Interestingly, despite a widespread belief that the voluntary sector is an important generator of social capital, no one to date has studied whether the seemingly inexorable growth of government contracting with nonprofit organizations might be contributing to a decline, slowing that decline, or changing the character of the social capital that is produced.
Government Contracting and Social Capital:
Unasked Questions
Unasked Questions
Sheila Suess Kennedy
Associate Professor
School of Public & Environmental Affairs
Indiana University Purdue University Indianapolis
801 West Michigan St. #4061
Indianapolis, IN 46202
shekenne@iupui.edu
Associate Professor
School of Public & Environmental Affairs
Indiana University Purdue University Indianapolis
801 West Michigan St. #4061
Indianapolis, IN 46202
shekenne@iupui.edu
Wolfgang Bielefeld
Professor
School of Public & Environmental Affairs
Indiana University Purdue University Indianapolis
801 W. Michigan Street
Indianapolis, IN 46202
wbielefe@iupui.edu
Richard Stazinski
School of Public & Environmental Affairs
Indiana University
Bloomington, IN
mstazin@iu.edu
Professor
School of Public & Environmental Affairs
Indiana University Purdue University Indianapolis
801 W. Michigan Street
Indianapolis, IN 46202
wbielefe@iupui.edu
Richard Stazinski
School of Public & Environmental Affairs
Indiana University
Bloomington, IN
mstazin@iu.edu
Government Contracting and Social Capital:
Unasked Questions
Unasked Questions
Over the last several years, scholars have increasingly turned their attention to the study of social capital, a term that generally refers to norms of trust and reciprocity which are thought to be essential to the operation of social networks and thus to democratic processes. The concept is both more complex and less an unalloyed good than much of the discussion might lead one to believe; nevertheless, reports that it is diminishing have caused considerable concern—and that concern has extended well beyond the boundaries of the academic community.
While the assertion that social capital is declining (at least in the United States) is not uncontested, a number of theories have been offered that might explain such a decline if it proves to be true. Culprits have ranged from the ubiquity of television to working wives to gated suburban communities. Interestingly, despite a widespread belief that the voluntary sector is an important generator of social capital, no one to date has studied whether the seemingly inexorable growth of government contracting with nonprofit organizations might be contributing to a decline, slowing that decline, or changing the character of the social capital that is produced.
As we will argue, there is sufficiently intriguing evidence (at least in the United States) to warrant such study.
Background
Academic attention to the concept of social capital is not new; indeed, references can be traced back as far as 1916 (Putnam 2000, 19-20). The 1950’s brought scattered academic attention to the nature and role of social capital; however, sustained scholarly interest began only in the mid-1980’s (Bourdieu 1986, 248), when work by James Coleman (1988) and others sparked additional academic interest in the subject. With the publication of Robert Putnam’s Bowling Alone: The Collapse and Revival of American Community (2000), the concept emerged into the general public consciousness, and sparked a lively and ongoing debate about the nature of social capital, the reliability of various methods for measuring it, and its significance for democratic governance.
Complicating the discussion is the fact that definitions of the term “social capital” abound. (A recent survey by Adler & Kwon (2002, 18-21) listed twenty). There is general agreement that social capital is an element of social structure, that is, that it is an attribute of those relationships in which social actors are embedded. “To have social capital a person must be related to others, and it is those others, not himself, who are the actual sources of his or her advantage” (Portes 1998, 7). Social capital thus includes norms of trust and reciprocity which are developed between persons who are engaged in social networks; it may also include feelings of solidarity which develop as a result of sharing a group mission or fate. Putnam, Portes and others have distinguished between the norms of trust and reciprocity, or “bridging social capital,” and those of felt solidarity, or “bonding social capital.”
