The Challenge of Funding Consensus-Building Processes - CiteSeerX

The Challenge of Funding Consensus-Building Processes Matthew McKinney

Interest in using consensus-building processes to foster agreement on public policy is growing rapidly in the United States. In my home state of Montana, for example, we are seeing the emergence of many community-based attempts to resolve public disputes on water use, growth management, public land planning, and human services policy. People with diverse viewpoints are also coming together to build understanding and seek agreement on hazardous waste policy, the regulation of game farms, wilderness and federal lands, and other multi-party public policy issues. Facilitators and mediators play a crucial role in designing and managing these consensus-building forums. They help stakeholders assess their situation to determine if a consensus process is appropriate, then work with the participants to design an effective process. They may also

convene and coordinate meetings; shuttle among participants to clarify issues and possibilities; serve as an objective recorder of what is discussed; prepare documents, such as ground rules, work plans, and areas of agreement; and assist the participants in implementing agreements. Although consensus processes are growing in popularity, the ability to pay professional facilitators and mediators is often a challenge, particularly in a social, economic, and political environment that is increasingly characterized by a growing demand on limited resources. It is imperative, therefore, to explore new ways of leveraging funds from individuals, corporations, government, and philanthropic foundations to support consensus-building forums. The experience of the Montana Consensus Council as a publicprivate partnership offers some valuable lessons for this search.

Matthew McKinney is director of the Montana Consensus Council, Office of the Governor, State Capitol, Helena, MT 59620. He earned a Ph.D. degree in Natural Resources Policy and Conflict Resolution from the School of Natural Resources and Environment at the University of Michigan. 0748-4526/97/070235$12.50/0 C 1997 Plenum Publishing Corporation

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Funding Sources and Limitations Most forums designed to build agreement on public policy are funded through one or more of the following sources: fees for services, foundation grants, individual and corporate donations, and government funds. Most state offices of dispute resolution, for example, receive funding from their state's general fund. University-based programs tend to rely on either the state's general fund (e.g., the Florida Conflict Resolution Consortium) or private sources of funding (e.g., the research centers supported by the Hewlett Foundation). Not-for-profit organizations lean heavily on grants from foundations. Solo practitioners tend to rely on fees for services but are often forced to keep their "day jobs" as attorneys, educators, and consultants in other fields. Unfortunately, these sources are proving to be insufficient, unsustainable, or in decline. Government at all levels is reducing spending. Moreover, some question the appropiateness of asking government to pay for consensus-building forums. Taxpayers are already paying government agencies to solve public policy problems, the reasoning goes, so why should they be asked to pay a second time? Foundation grants are often limited to startup funding, or are given for specific projects. And all too often, consensus-building participants are unwilling or unable to pay fees for consultation, facilitation, or other services. In short, the ability to pay for consensus-building services has not kept pace with the growing demand for such services. 236 Matthew McKinney

Many practitioners — whether associated with a public organization, private corporation, or operating on their own — know first-hand of the difficulties in getting participants to pay for the services of designing and managing forums to build agreement on public policy. Government contracts probably account for a majority of the fees paid to people providing consensus-building services. Citizens, community groups, advocacy organizations, and private businesses rarely contribute toward the costs. Part of the reason for this is that the general public's awareness and understanding of consensus processes is inadequate, resulting in a lack of appreciation for the value of consensus-building forums. Then, too, the specific outcomes of consensus processes are largely unpredictable because of the number and diversity of participants as well as the opportunity for innovative problem solving during the course of negotiations. In addition, the initial distrust among stakeholders often makes it hard enough to get them to sit down together. Asking them to pay for a facilitator or mediator is simply one more barrier to participation. And, in the public policy arena, many stakeholders are unaffdiated — they are not organized as a constituent group and have no pooled resources. When the stakeholder group includes unaffiliated citizens, not-for-profit advocacy groups, large corporations, and government agencies, it becomes difficult to determine each participant's fair share of the costs. All of these factors combine to make many stakeholders wary of paying for consensus-building services.'

