Mark Koscinski NFP

Stabilizing an Organization

What do you do when you take over an NFP organization that is in turmoil?  Surprisingly, the answer is sometimes nothing. At least for a while. When faced with a decision, we often have a predilection for acting, even when there is no persuasive reason to do so. The father of modern decision analysis, Daniel Kahneman, would often counsel waiting before making a decision, eschewing the psychological pressure to act as quickly as possible. Perhaps new data will become available, allowing a better decision to be made. This can be frustrating for observers, but it might be the right decision when a new CEO is leading an organization that has recently experienced turmoil. In such a case, the organization’s leaders have determined that it is necessary to stabilize the organization before it can move forward. In a sense, it is the opposite of a turnaround situation, in which every piece of furniture and every employee can be thrown overboard to save the organization. 

One example of this principle has been the way that Pope Leo has operated the Vatican since his election in 2025. There has been no radical change in the doctrine or structure of the Roman Catholic Church since the beginning of his pontificate, nor has there been any reversal of actions undertaken by his predecessor, Pope Francis. Francis addressed many contemporary issues during his pontificate, to the consternation of many in the Church. Consequently, the Church was rocked by the specter of synodality, LGBTQ issues, and the virtual ban on the Latin Mass. Pope Leo has undertaken some diplomatic initiatives and sought to address AI’s impact on the world, but his actions have focused more on consolidating the Church’s position and maintaining unity. This has been applauded by many Catholics as a way of steadying the ship on a rough sea. 

This can only be a temporary stance, though. Leo’s current posture may not be possible much longer. The SSPX (Society of St. Pius X), a traditionalist wing of Catholicism, has threatened to ordain bishops without the Vatican’s permission. German bishops have been actively advocating for the ordination of women to either the priesthood or the diaconate. Many traditionalist Catholics are calling for the return of the Latin Mass. It seems Francis will need to act soon on these issues. Only time will tell how his leadership will shake out.

The Pope’s recent encyclical on artificial intelligence can be found here.

Mark Koscinski behavioral economics, decision analysis, NFP

Altruism

In a previous blog, I wrote about optimism and its importance in both the business and the NFP world.  Today, I would like to discuss altruism. What makes someone donate to a charity? If only NFP fundraisers knew the answer to this question… Neuroscientists and behavioral economists are trying to provide an answer.  Donors and volunteers have a sense of altruism, gained from  acts reducing their own well-being in order to help others. These acts include  donating or volunteering. The reductions in savings and free time to help out arguably reduces the donors’ well being.  Or, do they? Economists use the term “other regarding preferences” to describe altruistic acts. Giving  time and treasure to a charity comes from internal motivation and a sense of  identity. Donors and volunteers get a “warm glow” feeling or additional utility (to use another economic term) from these actions and neuroscience has developed evidence of this. Dopamine levels rise when altruistic acts are performed. 

Are altruistic acts completely altruistic? Sometimes a seemingly altruistic act isn’t so altruistic. Donating and expecting returns is not really altruistic. For example, political donors may expect  they will receive an appointment or their companies may receive additional business from the government.  Donating significant amounts of money to a charity can send a signal to others of great wealth and conspicuous consumption. These would not be altruistic acts. To a lesser extent,  don’t we expect some return for our donations?  We might get tax deductions for our donations and some recognition for our volunteer efforts.  The economist James Andreoni coined the term “impure altruism”  in 1990 to describe how even the warm glow feeling we get from donating makes our motivation somehow tainted with self-interest. 

While this  discussion is intellectually stimulating, don’t look too deeply into the motivation of donors and volunteers.  They are objectively doing a good thing so I suggest just leave well enough alone.  There are philosophical treatises on mixed motives that are well beyond the scope of this article, but I would suggest human beings are complex creatures who may not be able to articulate their motivations to themselves let alone to anyone else.  As a practical matter judging motivations of a donor or volunteer is at best a very, very tricky endeavor, not worth the time and effort of the NFP management.  There is no moral, ethical, or legal requirement to do so.  Running an NFP is difficult enough.  Why take on the burden of figuring out the motives of donors? 

Mark Koscinski Uncategorized

Decision Making: Essentials You Always Wanted to Know

I am proud to say my book on Decision Making is now available from Vibrant Publishers. The website is http://www.vibrantpublishers.com. The book is part of their Self-Help Series but can also be used in undergraduate classes on decision analysis. I have actually field tested the contents in both an undergraduate and graduate class, and it was well received.

I have previously contributed an article on Commercial Lending to their Financial Management book, also part of the Self-Help Series. I look forward to working with them in the future!