Bridging social capital results from ties between heterogeneous actors, and facilitates ties among people across diverse backgrounds and social cleavages. Bridging social capital is thought to generate broader identities and more generalized reciprocity. Bonding social capital, on the other hand, promotes in-group solidarity and tends to reinforce exclusive identities and homogeneity. Groups can have networks that promote both types of social capital simultaneously; for example, the ties between members of a white religious congregation may promote bonding on the dimension of race, and bridging on the dimension of class (Bielefeld 2003). Thus, while social capital is believed to facilitate coordination, reduce transaction costs and enhance the flow of information, effects which can enhance any number of social activities from job hunting to trade to community action (Bielefeld 2003), scholars increasingly believe that those effects will depend upon whether we are talking about bridging or bonding social capital. Bonding social capital may enhance the ability of soldiers to work together to win a battle; bridging social capital may provide a better linkage to information about employment opportunities.[1]
While much of the conversation about social capital, both scholarly and public, has assumed its importance as a social good (Putnam 2000), it is important to recognize its less positive consequences as well. Portes (1998, 9-14) has identified three basic functions of social capital, and has noted that one of those functions is as a source of social control. For example, tight networks are useful to parents, teachers, and others in authority as they seek to maintain discipline and promote compliance. Secondly, social capital can be a source of “kin support,” presumably benefiting children’s education and personal development. Finally, social capital can be a source of benefits through extra-familial networks. This is the most commonly-cited function of social capital, and the one that is widely perceived to be beneficial.
Social capital can be an attribute of individuals or organizations. At the individual level, it refers to resources embodied in an individual’s social networks; at the organizational level, it refers to the organization’s networks. At either level, it is exclusively a relational concept, and distinct from human capital, a term that refers to skills, knowledge, education and training (Putnam 2003).
Surprisingly, there has been little or no empirical research on the possible negative effects of social capital. Putnam (2000) has pointed to possible negative consequences of bonding social capital; he notes that, with its emphasis on in-group solidarity, such bonding may promote out-group antagonism. Portes (1998) has outlined four negative consequences of strong group ties: exclusion of outsiders; excessive claims on group members; restrictions on individual freedoms; and downward leveling norms (if group solidarity is cemented by a common experience of adversity or discrimination, for example, individual success may undermine group cohesion). As yet, however, there is little empirical evidence either to support or rebut these hypotheses.
The Role of the Nonprofit Sector
Sociologists and political scientists have long recognized the importance of the nonprofit sector as a generator of social capital.
“Our basic argument is that nonprofit organizations are an important part of local social networks that connect individuals and organizations within a community. These social networks are critical to the development of local community capacity to solve social problems, support individuals, and mobilize residents for collective action.” (Backman & Smith 2000, 356).
“Our basic argument is that nonprofit organizations are an important part of local social networks that connect individuals and organizations within a community. These social networks are critical to the development of local community capacity to solve social problems, support individuals, and mobilize residents for collective action.” (Backman & Smith 2000, 356).
Backman and Smith also note the circular nature of social capital generation. “In short, social support at the community level is a product of social capital, which is itself a product of the broader social networks in a community” (p. 358). Nonprofits are an important element of those “broader social networks.” As Wuthnow (1991) has noted,
“Nonprofits may be more capable than government or market organizations of generating social norms of trust, cooperation and mutual support due to their concoercive character and appeals to charitable and social motives.”
“Nonprofits may be more capable than government or market organizations of generating social norms of trust, cooperation and mutual support due to their concoercive character and appeals to charitable and social motives.”
Numerous other authors have noted the important role of nonprofit organizations such as neighborhood and community associations, sports clubs and cultural organizations, in generating social capital. While it is clear that not all associations contribute to social capital in the same way or to the same degree (Stolle & Rochon 2001; Backman & Smith 2000), it is equally clear that the role of the voluntary sector in the production of social capital is extremely important—perhaps preeminent—and that this production of social capital is critically important to democratic processes.