The Challenge of Funding Consensus-Building Processes

Given the limitations associated with expecting participants to pay a fee for service, it becomes necessary to rely on other sources of funding — government funds and donations from individuals, corporations, and foundations — to subsidize consensus-building forums in appropriate situations.

Form Follows Function: Choosing an Organizational Structure The Montana Consensus Council was created by executive order in January 1994 to promote fair, effective, and efficient processes for building agreement on natural resources and other public policy issues important to Montanans. As an organization dedicated to building understanding and agreement, the council is designed to supplement, not replace, the work of existing institutions to shape and implement public policy. Currently connected to the Office of the Governor for administrative purposes, the council is governed by a board of directors representing Montana's demographic and ideological diversity. Its staff consists of two full-time state employees and three to five consultants from the private sector, depending on the needs and opportunities that emerge. The council was originally supported by a two-year grant from the state's Renewable Resources Development Program, which is funded by a state tax on oil, gas, and mineral development. This seed money was designed to launch the organization and to demonstrate that consensus processes can help resolve public disputes and shape widely sup-

ported public policy. During fiscal year 1996, the council was funded one-third from the state's general fund, one-third from fees for services, and one-third from contributions by individuals, corporations, and philanthropic foundations. In 1995, the council's board of directors articulated four objectives to help frame the discussion of how the organization should be structured and financed to maintain its impartiality, effectiveness, and sustainability once the seed money ran out. (1) Maintain and enhance the connection of the council to the existing arenas for shaping and implementing public policy, including the Office of the Governor and the state legislature. The council should be connected to these institutions to help citizens and officials efficiently and effectively shape and implement agreements on public policy. Such an arrangement also underscores state government's critical role in fostering public decision making through consensus processes. (2) Build on and improve existing relationships with citizens, private businesses, advocacy organizations, and others in the private sector. Given its commitment to help citizens participate more fully in the process of developing effective and widely supported public policy, the council should have a solid foundation and reputation in the private sector. It should not only respond to the needs and interests of citizens throughout Montana, but allow them to govern the council as well. (3) Maintain the Montana Consensus Council's flexibility to meet emerging needs and opportunities. Negotiation Journal July 1997 237

To avoid the possibility of its own bureaucratization, as well as to expand opportunities for individuals in the private sector, the council should support a small core staff and use people in both the private and public sectors to provide needed consensus-building services. (4) Seek a diversified base of funding and support to maximize the financial stability and sustainability of the council, to enable the council to subsidize forums for participants who are unable to pay, and to enhance the council's credibility, legitimacy, and, ultimately, its impartiality. Using these objectives, the board examined five different organizational models — the state office model,2 the not-for-profit model,3 the universitybased model, the public-private partnership model, and the public corporation model4 — and spent a year gathering information on each of these models from organizations around the country. Their conclusion: more than any other model, a public-private partnership would enhance the ability of the Montana Consensus Council to achieve its four objectives, including the opportunity to attract diverse streams of revenue. Subsequently, the board and staff consulted with about 100 citizens and officials in the state about formalizing the Montana Consensus Council as a public-private partnership. The proposed structure was also evaluated by the Consensus Building Institute, a nationally known organization based in Cambridge, Massachusetts. With the input and advice received from these consultations, the board made a few refinements to the proposed struc238 Matthew McKinney

ture and set about creating two separate but complementary organizations — one public and one private, not-for-profit. As a creature of executive order, the Montana Consensus Council is a part of state government. However, it is sometimes perceived as a special program of the Office of the Governor or the executive branch. To broaden its ownership and to further legitimize the role of consensus processes in building agreement on public policy, the board of directors drafted legislation to establish the Montana Consensus Council as a statutory entity. This would reinforce and extend the council's connection to existing institutions for shaping and implementing public policy by providing recognition and authority from the legislature. The bill passed the Montana Senate by a margin of greater than two-toone, but it later died in the House of Representatives on a vote of 50-50 (a simple majority was needed). Although this result was disappointing, it significantly raised the visibility of consensus building; it also laid the foundation for additional discussions about the best way to structure and finance the council, and particularly how to link the council to existing policy-making and -implementing institutions. On the private side of the equation, a separate not-for-profit corporation was created in January 1997. The purpose of the corporation is to support the council by supplementing its consensus-building services and raising private funding. As currently envisioned, the corporation will distribute funds annually to the

