Philanthropy Journal – Blue critic off base

By Todd Cohen

Martin Eakes, a leading voice for progress in North Carolina’s nonprofit community, seems to have forgotten his entrepreneurial roots.

As founder and CEO of Durham-based Self-Help, Eakes has championed innovative and nimble business strategies to boost investment in low-income and minority communities.

But as co-chair of a watchdog group tracking plans by Blue Cross to become a for-profit business – and create what likely would be the state’s biggest health philanthropy — Eakes has shown he also can be narrow-minded and inflexible.

Eakes built Self-Help into a $700 million-asset lender with the backing of big banks and foundations endowed with wealth created by Big Tobacco and other industries.

Yet he has opposed Blue Cross’ conversion by attacking the same commercial world that has fed his own nonprofit dream.

Last month, at a public hearing on Blue Cross’ plan, Eakes said Self-Help “will never convert to for-profit except over my dead body.”

Blue Cross “has lost its soul,” said Eakes, who said he believed there was “not a single person in the leadership of Blue Cross who sees their work as their life’s mission to slug it out for the next 25 years on behalf of underserved, uninsured North Carolinians.”

The only reason Blue Cross wants to become a for-profit business, Eakes said, is so it can “acquire companies and be acquired.”

He also likened the conversion fight to a holy quest.

Treating nonprofit and public assets with integrity, he said, “almost has a religious value.”

For all his skill in tapping corporate and commercially-rooted foundation wealth to give minorities and the poor greater access to capital, Eakes seems blind to marketplace realities, blinded by the success of his own nonprofit and unable or unwilling to see that integrity can exist outside the nonprofit world.

He dismisses out of hand Blue Cross’ claim that it can best serve customers and the uninsured by selling stock and raising the capital it says it needs to grow and compete with for-profit insurers.

That’s a sad irony because, as a successful social entrepreneur, Eakes is a poster child for a new generation of nonprofit and philanthropic dealmakers who have pioneered new ways of doing business to take on huge social and economic challenges.

In assessing Blue Cross’ plan – which reflects compromises the insurer made in the face of criticism by watchdogs, regulators and its own parent association — Eakes should reflect on the experience of his own nonprofit.

Self-Help has been able to give thousands of Americans a helping hand in reaching for the dream of owning a home or business because it has embraced and adapted itself to the marketplace, forging pragmatic partnerships with the corporate world.

As a nonprofit already akin to a business, Blue Cross has concluded its rates would rise, its coverage and service would erode and it would fall prey to stronger and predatory out-of-state insurers unless it can convert to a for-profit company now.

A clear casualty if Blue Cross remains a nonprofit would be the huge new statewide health foundation the insurer’s conversion would create. Unless Blue Cross turns for-profit, the foundation will be stillborn.

No one can know for sure what will happen to health insurance and health care in our state if Blue Cross converts or if it remains a nonprofit.

One thing is certain, though: Instead of insisting his way is the only way, Eakes would do North Carolina a great service by putting his entrepreneurial know-how to work to help find common ground that both lets Blue Cross thrive and fosters better and more affordable and accessible health care for North Carolinians.

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