“Good governance relies both on social capital within communities, for the purpose of self-governing, and especially social capital that spans the public-private divide. Non-governmental organizations play a crucial role in cultivating and representing such social capital, and in improving public services more generally.” (Brinkerhoff 2003)
“Good governance relies both on social capital within communities, for the purpose of self-governing, and especially social capital that spans the public-private divide. Non-governmental organizations play a crucial role in cultivating and representing such social capital, and in improving public services more generally.” (Brinkerhoff 2003)
Voluntary organizations—nonprofits and NGOs—act as a buffer between the state and the individual citizen. The so-called third sector, composed of voluntary associations, is something other than the family unit, with its unique relationships, or government, with its monopoly on the legitimate exercise of coercive power. The networks of trust and reciprocity developed through participation in voluntary organizations are neither governmental nor individual; instead, these nonprofit organizations are “mediating institutions,” facilitating and moderating the relationships between citizens and their formal governmental structures. As the points of contact and potential conflict between individuals and the modern administrative state increase[2], the importance of such mediating institutions, and the networks created by and through them, increases as well.
The continued health of the voluntary sector is as important to democratic governments as it is to individual citizens. The nonprofit sector is where citizens acquire human capital, those skills needed for effective community participation, and it is the arena in which they build social capital—the connections that enable them to use those skills in concert with others to influence political and community decision-making. The networks of trust and reciprocity generated by nonprofit activity are resources from which government draws personnel, paid and voluntary, and to which it increasingly looks for program implementation. Especially in an era of privatization (defined here as the delivery of government services through nonprofit and for-profit intermediaries[3]), the ability of government contractors to deliver social services depends to a considerable degree upon the adequacy of their networks—upon the extent of their social capital. If that is the case, however, we must ask a question that is rarely if ever asked: what if the increasing use of nonprofit agencies to deliver social services is changing the character of those agencies in a way that is eroding their ability to generate social capital? As Backman and Smith have noted, in a slightly different context,
“Although there is no empirical research on the question of whether increased reliance on commercial income, or on marketlike funding mechanisms, dampens the ability of nonprofits to generate social capital, there are reasons to believe that it may.” (p. 362)
“Although there is no empirical research on the question of whether increased reliance on commercial income, or on marketlike funding mechanisms, dampens the ability of nonprofits to generate social capital, there are reasons to believe that it may.” (p. 362)
Backman and Smith were discussing the effects of increased commercialization on nonprofit identity in the United States. They found that increases in commercial activities by nonprofits threatened to alter the role of board members, as the organizations became less dependent upon the financial contributions of their boards. Similar concerns attend the increasing dependence of nonprofits on government contracts, which in the United States now account for nearly 40% of all voluntary sector income (and, by some estimates, 80% of the income of social-service-providing nonprofits). In an important book published in 1993, Nonprofits for Hire: The Welfare State in the Age of Contracting, Steven Rathgeb Smith and Michael Lipsky were among the first to explore a variety of issues raised for government and the nonprofit sector by virtue of the increasing reliance of the latter upon government contracts.
“American social policy is in the midst of a dramatic restructuring of the
way public social services are provided. Although government funding of
nonprofit service organizations dates to the colonial period, only in the last 25 years did this government-nonprofit strategy emerge as a widespread and favored tool of public service delivery. But entrusting the most vulnerable citizens and the most delicate service tasks to private agencies is not simply a matter of choice between “making” or “buying” services. This might be the case when one considers contracting out for pencils, computer services, or strategic weapons. But when it comes to purchasing the care and control of drug addicts, the safety and nurturing of children, the relief of hunger and the regulation of family life (through child protective activities) from private agencies, other values than efficiency are at stake. We contend that the impact of this transformation on the future of the American welfare state has not received adequate attention.”
“American social policy is in the midst of a dramatic restructuring of the
way public social services are provided. Although government funding of
nonprofit service organizations dates to the colonial period, only in the last 25 years did this government-nonprofit strategy emerge as a widespread and favored tool of public service delivery. But entrusting the most vulnerable citizens and the most delicate service tasks to private agencies is not simply a matter of choice between “making” or “buying” services. This might be the case when one considers contracting out for pencils, computer services, or strategic weapons. But when it comes to purchasing the care and control of drug addicts, the safety and nurturing of children, the relief of hunger and the regulation of family life (through child protective activities) from private agencies, other values than efficiency are at stake. We contend that the impact of this transformation on the future of the American welfare state has not received adequate attention.”
