005 The Hidden Vulnerability of the Nonprofit CEO | Praxis Partner Andy Crouch

Andy Crouch uses a framework from Peter Greer to name a structural problem with honest at the heart of many nonprofits. It's the stakeholder gap, and he argues it creates built-in incentives to not tell the whole truth all the time. And the better you are at fundraising, the more danger you're in.

Andy also traces the 40-year collapse of institutional trust to something deeper than politics: the unmasking of prestige as mere dominance. And he makes an unexpected case that the generation coming into the workforce right now may be the best in decades, if you can earn their trust first.

Andy Crouch is Partner for Theology and Culture at Praxis, a New York-based nonprofit that supports faith-driven founders, funders, and innovators, from early-stage ventures to both nonprofits and businesses operating at meaningful scale across every sector.

Transcript

The Landscape of Nonprofit Leadership

Adam Jeske 0:04

Nonprofit CEOs are constantly making consequential decisions, often under pressure or in isolation. I'm Adam Jesky, the Nonprofit CEO Advisor, and this is the Nonprofit CEO Podcast, where leaders talk about the decisions they carry. Today, our guest is Andy Crouch, author and partner for Theology and Culture at Praxis. Andy, welcome to the show.

Andy Crouch 0:25

Thank you, Adam. So happy to get to talk.

Adam Jeske 0:28

So a lot of people are familiar with Praxis, but for those who are not familiar, tell us a bit about the organization.

Andy Crouch 0:35

Oh, yeah. We work with a lot of nonprofit CEOs, actually, very early stage folks. So we work with entrepreneurs in both the business and nonprofit sectors, as well as the people who allocate capital to business and nonprofits, that is, investors and philanthropists. And what we are trying to create is a community, or you might say, an ecosystem of redemptive entrepreneurship. And more broadly, to kind of awaken the redemptive redemptive imagination of the church. So kind of focus on entrepreneurs, but with an eye on Christians addressing the major issues of our time, especially through venture creation and venture building.

Adam Jeske 1:15

And in the course of your years at Praxis, as well as leading on boards, working in the nonprofit sector previously in a couple of large institutions, you've seen a lot. You've been alongside a lot of other leaders. What do you see today happening in and around nonprofit CEOs that might be disconcerting or concerning to you?

Erosion of Trust in Institutions

Andy Crouch 1:40

Well, the very large-scale trend is the collapse of trust in institutions. I mean, this is a 30 to 40 year arc in the West. And I spend most of my time in the US context, though we work with entrepreneurs all over the world. So most of what I say will be most relevant in the US. And certainly in the US, we have very dramatic polling data that shows that people just do not trust institutions and by proxy their leaders. There is a slight exception, just over half of Americans still feel they can place trust in the military. And slightly over half feel they can place trust in small businesses. But every other category, charitable nonprofits, churches, journalists, which I was for a long time, universities, medicine, public health, like you name government, of course, trust has just completely collapsed. And one CEO that I know well and have worked closely with for many years said, he said, what he's been in his role uh for about 10 years. He said, when I started, he feel he said, I feel like I started at the last moment when you could expect people to trust you because you were the CEO, and it's been all, in a sense, downhill. Uh, that is, there's no more presumption of trust. There's no more deference. People tell him, I'm thinking about this particular uh individual just because I know him well and know his circus heads so well. Uh, you know, people used to hide and hide dissent, I would say, from the person in power. Uh and they do not do that anymore. And this is true on both the for-profit side and the nonprofit side, even in conditions of somewhat precarious employment. There is just very little willingness to um hold back because you're in the presence of the leader. Now, I want to say I don't think this is um all bad because one of the biggest challenges you used to have as a leader is not knowing what people were really thinking. And I assure you you can go on uh Instagram or your toxic drug of choice, social media, and find plenty of people who have things to say about your organization institution. You can go on Glassdoor and read all the reviews of your leadership. Like in some ways, this transparency is healthy in certain respects and certainly useful if you have a thick skin to leadership. And I think a lot of us would feel that perhaps there was a season when institutions and their leaders got too much deference in American life or Western life. So maybe some correction was warranted, but but I will say it's a very it's a very hard time to sit in a seat where people feel very willing to tell you what they think. Dissent is readily voiced, all your opponents are out there in public of small things and big things. I mean, everything from changing, you know, the percentage on the 401k to, you know, restructuring the whole enterprise, people will share their opinions. It's a tough environment to step into leadership every day, I think. Though also a time of tremendous opportunity because if you can actually win people's trust, uh that's very rare and beautiful and uh worth building, I would say.

Adam Jeske 4:59

What do you attribute this erosion of trust, of institutional trust, this degradation? Uh, what do you attribute that to? What are its roots?