The Challenge Funding Consensus Building Processes

Montana Consensus Council to match public funding. In addition, the corporation will explore the viability of creating an endowment to provide a sustainable source of funding for the council. For the immediate future, funding for the Montana Consensus Council will continue to be a mix of public and private sources. The 55th Montana Legislature has approved an annual budget of about $200,000 for the council for the next two years. Of this total, $66,000 (or 33 percent) will come from the state's general fund, and $134,000 (or 67 percent) will come from foundation grants and fees for services. The Northwest Area Foundation has recently made a five-year commitment to support the council; the Liz Claiborne and Art Ortenberg Foundation has made a three-year commitment; the Hewlett Foundation has made a two-year commitment; and the Fanwood Foundation provides ongoing annual support. In addition to relying on a combination of government funds, philanthropic donations, and fees for services, the Montana Consensus Council has investigated several other mechanisms that could potentially fund consensus-building forums.5

Advantages and Limitations of the Structure The strategy of combining funding from the public and private sectors is based on the limitations inherent in relying on any one source of funding. The public-private partnership enables the Montana Consensus Council to diversify its funding sources, thereby solidifying its finan-

cial base and year-to-year viability. This structure also improves the council's ability to maintain and enhance its relationship to the existing structure of governance in Montana, and expand its identity and legitimacy in the private sector; at the same time, it provides a unique model for privatizing selected services of state government. Moreover, the public-private partnership enables the council's form to mirror its function — providing opportunities for people from the public, corporate, and nonprofit sectors to come together to build understanding and seek agreement on public policy. Despite these advantages, the public-private partnership model is not without limitations. It is often difficult, for example, to explain how the two organizations will work together. It may also be cumbersome to manage two separate organizations depending on how the role of the not-for-profit corporation evolves. Perhaps the greatest limitation is the perception that the council is unfairly competing with individuals and groups in the private sector that provide similar services and rely almost entirely on fees for services. Some private practitioners have suggested it is inappropriate for a government agency to charge a fee for service. Other critics claim that the council has an unfair advantage because it receives a portion of its funding from the state's general fund. In response to these criticisms, the council is working with private practitioners to define its roles and responsibilities relative to private practitioners, and to explore how the council and private practitioners Negotiation Journal July 1997 239

together can tap into and fund the processes and public involvement latent demand for consensus-build* processes (which narrowly seek the input and advice of affected paring services in Montana. ties), how to assess when a. consenEducation as a sus process is appropriate, how to Complementary Funddesign and manage an effective conRaising Approach sensus-building process, and when As Szanton (1989) has observed, a and how to select a facilitator or widespread lack of understanding of mediator. This strategy is designed to consensus-building services often complement the growing supply of translates into a lack of demand. If individuals and organizations willing individuals and organizations better to facilitate public policy consensusunderstood the costs and benefits of building forums, and an almost overusing consensus processes, relative whelming number of seminars to other processes for shaping and teaching people how to facilitate and implementing public policy, they mediate disputes. might be more inclined to use and pay for professional services. Unfor- Implications for the tunately, very little empirical Profession research has been conducted on the Given the critical importance of actual costs and financial benefits funding, it is surprising that very litgenerated by using consensus tle attention has been devoted to the processes to build agreement on issue in the professional literature public policy (Lach and Hixson (Honeyman 1995)." There is little to 1996). It is critical to develop ways no empirical research on the advanto assess the tangible and intangible tages and limitations of how differvalues generated by consensus ent consensus-building organizations processes, including improved work- are funded (McKearnan 1996). ing relationships and a stronger There is a strong need for more syssense of community. tematic research, thinking, and writWhile it tries to develop a frame- ing about funding consensus work for measuring the costs and processes to build agreement on benefits of consensus-building public policy. In the meantime, orgaprocesses, the council is taking addi- nizations can learn a great deal by tional steps to increase public aware- sharing stories — the hard-won ness and understanding. It sponsors insights gleaned from efforts to training, education, and research pro- improve the understanding of and grams to help potential participants funding for consensus-building understand the dynamics of consen- processes. We hope the lessons sus processes and how they supple- learned by the Montana Consensus ment the more formal, conventional Council will be useful to other pracprocesses of making and implement- titioners, citizens, and policymakers ing public decisions. These programs committed to promoting the use of teach participants the difference consensus processes for making and between genuine consensus implementing public policy. 240 Matthew McKinney

