The Bad Business of Planned Parenthood

by Mauricio Roman

Despite profits of $85 million in 2008, Planned Parenthood is facing serious financial difficulties. According to a recent Harvard Business School case study, Planned Parenthood Federation of America (PPFA) is structured as a 501(c)(3) non-profit organization with multiple affiliates, each of which is also a 501(c)(3) non-profit. The national entity lobbies on national policy, sets affiliation standards, and leases its "Planned Parenthood" brand to affiliates, each of which has its own independent board and management structure, and so enjoys independence in its day-to-day operations.

Internally, Planned Parenthood's difficulties stem from the uneven strength of its affiliates, and President Cecile Richards is worried. According to the Harvard case, her organization faces "tough economic times, a hostile political environment, and limited ability to raise philanthropic dollars in a resource constrained area of the country."

What does a "hostile political environment" entail? For one thing, past government funding of crisis pregnancy centers and abstinence-only sex education programs. No industry likes a product that can become a substitute for the one it sells. From this perspective, abstinence is a substitute for contraception, and adoption is a substitute for abortion. Unable to grasp that these are morally superior options to abortion, Planned Parenthood sees them only as threats to their established position. It's not difficult to understand why: Young women seeking contraception account for 60 percent of Planned Parenthood's total clientele, while abortion is provided to 10 percent of its female customers. Even allowing for overlap, that's 60 to 70 percent of Planned Parenthood's customer base.

Happily, in some regions, Planned Parenthood is failing badly at its goal of countering the "hostile political environment." The Florida Association of Planned Parenthood Affiliates (FAPPA) laments that "while we worked hard this session to zero-fund the $2 million appropriation for so-called crisis pregnancy centers in Florida, we were not successful in its defunding."

Difficulties such as these are driving down the number of Planned Parenthood affiliates, from 163 15 years ago to 91 in late 2009. And according to the Harvard case study, this consolidation is expected to continue with several of the remaining affiliates discussing mergers... Read the whole article.