Andy Crouch 5:11

Yeah, I've been very influenced by uh an anthropologist, I guess, by training, Joseph Heinrich. I actually have never heard his name pronounced by anyone but me, but he uh teaches at Harvard and has done research there for a long time and has written many interesting books. But he wrote a really interesting paper in the early 2000s with some collaborators on what, in their view, made human beings really unique, and they called it uh prestige hierarchies. So every social system has to arrange itself in some way uh with a view toward who kind of calls the shots, who who makes the decisions, and that's very broadly what hierarchy might mean. And the question is, how do you organize yourself that way? And most primates, um, that is the apes, the gorillas, the monkeys, who are like us in certain ways, they form social groups, they obviously resemble us in some ways. We believe, have good reason to believe there's some evolutionary connection. They organize themselves by what's called dominance hierarchies. And this is basically very straightforwardly, who's the strongest person in the pack? And because of the way uh hormones work and so forth, it's always a male among uh these other primates. And the the strongest male, the alpha male, we've all heard this expression, kind of shows up and demonstrates his strength, and then everybody defers. And that's how it works among the primates. So what Heinrich and colleagues observed is not so among human beings entirely. Now, we can think of warlord societies where very much the strongest person who can command the most force, you know, kind of runs the show. But they said what is really unique about human beings is we actually arrange ourselves, we arrange status, that is, who has standing to influence the community based on what they call prestige. And prestige really is about the ability to have insight into the world that's valuable to the community. So you may be an expert at finding food. Um, you may be a really good hunter, even if you're not the physically strongest person, you can't arm wrestle everybody, but when you give you give this person a bow and arrow, they can like take down the gazelle. But in modern societies, you know how to keep cure or alleviate disease. That would be medical prestige. And in a kind of modern society, a lot of people get positions of status, uh, standing in the community because they are able to uh demonstrate some valuable ability. And Heiner said this is our great advantage as human beings, is we are not just always looking for who's strongest. We're looking, in a sense, for who's smartest uh in many dimensions of that. And so that was as far as Heinrich and company took it. Well, what I think has been happening in the last 20, 30 years is a series of unfortunate events have led most people to question whether we are allocating prestige correctly. That is, people have stopped trusting that when experts say something is true, it's really true. And I mean, we could in one sense I'm only peeling back one layer of the onion here, Adam, and we could go into like specific cases of that. And I think Watergate is a very early defining moment. Watergate slashed the Vietnam War. Uh there's this famous book by Richard Halberston, The Best and the Brightest, which weirdly, I use people hearing that phrase um non-ironically, like, we want to recruit the best and the brightest to our organization. Well, when you use that phrase, you ought to know that the title of that book was could not be more ironic, because it was a story of how a group of largely Harvard-educated men joined the Kennedy administration, prosecuted the war on Vietnam, and led the United States into a disastrous kind of uh foreign venture. And they did it with the most amazing resources of prestige available to them, but both status being Harvard men, but also like computers. They were using mainframe computers and they were like, we've got data that tell us how to win this war. And they they failed in their aims. And the irony is here are the best and brightest of the country, and they lead the country into a kind of um a loss, you know, not just militarily, but in other ways. And then you also have Watergate, right? So what happens is in a series of unfortunate events, ordinary people start thinking, wait a minute, I don't think you're powerful because you're smart. I think you get to claim you're smart because you're powerful. And what happens is the prestige gets unmasked as dominance. Do you see what I mean? That is, we start looking at these arrangements of status, and we're like, you're not in that position because you actually know something valuable to the community. You keep that position by claiming you know something valuable that you're actually just exercising power and keeping yourself in power. And, you know, you could um, you know, post-mortem any given uh set of choices, the choices our public health establishment made in the first year, or in some ways the first two and three years of COVID, what we did in response to the global financial crisis, how we prosecuted the war in Iraq, the second war in Iraq. Like you could look at any of these and you could construct a fairly sympathetic account of what leaders thought they were doing and why they were doing what they thought was best. But you can also construct a pretty powerful account that says sometimes people do things to maintain themselves in power, not because they're actually seeking the good of the community. And that's really what prestige is about in Heinrich's view. It's the trust that you do know something I don't know, and therefore I should defer to you. That has been deeply shaken. And it contaminates, frankly, all kinds of things that are not um, you know, I think a lot of nonprofit CEOs, if they're honest, will say, we are trying to solve very complex problems. I am not some kind of uh all-knowing expert. I am trying to bring some wisdom to this. I'm trying to organize an organization or an institution that that has collective wisdom greater than any individual parts, but you know we're not doing this with kind of godlike knowledge, um, the way that some professions might uh sometimes conduct themselves. But the reality is this loss of trust and the suspicion that it's all really just about dominance has contaminated all institutions. And I will say there's another probably important thing to mention, which is that uh who tends to operate with dominance paradigms, it does tend to be men, uh both because they are physically stronger on on average, uh typically, uh, and because they're socialized to kind of rely on that. And one way they express dominance is by arrogating to themselves uh opportunities for uh advantage over women, including sexual advantage. And so the use of power to uh gain kind of sexual advantage and use relationships, including relationships of power within organizations, there's a lot of that. And in our Christian world, there's been an especially scandalous amount of that given our commitments. It happens all over. I mean, it happens in worse places in in other sectors, but other places don't hold themselves to the kind of standards that Christians and Christian leaders aspire to. And when that comes out, as it inevitably does, it really undermines your claim to be leading out of some position of um good for the community. So that is a very that was a very long answer. And as I say, only like one layer of the onion. But I think that is the long arc of what's happening in Western institutions.