The Challenge of Funding Consensus-Building Processes

NOTES Several individuals have critically reviewed earlier drafts of this manuscript and provided useful insights, including Andrea Brandenburg, Will Harmon, Chris Manos, Sarah McKeaman, Patrick Field, and Larry Spears. I greatly appreciate their time and suggestions to improve the essay. 1. Although it is often difficult to get participants to help fiind the design and management of consensus-building forums, this source of funding has a number of advantages in terms of building agreement on public policy. It gives participants the opportunity to practice negotiating with each other before engaging in a conversation on the substantive issues in question. It allows the participants to learn about each other's negotiating style, and can demonstrate the good-faith commitment of the participants. Moreover, agreeing on how the costs of the consensus process will be shared increases the commitment of the participants to the process. And if the decision is to jointly fund the services of an impartial convener and facilitator, this builds joint ownership of the consensus-building process, while improving the actual and perceived impartiality of the convener and facilitator in the eyes of the participants. 2. For a list of states that have created some type of government agency to promote the use of consensus approaches to conflict resolution, contact the National Institu'e for Dispute Resolution, 1901 L Street NW, Suite 600, Washington, D.C. 20036. 3. For a representative sample of these organizations, see the advertisement section of a recent issue of Consensus, the quarterly newsletter published by The MIT-Harvard Public Disputes Program. 4. One example of this type of public corporation is the National Fish and Wildlife Foundation. This foundation, which receives most of its funding from the U.S. government, was created by Congress as a charitable and nonprofit corporation, and does not operate as an agency or establishment of the federal government. 5. For example, encourage the legislature to fund consensus processes on a case-by-case basis; invite individuals and organizations to become "members" or "friends'' of the consensusbuilding organization; establish contingent-fee mediation; develop a reputation for consistently providing high-quality services; and develop and sustain relationships with clients and funders, including legislators, foundations, and other contributors. 6. A review of the articles published since 1986 in Negotiation Journal turned up only one article on financing consensus processes. REFERENCES Honeyman, C. 1995. Financing dispute resolution. Report for the William and Flora Hewlett Foundation, Menlo Park, California. Lach, D., and P. Hixson. 1996. Developing indicators to measure values and costs of public involvement activities. Interact: The Journal of Public Participation 2 (Spring): 50-67. McKeaman, S. 1996. To stay in business, diversify your income and market yourself with a personal touch. Consensus, no. 30 (April): 5. National Fish and Wildlife Foundation. 1984. Public Law 98-244. Szanton, P. 1989. Public policy mediation: status and prospects. Report for the William and Flora Hewlett Foundation, Menlo Park, California and the National Institute of Dispute Resolution, Washington, D.C. Editor's Note: Readers' responses to the negotiation problem Robert McKersie posed in the April 1997 issue ("What Would You Do About the Bill for Dinner?") will appear in the October 1997 issue.

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