We are beginning to see the contours of that transformation, and its effect upon the voluntary sector. Significant attention has been paid to the management and contracting challenges posed by privatized service delivery methods (Kennedy & Beilefeld 2002; Dannin 2001; GAO 1997), and (in the United States) to the implications for the doctrine of state action and constitutional accountability (Kennedy 2001). Other effects of this governance shift have been less fully explored. Some of the ways in which privatized service delivery might affect the generation of social capital—for good or ill—are outlined below.
- There is little or no scholarship investigating whether participation in government itself, by serving on boards and commissions, ad hoc committees and the like, facilitates the production of social capital. It seems reasonable to conclude that such activities may create bridging social capital. Certainly, such service is likely to bring the citizen into contact with persons he otherwise might not meet, and the common experience of service has the potential of generating trust and reciprocity. As government outsources for more and more functions, however, it relies less on such boards and commissions and more on the “experts” who hold the relevant contracts (Kennedy 2001). Citizens are increasingly excluded from communal activity and arenas for democratic deliberation. Has this exclusion affected the production of social capital?
- When nonprofit organizations contract with the state to provide services, they become accountable in ways that are qualitatively different from the accountability owed to board members and even donors. Governments quite properly require fiscal and programmatic reporting, employment of minimum financial management standards, and a level of professionalism in the delivery of services. Overall, such requirements undoubtedly improve the efficiency and management practices of the nonprofit involved. Lester Salomon, among others, has written about the amateurism of the nonprofit sector[4], and has contrasted that amateurism with the professionalism of public and private agencies. (Salomon 1987). The question is whether the more businesslike, more streamlined, more professionalized organizations that emerge as a result of this public-private partnership are still able to provide the benefits—including, but not limited to, social capital generation—that truly voluntary associations afford, and if so, whether and how the nature of those benefits changes. A 1997 GAO report links dependence by American nonprofits on government contracting to a reduction in grass-roots education efforts by such organizations. Sundeep Aulakh has reported a similar phenomenon in Great Britian, suggesting that
“as voluntary agencies take on the state’s delivery functions, their defining qualities such as encouraging community development and participation are threatened. (Rochester, 1996; Todd and Ware, 2000) Ultimately, it has been argued that as voluntary agencies have increasingly taken on the state’s delivery functions (and as the state influences their management) they have become agents of the state.”
Other studies have noted a decrease in volunteer and donor involvement in the conduct of the business of such organizations. (Brooks 2000) Is it possible, as one writer has suggested, that “by ‘reinventing’ government, we have created mutants and hybrids, neither public nor private, but some admixture of the two”? (Kennedy 2000) Is there a point at which a nonprofit or NGO loses its identity as a voluntary organization, and becomes simply a differently-constituted arm of the state? If so, what are the consequences for the production of social capital, if any?
- Many of the criticisms of privatization understood as government contracting revolve around questions of accountability (Kennedy 2001; Dannin 2001). If, as some have suggested, government transparency and accountability are often compromised by contracting regimes, one potential consequence is increased citizen distrust of government agencies. Anecdotal evidence suggests that such distrust is a real problem, at least in the United States. Trust in government can be understood as a “linkage” that enables community building and collective action. It is part of the more generalized trust we speak of in connection with bridging social capital. Similarly, if government contracting leads to perceptions of favoritism and cronyism (more likely when the contractor is for-profit, certainly, but not entirely absent in the voluntary sector), norms of both trust and reciprocity may suffer. Is privatization eroding trust and reciprocity in this way, and if so, what is the effect (if any) on social capital?