Adam Jeske 12:36

Well, that's not very rosy. The the gradual degradation of institutional trust through the last 40 years or so. Are there counterweights, countervailing pressures, winds that are blowing in a helpful direction, holding back the tide of worse erosion of institutional trust?

Andy Crouch 12:57

I think so. Um I think one is there are more ways to fight isolation as a leader, I think, than there were before. So I see isolation as the hardest thing, especially in the uh CEO seat. And it relates to something I've written about called hidden vulnerability, which is the fact that you are always aware of risks in your system that other people, even those quite close to you in the system, don't fully see. And you can't disclose all of it. And we could talk more about that if you want. But the bottom line is it is a very lonely thing uh to be in this particular role of kind of combined um power and visibility and a kind of exposure, and also to have a bunch of things that you are you know you're exposed to, but that other people don't actually see or feel the way you do. And I think that there was a generation of leaders who it's not clear who they could go to uh to um bear that burden together. And I just see many more affordances now, whether it's, you know, there's a number of organizations that really effectively serve leaders in these positions. And really the basic thing you need is a community of peers who get it. And I think there's more openness to sharing this with a community of peers. You usually can't share the full extent of the burden within the system that you yourself lead. But you can find some other people who are in analogous situations. I meet with a group of men every January, seven of us total, four of us are in CEO seats, others are adjacent in different ways. We are very intentional about sharing everything that's going on in our lives. And there's a willingness to do that, I think, among leaders that I just think it wasn't something people realized they could do maybe 30 or 40 years ago. There's an openness to openness, you might say, uh, in the right settings. I I would say also trust is when trust is earned, it is really extended. And I really am careful about what I call generationalizations. That is, speaking of old generations like Gen Alpha or Gen X or whatever. But to the extent that different cohorts do have different kinds of personalities and styles, my observation about kind of emerging adults, let's say folks who are currently in their 20s, let's just say 20s, is they are actually so eager to find someone they can trust. And the problem is they have good reason to not extend that kind of from the beginning. But if they find an environment where they feel known, honored, involved, included, and they trust the leadership, I just see incredible loyalty and creativity and energy being available. Frankly, that wasn't true of my own cohort, which we sometimes call Gen X. I led Gen X when they were in their 20s in different roles. They slash we were so freaking hard to lead, like so resistant. Like even in environments with really good intentions, just like this kind of skepticism baked into the mindset of the 1990s. Yeah. That's not what I encounter in uh folks in their 20s now. So you do have to earn it, you do, and you have to demonstrate it, and you earn it in ways that are maybe different from previous eras. But once you've earned it, I just see tremendous willingness to be loyal and engaged and committed. And that's a real resource.

Adam Jeske 16:37

Mm-hmm. I think a lot about the structural isolation of the CEO or executive director role. And only a handful of people that I've talked to in the role in the last couple of years have that sort of bedrock community that you're describing. I hear a lot of desperation, frankly, from folks. There's there's appetite, there's hunger, there's an understanding of need, but just how do I find it? Because very high capacity people with even more load kind of asked of them. And yeah, I I find that people are uh often pretty uh eager to jump at the chance for something, but it takes some measure of intentionality from one of them or an outside uh agent to Yeah, yeah.

Andy Crouch 17:24

Somebody has to go first. I mean, this group of seven that I'm part of, there was absolutely one person who took extra initiative and got us going. And um, some of the rest of us, frankly, would would not have like we wouldn't have reached the activation threshold until something really went, really went wrong. We've been meeting for about 10 years now, and lots of things have gone both better than we hoped and worse in different dimensions of our lives. And gosh, you need you need to move on this before you're in the hospital in one form or another.

Adam Jeske 17:56

Yeah.

Andy Crouch 17:56

Uh and like go to the gym rather than to the hospital if you have a choice. And and the gym for leaders is the gym of relationship, of um, of of transparency with the right kind of level of trust with peers. And yeah, uh don't wait. Uh, but it is hard. And it's not natural. And it's it's like all the things that make for sustainable leadership. I mean, leaders need to be quiet and experience solitude. Uh silence and solitude are like one of the most important things for leaders. Who has time for that? Well, in one sense, no one. In another sense, no one survives without making time. And same with relationship. I think it's sort of interesting that the two poles that we need to handle this isolation are actually silence and solitude, which you would think, well, that sounds pretty isolating. I will just say on the other side of silence and solitude is a kind of settledness and insight, as well as clarity about what's going on in your own life and heart. You also need togetherness. And in a way, the ironic thing is you can be very busy in such a way that you have neither of those uh in your life, but you need both.

