Long ago, in the early years of my career as a reporter, I worked in the original nonprofit sector of journalism — public broadcasting. Public television stations are known for their incessant pledge breaks begging for money — after all, they’re nonprofits, dedicated solely to the public good, right? How else are they going to stay on the air?
That explains what happened, at least twice, at a station where I had worked, during pledge breaks in the middle of “Sesame Street.” The person doing the pitching said words to the effect of: “And now, boys and girls, we need you to bring your moms and dads to the television because we have a very important message for them: If we don’t get enough money we might have to take away Sesame Street.”
It was a reminder that no halos come with nonprofit status. Desperation to survive can induce behavior in nonprofits that is as corrosive of common decency as the worst corporate greed.
I tell this story because it illustrates a key failing that undermines the report issued by Senate Finance Committee staff about the horrors inflicted on young people by residential treatment facilities. Instead of emphasizing the financial incentives that prompt horrible behavior by the entire RTF industry, they zeroed in on profit motives, which, of course, involve only for-profit corporations. The implication is that if we just got rid of the for-profit players, all would be well.
Here’s how Senate Finance Committee Chair Ron Wyden put it in his press release:
“It’s clear that the operating model for these facilities is to warehouse as many kids as possible while keeping costs low in order to maximize profits.”
NBC News got that message when they headlined their story about the report: “Residential treatment centers put profits ahead of children’s safety, Senate report finds.”
Of course, adding the profit motive makes everything worse. But it doesn’t create harm that didn’t exist before, it only ratchets up the potential for harm that’s always been present. So while it’s understandable to raise the issue of profit when 80% of the institutions are run by for-profit companies, it doesn’t follow that nonprofits automatically would do better.
It’s easy to fall into that trap. When you’ve got someone like Jay Ripley running chains of hellhole for-profit McTreatment centers and sounding like a graduate of the Charles Montgomery Burns School of Business, it’s easy to overlook the fact that there is as much potential for harm done by people who add a veneer of kindness to their rhetoric and speak only of how much they really, truly care about children. Often, they’ve probably even convinced themselves.
But while for-profit McTreatment chains are relatively new, abusing institutionalized children is as old as institutionalizing children. Consider:
- America is at long last starting to face up to the horrors of the so-called “boarding schools” into which Native American children were forced in a systematic attempt to eradicate Native America itself. While much attention has focused on institutions run directly by government, plenty more were run by a big nonprofit organization: the Catholic Church. In fact, in the entire history of these hellholes, not one was run by a for-profit corporation.
- In New York State, dozens of agencies running group homes and institutions are desperately seeking a taxpayer bailout of up to $200 million to cover the cost of settling lawsuits brought by just a fraction of the children abused in their care. Most of these institutions are nonprofits.
- Remember Maryville, the institution in Chicago that was the subject of all sorts of fawning stories, including one on “60 Minutes,” until it was exposed as rife with abuse? It’s a nonprofit.
Or consider the objects of more recent exposes:
Home of the Innocents, Kentucky: Nonprofit.
Pierceton Woods, Indiana: Nonprofit.
The Lord’s Ranch, Arkansas: Nonprofit.
Pleasantville Cottage School, New York: Nonprofit.
Short-Term Assessment & Respite Home, Connecticut: Nonprofit.
St. Mary’s Home for Children, Rhode Island: Nonprofit.
Indeed, the report’s emphasis on the profit motive, as opposed to the financial incentives that influence nonprofits and for-profits alike, is contradicted by the report itself.
One of the four entities that were the focus of the report’s scrutiny, Devereux, is a nonprofit. But this very contradiction was exploited by Devereux. Leah Yaw, Devereux’s senior vice president and chief strategy officer, says they’re not like those for-profits motivated by filthy lucre! As she told The Imprint:
“We do not answer to shareholders. We do not need to ‘find’ places in our budget to make money. Devereux is a charitable organization, operating in the public interest, and our entire business model is, quite simply, different than the three other organizations involved in this inquiry.”
But while the business model may be different, the results are not. Here’s what The Washington Post found in 2003:
“The streets had prepared Kenny for the (Devereux) treatment center. In many ways, it was a culture he recognized. Tough kids were respected. Weak ones became prey. Kenny was one of the tough ones.”
But that was so long ago. Perhaps Devereux has cleaned up its act. Not according to the Philadelphia Inquirer, which found this in 2020:
“Devereux’s programs had been hunting grounds for predators. Interviews and documents show that, despite bringing in $467 million in annual revenues, Devereux understaffed its campuses and failed to adequately supervise its patients and staff members, who all too often disappeared for hours and slept through shifts.”
Yaw herself let the cat out of the bag. She used a term notably different from “charitable organization” in telling the Inquirer:
“This is not an aberration that happens at Devereux because of some kind of lack of control or structure. This is an industry-wide problem.”
Because so much more attention is directed to the trees of the profit motive, the Senate report doesn’t pay nearly enough attention to the forest of financial incentives at the heart of the problem: the fact that no matter how many children states shovel into these hellholes, in many cases the federal government will keep right on reimbursing a large share of the cost. The states and localities, in turn, typically pay the residential treatment facilities for every day they hold a child in care.
The result is an industry addicted to per diem payments that has a profound vested interest in falsely claiming, both to itself and to everyone else, that the children in their care are simply so troubled that no family can handle them and so troubled that they have to be institutionalized for a long, long time. As the report itself and a mountain of other evidence make clear, neither is true. Residential treatment doesn’t work, and there is no reason to use it at all.
But all those dollars have created a powerful residential treatment industry that scarfs up the money that could be used for better alternatives. Case in point: Colorado, where the industry has lawmakers, the state’s child welfare ombudsman and some media so in its thrall that there was virtually no pushback when the head of the industry’s trade association called for institutionalizing supposedly homicidal six-year-olds.
Wyden didn’t completely ignore these incentives. He rightly says we need to “shut off the fire hose of federal funding” for the industry. But the report offers no specific recommendations for how to do that. In fact, it would be easy: Amend the relevant federal funding streams to bar payments for congregate care.
But when Wyden had the chance, while working on the Family First Act, he accepted loophole after loophole in provisions curbing institutionalization, making those supposed curbs virtually meaningless.
The report is more of the same: recommendations so tepid and so vague that Yaw could say “Devereux strongly concurs” with them.
Of course they do. Because they won’t change a damn thing.