- Emerging evidence suggests that privatization-cum-contracting may be stifling grass-roots advocacy efforts by private, voluntary organizations as well as by for-profit contractors. (GAO, Cremson and Ginsberg 2002; Gittel 1980) In democratic systems, citizenship implies participation in democratic deliberation; indeed, to the extent that social capital is valued, it is in large part because it is deemed to facilitate that participation. In this context, it is well to recall the Backman and Smith observation cited above, to the effect that social capital is a product of the broader networks in a community. Putnam (2000) uses political participation as an indicator of the presence or absence of social capital; if contracting depresses such participation, we must ask whether the consequence is to diminish social capital.
- The evidence suggests that when nonprofits or NGOs contract with government, decision-making within the contracting organization tends to shift from the board of directors to the executive director (Smith and Lipsky 1993). Staff tends to grow as well, crowding out volunteers in favor of hired personnel who report to the Executive Director. If social capital grows out of collective action and decision-making, the shift to individual authority and away from collective deliberation by boards informed by significant input from volunteers may lessen its production.
- Contracting also increases the likelihood that voluntary organizations will become more bureaucratic, posing obstacles to collective action by the staff. Certain organizational structures are more conducive to enabling employees to work together in a more horizontal, collective manner. To the extent hierarchical structures diminish opportunities for collective action, has social capital formation been compromised?
- As has been noted, nonprofits that contract with government become more professionalized. One aspect of this phenomenon is a diminished role for clients in the organization. One of the distinguishing characteristics of many nonprofit organizations is their approach to those they serve; indeed, it is this respect for the worth of each human being that is often cited as a reason to hope for better results from nonprofits than from government agencies or for-profit contractors in some areas of social service provision. However, public agencies often require that contractors employ credentialed and professional staffs, in order to ensure a minimum quality of service, and the consequence is often to discourage the use of some clients to help others. (An example: Austin Center for Battered Women was founded on the feminist belief that battered women benefit from informal relationships with shelter workers, and from participating in self-help and peer support groups. As the organization became more “professional” and bureaucratic, residents became service recipients who were excluded from such collaborative opportunities (Ahrens 1980).) If such incidents are widespread, and if client participation is supportive of social capital formation, does this situation contribute to a decline in social capital?
- To the extent that nonprofits or NGOs become financially dependent upon government contracts, opportunities for decision-making may shift from the voluntary association to the government, diminishing occasions for democratic deliberation. Government typically tells its contractors what services to purchase, what clients to serve, what services those clients should receive, and which clients should be given priority. Decisions that were once made in a collective fashion by the volunteers and board members are now made by government. Smith (1999, p. 198) gives an example: a nonprofit organization located in Seattle provides an array of programs for immigrants, with a special emphasis on housing construction and renovation, and economic development. The organization relies upon government contracts for much of its income, and much of this funding comes with significant conditions and extensive monitoring. Board members lament their loss of control over their programming; decision-making has shifted from broad policy matters to questions about how to implement government directives. Does this shift in board jurisdiction have implications for social capital?
- Government support of nonprofits and NGOs can crowd out private donations. (Brooks 2000) To the extent that the act of charitable giving is itself a generator of interest and involvement in the broader community, we might ask if this consequence of contracting also might suppress formation of social capital.
These are hypothesized consequences, and it is possible to frame the questions very differently. (Indeed, some of these suggested outcomes are conflicting: on the one hand, it is suggested that the locus of decision-making has shifted from government to voluntary organizations, and it is also suggested that contracts come with government constraints that effectively reduce nonprofit decision-making. It is unlikely that both results are true.) It is also possible to argue that government contracting may bring more citizens into contact with democratic policy processes, may enlarge and extend the networks of which they are members, and thus may increase, rather than diminish, social capital formation and citizen awareness of the importance of collective action.
For example, in “Charitable Choice: First results from Three States” we recently reported on the experiences of smaller, strongly “faith-based organizations” that had only recently begun contracting with government agencies to provide social services to welfare recipients. (The impetus for their participation was the Charitable Choice provision of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. That bill was a complete overhaul of the welfare system in the United States.) Among our findings was that such religious organizations experienced an increase in the number of other organizations with which they networked. Strongly faith-based organizations, which typically entered the contracting regime with the smallest networks, made new contacts and self-reported positive changes in their missions as a result of the experience. If other nonprofit contractors share the experience of these strongly faith-based organizations, the result could be an increase in the generation of social capital by such organizations.
