Government Funding of Nonprofit Organizations: Considering Equity

Government Funding of Nonprofit Organizations:Considering Equity

Harben Porter, Andrea Schiavoni, Brian Wiedenmeier, and Kristen

Wolslegel

PA 744

May 8, 2013

Key Considerations

Equity: a general sense of fairness, derived from democratic principles.Government, market, and nonprofit sectors: their unique roles, and instances in which they may be in opposition to one another.Human services perspective: limiting the scope of this analysis to human service functions, is there a moral imperative to achieve equity in funding?

Historical Perspective

• New Deal

(1930s)

• Great Society

(1960s)

• Devolution

(1970s-2000s)• American

Reinvestment and Recovery Act of 2008

• Sequester

(present day)

AssumptionGovernment is viewed as a promoter of equity in contrast to the nonprofit sector’s presumed focus on particularism… (Garrow, 2012)

Three Big QuestionsShould the pursuit of equity through funding

should be a primary goal of government?

Does the government have an obligation to ensure equity through the contracting process?

If so, is it fulfilling its obligation to maintain balance in our system?

Two PerspectivesConstitutional Theory Public Goods Theory“the solid happiness of

people”- the end to which all other concerns must bend

Constitution not only permits but requires benefits that promote general welfare for all

Government provides public goods that meet the needs of the median voter- what about everyone else?

Role of market forcesTension between

market forces and governments obligation

Is Government Fulfilling its Obligation?

Normative ValuesUnderstanding

citizenship as a legal construct guarantees special protections under the Constitution

Government accountability to citizens under the constitution

Empirical Manifestations

Issues of race, ethnicity, and gender have been used to stratify society to the great disadvantage of large numbers of people living in the United States (Shea, March 6th, 2013).

Another Look at the Big Questions

Should government pursue equity to support the welfare of its citizens in a society that was

formed utilizing inequitable principles?

Should equity be considered a primary goal of government?

Equity in Government Funding Across SectorsMultiple arenas where equity in funding should be considered:

- across ethnic and cultural lines- across different age groups- across the urban-rural divide- across small/community and

large/national nonprofits

Nonprofits face problems from government funders in terms of:

- late and/or reduced payments- complexity and requirements of contracts

National Center for Charitable Statistics

Survey on nonprofits and government contracts

2010 census data on state population and density

Analysis of Government Funding

Across the Urban-Rural Divide

Population Size but Not Population Density

is a Factor

Urban Nonprofits Experience More Problems

with Late Payments

Equity and Nonprofit Size

Who Receives Government Funding?

Size as a Measure of Success

In the eyes of funders, size:

o Legitimizes

o Indicates Past Success

o Implies Future Dependability

Inherent Flaws

• The traditional funding model shapes the topography of social service

provision, as well as the nonprofit landscape

• The traditional funding model results in a homogenized sector that precludes the infusion of new

practices and ideas.• Appealing to administrative norms

and standards, may not, in fact, correlate to greater governmental

funding as was previously stated in a great deal of literature (Garrow,

2010). • Are these large agencies really

reaching the target population in the most effective, impactful manner?

A More Equitable Future

"Although "going to

scale" has gained

currency, there is an

emerging set of

questions about how

scale links to local

community

engagement, which

may be the linchpin of

lasting social change"

(Kim & Bradach,

2012).

• There is more to success than fiscal and reporting capacity• A Shift to Program

and Evidence-Based assessment criteria may open the door for smaller organizations

A Way Forward?

If equity in government funding of nonprofit human service providers is a moral

imperative, and if the current state of affairs leans towards inequity, how do we correct

this imbalance?