A Big Chill In The Windy City

In 1990, WBEZ General Manager Carole Nolan faced a daunting task: turning a newly spun-off unit of the Chicago Board of Education into an independent public radio station. So, Nolan turned to the Executive Service Corps of Chicago, a nonprofit organization that provides retired executives as consultants to other nonprofits. After paying a $4,500 membership fee, Nolan called on the former president of agency giant Leo Burnett Co. to craft an ad campaign. The former head of Allstate Insurance Cos.' human-resources department helped her fashion a salary plan. And she relied on the advice of a former executive vice-president of Turner Construction Co. when the station built a new facility. Marvels Nolan: "This kind of expertise is hard to buy at any price."

Unfortunately for young ventures such as WBEZ, the price for this talent is going to increase. That's because Chicago's Executive Service Corps, part of a national, 34-member network, is facing tough times. The Chicago affiliate, which relies on companies to fund 43% of its $1.2 million annual budget, has seen donations fall 10% in the past year as companies reduce or redirect their donations due to strategic giving plans. Explains ESC President Dennis Zavac: "We rely heavily on unrestricted funding, and those dollars are becoming scarcer and scarcer."

Result: a major retrenching. The ESC staff has shrunk to 16 since Zavac laid off five employees. ESC also has halted publication of a quarterly newsletter for its 400 volunteer executives and eliminated its annual membership meeting. Now, the nonprofit is hunting for office space that will allow it to halve its rent.

`SMARTER.' The organization also is mulling an increase in it rates for services. Client fees currently make up 16% of its budget, a percentage that has doubled since 1987. Even so, they don't even begin to cover costs: They cover the equivalent of $3.56 an hour for the services it actually costs ESC $20 an hour to deliver. While higher fees may cause hardship for some of ESC's 300 clients, the service "will still look like a bargain" compared with hiring consultants at market rates, says John D. Connelly, executive director of Jobs for Youth, an organization that places low-income 17-to-21-year-olds in jobs. It has used ESC consultants for everything from developing a plan to recruit employers to setting up a financial record-keeping system.

Not all of the changes induced by the crunch have been for the worse. "We have found economies," says Zavac, "and we have become a lot smarter about using volunteers." After a six-month search, an ESC board committee found a health-care plan that cut premiums 12% a year but maintained the same level of coverage. Other volunteers are researching possible new markets for ESC's services, such as colleges. Indeed, with the new direction in corporate philanthropy, Executive Service Corps will need all the volunteer help it can get.