by the Hulls, but with time other buildings such as the Hull House complex were built. These buildings were the organization's main assets. The organization also had lands and equipment. After its displacement from the original location, the settlement went on to operate from different locations. These were under the Hull House Foundation umbrella, but all these operations closed down in 2012.

The Problem of Hull House

In the operations and management of Hull House as a non-profit organization, it encountered three significant challenges, financial negligence, poor governance, and drift from its mission and vision.

Financial Negligence

With a view of the financial position of Hull House from 1999 to 2010, show the economic problem that Hull House was experiencing (Clemenson & Sellers, 2013). Two years before the collapse of Hull House, the company had reached the insolvency zone. According to an analysis of the financial records between 2002 and 2001, Hull House's revenue decreased by approximately 19%, with a total decrease in revenue of about 27.3% from $32 million to $23 million. Also, the records show a reliance on government funding with less than 10% funding from public donations. In most of the cases, the organization found itself in a position where it had to spend acquired donations or expected funds to service expenses earned (Clemenson & Sellers, 2013). This increased the number of liabilities than assets in the company creating an organizational imbalance. The incapacity to fund programs, deficient annual surplus, poor debt management, and undiversified revenue are a clear indication of financial negligence at Hull House. These financial difficulties are attributable to hard economic times that have occurred in some years of its existence. However, Hull House failed to diversify its revenue sources and continued to make adverse financial decisions that saw it crumble into debt and bankruptcy (Cohen, 2012).

Poor Governance

In the operating days of Hull House, some of its major turn arounds are seen when Gordon Johnson was hired to lead the non-profit organization. In his practice, Johnson relied on government funding and increased Hull Houses' annual budget to $40 million in 2001 from $9 million seen during the late 20th century (Hull House Association). However, after Clarence Wood succeeded him, focused on acquiring private funding for the company since the Illinois government was continuously cutting back its funds, resulting in financial problem. Since Wood could not deliver help on the financial difficulty, the management, together with the Board of trustees, should have developed the "duty of care" and ensure informed decision making. As seen from the then financial position of the company, it is evident that either the board members did not interpret the financial statements as expected as they did not look at the financial statements. If the Board had taken its responsibility for the "duty of care," there are chances that Hull-House financial difficulties would have been identified earlier and rectified the sources of funding before its collapse through effective governance. Internally, there was a governance gap between the staff and the board members; whereby, Wood argued that some members of the boards encouraged company neglect and closure over the struggle to operate. Externally, the shareholders criticized the non-profit organization for not airing its financial problems but instead gave a perfect image of the company. The reluctance by the Board of members to show the real condition of Hull House, miss communication within the company, poor decision making, and governance, and violation of the Board's duty of care facilitated the company's closure. Poor management is a disregard of legal requirements that guide non-profits on how to act ethically. Poor decision making while one holds the leadership of a non-profit organiz...