Adam Jeske 19:06

Yeah, I recently wrote an article that talked to was using the metaphor of uh of a flight. And the way that I thought about and talked about the preparation for this is you need your flight crew in place before you take off. Like the the moment you need other people is not the time to go find other people, right? That's a particular conundrum. Um What are the parts of the leadership of a nonprofit that produce the most vexing decisions in what you have witnessed in your career?

The Stakeholder Gap in Nonprofits

Andy Crouch 19:43

Uh well, there's many kinds of nonprofits. I mean, it's kind of a broad tax structure in many of our societies uh that covers a lot of different things. I have been very influenced by two CEOs who we've worked closely with at Praxis, Peter Greer of Hope International, and then Jenna Leonardella, who for a long time was CEO of Blood Water Mission, uh, and then join joined our team as our partner for our nonprofit portfolio for a while, um, and now does some other really good work. And Peter and Jenna wrote uh what we call the redemptive nonprofit playbook. We we kind of put redemptive in front of everything because we're trying to rethink uh kind of going beyond just ethical work, including ethical nonprofit work, to really transformative. And redemptive would be our kind of Christian synonym for transformative, maybe. And in the introduction to that playbook, they identify something that I think really gets at the heart, the distinctive heart of nonprofit leadership compared to many other forms. And they call it, and we call it the stakeholder gap. So the what this represents is the fact that in many nonprofits, uh, especially what we most readily think of as kind of charitable organizations, uh, those that serve the needy or vulnerable in some way, your payer, the source of your revenue is different from your beneficiary, as we often call it. And this is not true in most businesses. In most businesses, your customer pays. The person who's benefiting from your product or service pays you. And that gives you this very high fidelity and very real-time signal of whether you're creating value in the world. In much um kind of charitable work, um, as it's most commonly understood, even though, by the way, probably two-thirds of nonprofits in the US don't really out there, there are things like universities where in a in a sense like the parents pay or the government pays for research, um, or they're they're actually local churches that uh the congregation gives and the congregation gets religious services from the organization. Like you pay your synagogue dues and you go to synagogue and have a seat or whatever, you know. Um, and uh and then arts institutions where your patrons are your are the customers in the seats. But but thinking about kind of um, you know, uh social services. Service and uh relief and development, um, you have this huge gap between the people you are genuinely seeking to serve and the people who actually give the organization the resources to do the work. And this gap creates so many incentives, uh, essentially to not tell the truth. And I think in some ways, all of life comes down to how much of the truth am I telling how much of the time? And when you have the stakeholder gap, you've got your donors, and they imagine the world a certain way before they encounter you. You have your actual program teams who are encountering another part of the world that desperately needs people to care, to be involved, to pay attention. But what they're seeing of the world inevitably is at a gap from what the people who are ready to write a check and have the capacity to write a check imagine. We just all know that's true. And that gap, if not bridged with a lot of creative uh wisdom, creates all these bad incentives for organizations to tell donors things that are happening that are not really happening, to provide beneficiaries, quote unquote, services they don't really need or want because the donors need and want to see that those things are happening. Like we all know how this works. And I just think over and over, I mean, very broadly, I think the challenge to organizational life is can we tell the truth about who we are, what we're doing, and what's possible? Um, and and what what's both possible as in ready to hand, and what kind of vision could we actually achieve together? But can we do that truthfully? And uh, it's so hard in every organization. The thing is, in business, you have this iron feedback loop of revenue reported on a monthly, quarterly, annual basis, often reported to external um, you know, investors and so forth who really have a stake in it and do not have a lot of tolerance for the signals going in the wrong direction. And in nonprofit work, none of those linkages are tight. They're all very loose. Uh, sometimes they're practically non-existent. And here's an irony the better you are at fundraising as a CEO, the more danger you are in of the stakeholder gap. Because the more you're able through, in a sense, charisma and vision to raise the resources needed, the less linkages you create between the raising of the money and the doing of the work. So I've just seen over and over how hard it is to uh close that gap, how how creative you have to be, because um, you cannot always bring your donors to the field. Uh and I mean, I think a lot of organizations do that to an extent uh for major donors and well and good, and and those are often valuable. But what we know, even they're often called, at least in my corner of the world, vision trips, um, where you kind of bring your donors to see the work you're doing. But we all know what you see is not the work. You see the presentation of the work. There's a gap even in the vision trip experience that's just inevitable. So that's the the heart. That's the heart of the matter, I think.

Adam Jeske 25:06

Yeah, I was interviewing the executive director of uh the community food club in Grand Rapids, A.J. Fossil, yesterday. And we were talking about this dynamic, and I was picking up some things, and so I asked her, how do you stay attuned to the people that you serve? They they call them members. Um it's a sort of a grocery store model. You pay with points, you pay a small fee per month to be a member of the food club. And they operate like a grocery store. And so they do have point of sale data about their members. Built in some of that feedback. Yeah. So they have some of that.

Andy Crouch 25:44

They're not just handing out food that we think people want. The people are picking the food off the shelves. That's great. I love it.

Adam Jeske 25:50

That's right. But then she also has some of her board for the organization, our members. I think it's uh it needs to be at least a third. And then she also has a member advisory board or advisory council that is simply meets monthly, comprised entirely of members, where she can take questions, her team can take questions. Do you know of other novel approaches to try to inoculate an organization against the stakeholder gap?

Andy Crouch 26:18

Yeah, those are really good ones. Board representation uh, I think is a central one, and a lot of organizations have moved in that direction. Uh, one other thing I would highlight is who tells the stories of the organization's work. And how much can you entrust uh the telling of the story to your beneficiaries without unduly interposing your marketing communications team? Uh now, marketing communications is a valuable function in an organization, but how much can you kind of hand over the reins of that to people who uh have been beneficiaries of your work, the more you can, and the more kind of touch points you give them in the process of telling the organization's story, the more the gap is closed because um they are now kind of uh in their own voice articulating whatever benefits you provide and what needs you're addressing. And, you know, that's possible to a greater and lesser extent depending on all the particular circumstances. Um many organizations work across language barriers, such that their donors speak primarily English most often, and their beneficiaries speak other languages. So you have to work with that. But I still think deeply involving beneficiaries in communication is a big opportunity. I also think, and it's kind of present in that example, just uh I think we've all seen the value of having some skin in the game for everybody and new models of charity that are not handouts, but are participatory and that reflect the fact that actually if you're delivering something of value, people will pay for it. They may not pay a market rate for it, they may not pay what middle class or upper class people in their society can pay, but they will pay. Uh, they'll pay for education, they will pay for a bed net for mosquitoes, they'll pay for food. I mean, people allocate their resources. And the more you can build in uh actual payment flows, the more sure you can be that you and your organization are doing something that's of real value. And you may have to calibrate that to the means and ability of the people. And there are some settings, I'm sure, where this breaks down. Refugee camps, perhaps where there's no facility for earning income and that kind of thing. But but even refugee camps have informal economies. So I don't know. I just think I've seen, we've seen it practice a lot of creativity. I would say very few of our startups that we work with have a kind of pure charity no-pay model. I think all of them have one way or another for their beneficiaries to have skin in the game, even in very, very tough environments, kind of the cruelest edges of the world. So, yeah, that's another kind of important vector.

Adam Jeske 29:05

In a couple of your books, Plain God and Strong and Weak, you deal with themes around power. And uh particularly in the nonprofit sector, and maybe even more particularly within the faith-based nonprofit sector, there's often uh a discomfort with power. How do you see that playing out with uh the more established uh nonprofits that you've been involved with? And then uh any ideas, counsel for those who are uh early stage who are launching.

The Interdependence of Communication and Power

Andy Crouch 29:40

Well, power is just a reality in any human encounter. The question, and I define power most broadly as the ability to make something of the world. So that which happens to also be how I define culture. Culture is what we make of the world. Power is the ability to shape culture in both its material manifestation, that is the actual stuff we make, the ways we rearrange, the materials we we find around us for our good and others' good, ideally, uh, and the meaning we make. What we make of things is also the meaning. And power is the ability to actually rearrange stuff. Uh sometimes that involves physic, literal physical kind of ability or or you know, enough uh physical capacity to move stuff around. Uh, but it's it is most often most deeply the ability to make meaning. And there is no human system in which everybody gets the exact same amount. Nor, in my view, should there be or can there be, because we have different capacities. We come to our shared kind of common life and work at different stages of life. Uh, a baby absolutely has power. By the way, I have a I have a six-month-old granddaughter as of this week. And there's not a lot she can do, but I can tell you, she can make something in the world. She can rearrange the social environment with her sounds of alert for her parents and with her laughter too. I mean, there's in some ways, there's no person more powerful than a baby. If a baby walks into any is brought into any room, like watch where the eyes go, watch where the attention goes, watch the affection goes. Yeah, we're wired for it. Yeah. So so it's not that uh the young have no power, but they have different kinds. There are other things that my granddaughter cannot do at all, such as form language and therefore influence how other people narrate their world. And then there are some people who are good at talking. Uh I maybe uh podcasters are among them, right? And uh the reality is not everybody's equally good at talking, and then there are other things we are good at talking are not good at doing at all that are big cultural contributions. So it's just uneven. And I actually think it's it's blessedly so. I think we're meant to be interdependent, we're meant to need each other, we're meant to need each other's gifts. So then the question is: are we honest about this? Do we account for it in how we operate in the systems that we're in? That is, do we account for its uh genuine potential for good and its potential for uh abuse and misuse? How does that work in organizations? I think when it works well, those who are entrusted with different kinds of power both can say and you kind of see in their behavior, they see it as an opportunity for to help other people flourish. I what I think power is for is flourishing. That is the fullness of all those varied abilities and varied contributions people can make. And when people in power, and this isn't just the CEO by any means, uh, see their power as an opportunity to help other people flourish, trust grows, creativity grows, uh, capacity grows. When people start to use their power to protect things, not so much to help other things grow, but to hold on to any number of things. And this can be as varied as the reputation of our organization. When your reputation is no longer a kind of byproduct or an out, uh like a side product of the real thing you're doing, that's good. When your reputation becomes something you are primarily using your power to protect, that's a problem. So uh when you start protecting things, you it can be it can be system-wide or it can be very personal, protecting your own reputation, protecting your own power. The ways this can go wrong are numerous. And when it does, either there are mechanisms to help us correct relatively quickly and with relatively little cost and trust. There's ways to repair it, or there are no such mechanisms and things just spiral out of control until there's some real rupture through some kind of flagrant misuse or abuse of power that's so clear that the system can't ignore it anymore anymore or can't cover up for it anymore. And that's what does such terrible damage to organizations and individual leaders. I am at risk every day in everything I do, including this conversation of misusing the unique abilities and position that I have in the world. And to the extent that I'm healthy and am in healthy systems, there are other people around me who, in small and gentle ways, will just redirect when I'm starting. I mean, it can be as simple as sitting a meeting and not fully paying attention. Uh, because when you're of a certain level of power in organization, you can get away with that, right? And people won't necessarily correct it. And I find myself doing that from time to time. And I'm so fortunate that I have uh colleagues, including my boss, my CEO, who will say they noticed. Uh, I mean, that's a very small thing. It doesn't like create, it's not a long conversation. And they're right. And I, it gives me a chance to change course. But gosh, if I were insulated from that one way or another, or we're in a system where there wasn't enough collective trust to ever confront those kind of behaviors, and everybody knows most of the people in the meeting are on email, but no one will say it. Oh my gosh, like you're you're on the road uh to ruin in the long run, even for a small thing like that. So great organizations have really simple, low, uh, low energy, like it's not a big deal to say, to name something that wasn't quite right, especially relating to the use of power, and just to call us all back to the kind of presence we want to have on our best days.

Adam Jeske 35:35

What about leaders who fall off the other side of the horse and are reticent to utilize their power in ways that lead to flourishing for others and thus are leading to outcomes with less flourishing because of the absence of use, the reticence to use power?

Andy Crouch 35:54

I'm I think this is a huge issue. Uh in fact, I think it's um as bad as the abuse of power is, and and I would never want to minimize especially the worst examples of it, uh, the more chronic and widespread problem is the lack of willingness to exercise the power we rightly uh own and hold. Uh and that's again true not just of people and CEO seats. In fact, in some ways, I see it in organizations at the kind of junior and middle levels uh the most acutely that that people come in very unsure. And when you're early in your career or or you're just new, also, there's many different ways to be kind of junior or low in the status uh kind of hierarchy. I see so much, and I this is something I think does wax and wane with different cohorts, also. And I it might be waxing right now in some ways. Uh, I see such reticence to like jump in and try to contribute. A lot of need to be told, like what's safe and what's approved. And that is such a loss for organizations. But then I also see so many organizations tolerating it and assuming it. I worked for an organization. I want to be careful in not being very specific because I have been grateful for every job I've had in every organization I've worked for. But I worked for one where there were some very, very uh accomplished and credentialed senior staff, and there was a cohort of um very, very talented junior uh support people. And just chronically, in meetings, the support people never spoke ever. These were not dumb people. These were not incapable. They'd been recruited because of some capabilities. And out in the world, like if you met this person in a sort of generalized environment, this 25-year-old, let's say, worked in this kind of support function, you'd think this is a really sharp person, like she's got a lot going for her. But then you put her in this system, and everything in the system just said, you don't have anything to contribute in this setting. And so, in a sense, the leader sets the tone for this. When leaders are are reticent, when leaders hold back in various ways, it kind of signals really we're about protecting things here. We're not about the risk that's involved in all creative work. All creative work is a venture. We love the word venture praxis, not just because some of our folks take venture capital, because venture is you know such a good word for what it is to try to do things that matter in the world. It's uh it's an adventure, also, right? And all ventures require ideally everyone to be risking every day in some way. And in a way, your your job, if you're in a relatively senior role, is to be the most adventurous. And uh, not of course in a kind of chaos monkey way too uh or chaos Muppet way to too much of an extent. There's a limit to what your organization can stand. Uh and I do say, having worked for a bunch of CEOs who were who had lots of ideas, you know, it's a mixed blessing to walk into work every day with someone like that. Um, but on balance, I'd rather have somebody who's like out there risking, uh, of course, willing to see that it's not working and change course. Um, that's another kind of risk to say this thing that we invested some effort in really isn't right. Let's rethink. Because that gives permission to the whole or the whole organization to start uh risking themselves. And that's what it takes. Like there is this thing. I I think I might have heard this once in an early organization I worked for, visiting a headquarters office. And one of the vice presidents said, it works like a well-oiled machine. And I just have to tell you, if that ever was an accurate or helpful metaphor for organizations, the day is gone. Like the world is not, it never was a machine. Yeah. The era of kind of industrial models for organizations, it may have worked in certain ways in the mid-20th century. It does not work now. It's an adventure, is what it is. And there's no such thing as a well-oiled adventure. And yet that's what we've got to be doing. And that requires actually the exercise of power, not power as domination or subordination, but power as creativity, power as seeking other people's flourishing. When people do that, uh, you start to see really cool things happen uh that you couldn't mechanize and you couldn't have designed that way, but they still happen in beautiful ways.

The Importance of Small Cohorts in Growth

Adam Jeske 40:28

It's interesting to consider the calibration of risk being one of the key responsibilities of top leaders. Yes. Yes. I I like what I have seen from uh from your CEO, Dave Blanchard. I think I've heard you say it, but the concept of re-risking, uh, which is very much attuned to that uh that venture motif. One thing that I'm I'm curious about regarding Praxis's praxis is the the focus on incubation startups, early stage ventures, because I find myself, my redemptive imagination is often stoked by more established enterprises, the nonprofit sector being $1.5 trillion, and the the need for new ways of thinking, new ways of operating in established enterprises. Why has Praxis stayed focused in on new ventures, small ventures, and even small cohorts? I know that it's been expanding to some international uh gatherings and cohorts. Why has Praxis held that focus throughout its history?

Navigating the Future of AI and Technology

Andy Crouch 41:37

Well, I would answer the two parts slightly differently. So I think small cohorts are the only way real growth and transformation happens, no matter what we're talking about. I think the world has been built by circles of three, 12, and 120 people over and over through history. And uh I have a particular reason I use those numbers, and they're not like three is the circle of total trust, and it can be two, it can be four, but never one. Like at the heart of every creative initiative, there's a tiny group of people who deeply have come to believe in each other and believe in this thing that they're trying to bring into the world. And they bring around them about a circle of 12. And 12 is important, and this is the size of all of our cohorts. All of our cohorts are 12 ventures. It can be more than 12 people because we uh admit co-founders often. In fact, we prefer co-founders in many ways. So, say up to 24 people, but 12 organizations at a time. And the magic of 12, if you want to put it that way, is 12 is about the number of people that we can actually pay attention to simultaneously at a kind of deep level. We can know what you're thinking and more or less what you're feeling in a circle of 12. I can know that for all 12 people are in the circle at once as we talk about a problem or engage with something. You get much more than 12 and you start to lose track. That's when people start checking their email and meetings because you really can't keep track. It's Adam actually dialed in right now. I don't know, there's 25 people in the room. With 12, you know. By the way, on Zoom, it's like four. So Zoom and virtual settings, uh, it's a much small smaller circle. And then you have this kind of wider circle of about 120. And the truth is, any effective large organization in fact decomposes its work into circles of 312 and 120. It's just there's a bunch of them and they're assembled into a kind of organic structure. But this is why, like you're crazy if you have 20 direct reports. Uh, you you will not be able to keep track, you won't be able to hold effective meetings. You're also crazy uh if you only have, you know, if you only have one, you're probably missing an opportunity for joint attention and kind of input and diversity of perspectives that you need. The reason we do things in small groups, we believe that for our mission to happen, which is for really transformative work to be done in the world in the hardest places and the most broken systems, which is what redemptive is kind of a description of, it's going to take really deep personal transformation. And that happens in these small groups. Now, why have we focused on early stage ventures? Well, not because we believe they should stay small. So we don't have a particular bias to scale. We don't think big is automatically better, but we certainly want, and we select, we only admit about 7% of applicants to our programs. And we absolutely select for can this grow in a meaningful way beyond just a single-celled organism in a way? Can it grow beyond its 312-120 starting point? So many of the organizations we work with will one day be, and having done this for 15 years now, some of them already are pretty large-scale organizations, if not yet institutions. And so that's all great. We just believe that there are degrees of freedom available at the beginning of a venture that are very hard to recapture later on. And so much of the, if you will, spiritual DNA of an organization is set by its founders. And in fact, you know, we talk at praxis about redemptive businesses or redemptive nonprofits. And one of my axioms that I have yet to really see a counterexample to is that there are very few organizations that ever exceed the kind of redemptive capacity of their founder, uh, that, or that exceed the kind of moral excellence and vision of their founding community. It's never an individual, even when it's remembered as an individual. It's always this little circle. And we just love being present when there's still that degree of freedom, honestly. Um most organizational leadership past the scale we work on is change management. It's figuring out how to move past some patterns that have become established into new patterns. And that's so important. And we learn a lot from people who lead that way. We have the mentor in our programs. So we have large organization leaders mentoring our founders. But our own, you know, the Catholic Church has this word charism. It like means the specific thing that God made you to do. And we just feel like there's a place for the very beginning. And we're just that's where we want wanna be. Uh it's not because it's the most important, it's just part of the picture. Does that make sense? I, you know, I we certainly we we know they're gonna grow. We know where they're we know they're gonna have growth pains, we know they're gonna need change management, and we know there are amazing resources out there for those. Uh the other thing I would say though is that that um you do have more resources when you're bigger. Like you, you can you can uh differentiate more. Uh, you can hire a human resources person to really know how that works. When you're starting, you are so, I mean, as lonely as CEO is for any size organization, the entrepreneur is so alone in what they're attempting and what they think is possible in the world. And we just really want there to be a community for people who are doing this unbelievably risky thing of doing it initially almost by themselves with just a couple of them involved. So that's why we would focus where we do.

Adam Jeske 47:10

Yeah. Uh I would be remiss if I didn't ask at least briefly what you're currently writing or most enjoying thinking about. Like what's top of mind for Andy Crouch in 2026.

Andy Crouch 47:25

Well, definitely top of mind is modern AI. So these big breakthroughs that have allowed these generative models, language above all, but visual as well, and other things to be so amazingly uh emergently intelligent. I don't I don't have any hesitation in saying they're they're reasonably intelligent. Uh and I am, you know, trying to uh uh for the most part right now interact with people in and outside of the AI space at the big front, what they call the frontier labs, but also implementing it and maybe eventually writing. I haven't done we we we did uh Praxis did come out with a kind of white paper about what we call redempt a redemptive thesis for AI and how it can be used really truly for good and to repair some damage that previous waves of technology have done. One click inside that is just my increasing conviction that we've got to get clear on what we want technology to do for us and what we do not want it to do for us. And in in productive environments, that is, places where we're trying to kind of bring good into the world, especially at scale, I see a lot of room for these models to be very, very helpful. Um, though there's some interesting twists and turns with how helpful they are and uh what happens when you turn them loose. But but I I think absolutely they clearly have an immense uh potential. But there are other environments where I think they could not be less helpful. And those are what I would call formative environments rather than productive environments. So productive environments are where we're trying to bring something that we know how to do into the world. So I write a book, I want to kill a bunch of trees and print it and bind it and get it into thousands of hands. That's production. But how do I become the kind of person who can write a book worth killing trees for? That is formation. And when it comes to formation, I think we've been making huge mistakes for several generations now of letting these technologies that are so good at efficiency, so good at reducing friction, so good at doing things for us, like letting them into the formative environments uh where people become people and people become the kind of people who have something to offer the world and one another. That includes the home, where I just think we're way too easily want efficient homes. Uh, your your home is not a factory. That includes the school. Uh, school is where we join a culture and become deeply knowledgeable about what we've inherited. That's not a factory. And uh, for those of us who are religious uh places of worship and and uh religious communities, uh, which are not factories, but we're treating the whole world like a factory, like optimize your life in every way, reduce the friction in your life. And I would say to the extent your life is about being productive, go for it. But to the extent your life is about being formed to become a kind of person who has something worth offering, don't bring a forklift to the gym. So uh I've got a lot of opinions about this. I'm trying to calibrate them based on what I'm learning from friends who are working very closely in this industry and just trying to figure out, you know, is there anything I should kill trees for, basically?

Adam Jeske 50:32

Fascinating. I'm glad I asked. I like that distinction between productive and formative activities, and it is particularly well suited for one and really dangerous on the other.

Andy Crouch 50:43

Exactly. Exactly.

Adam Jeske 50:45

Andy Crouch, partner for theology and culture at Praxis. What do you love about your work?

Andy Crouch 50:52

Oh, uh, most of all the people I get to be with such amazing people, both on our team and in the community that we serve. I love the relative unhurriedness of it. Uh, we make time for pretty in-depth stuff. And um I I love that and I love what comes from that. I love learning and working, I work with entrepreneurs in I think literally every sector. I doubt you could name a sector where we haven't had a venture or two from fashion to the military to biotech to agriculture to, you know, medicine. And I just love learning uh from people who know a whole lot about something I know very little about. So those are some of the things I love.

Adam Jeske 51:40

Andy, thank you for joining us on the Nonprofit CEO podcast.

Andy Crouch 51:44

Such a pleasure. Thank you.

Adam Jeske 51:46

Everyone, if you know a nonprofit CEO who's carrying something significant, send them the show. And if you want more of the patterns that I'm seeing across hundreds of conversations like this, you need the nonprofit CEO briefing delivered weekly at nonprofitceo.com. I'm Adam Jeski, the Nonprofit CEO Advisor. Thank you for what you're leading.