For example, in “Charitable Choice: First results from Three States” we recently reported on the experiences of smaller, strongly “faith-based organizations” that had only recently begun contracting with government agencies to provide social services to welfare recipients. (The impetus for their participation was the Charitable Choice provision of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. That bill was a complete overhaul of the welfare system in the United States.) Among our findings was that such religious organizations experienced an increase in the number of other organizations with which they networked. Strongly faith-based organizations, which typically entered the contracting regime with the smallest networks, made new contacts and self-reported positive changes in their missions as a result of the experience. If other nonprofit contractors share the experience of these strongly faith-based organizations, the result could be an increase in the generation of social capital by such organizations.
Furthermore, the above discussion does not address the implications of the wide variety of organizations that fall within the general category of “nonprofit.” Service-providing organizations may have very different experiences with contracting than other types of nonprofit; indeed, the nature of the service may change the nature of the experience. Nonprofits that contract with local government units may have a different experience than those doing business with the federal government.
Finally, any discussion assuming the decline of social capital runs into thorny methodological disputes about both the nature of social capital and its measurement. Even if the supposed decline in social capital posited by Putnam and others is confirmed, the causes of such decline are likely to be multiple, and the contribution of privatization—even if proven—is unlikely to explain more than a small part of it.
Indeed, the question as we have framed it ignores the very real possibility—alluded to above—that social capital itself is a double-edged sword, and that some nonprofit organizations encourage social solidarity of a sort highly inimical to democratic processes. A more finely-grained investigation of these questions will necessarily distinguish between those attributes of both bridging and bonding social capital thought to be supportive of democratic self-governance and those thought to be destructive of it.
Whatever the caveats, however, these are questions that need to be asked and then answered—with careful, empirical research. It has been suggested that contracting produces a “hollow state” (Milward 1994). If it is possible that contracting also is “hollowing out” an essential component of civil society, that possibility deserves scholarly attention. On the other hand, if the picture is more mixed—if some contracting arrangements are actually beneficial to social capital formation, while others are not—it would be immensely helpful to be able to describe and replicate the positive arrangements.
The one thing that seems clear is that contracting is changing the nature of the voluntary sector. Whether those changes are supportive of democratic processes or inimical to them is an important question, and it has been neither asked nor answered.
Bibliography
Adler, Paul S., and Seok-Woo Kwon. 2002. “Social Capital: Prospects for a New Concept.” Academy of Management Review 27:17-40.
Ahrens, Lois. 1980. "Battered Women’s Refuges" in Radical America, Vol.14, #3 May-June. Alternative Education Project, Sommerville, MA.
Aulakh, Sundeep. “The Transformation of the UK State: Rolling Back or Rolling Out?” Paper delivered at Transatlantic Policy Consortium Conference, Speyer, Germany 2003.
Backman, Elaine V. & Smith, Steven Rathgeb. 2000. “Healthy Organizations, Unhealthy Communities?” Nonprofit Management & Leadership, vol. 10, no. 4, Summer
Bielefeld, Wolfgang. Social Capital. [forthcoming 2003]
Bourdieu, Pierre. 1986. “The Forms of Capital.” Pp. 241- 258 in Handbook of Theory and Research for the Sociology of Education. Edited by J. G. Richardson. New York: Greenwood.
Brinkerhoff, Jennifer M. 2003. “Donor-Funded Government-NGO Partnership for Public Service Improvement: Cases from India and Pakistan.” Voluntas: International Journal of Voluntary and Nonprofit Organizations.
Brooks, Arthur C. “Is There a Dark Side to Government Support for Nonprofits?” Public Administration Review May/June 2000, Vol. 60, No. 3
Coleman, James. 1988. “Social Capital in the Creation of Human Capital.” American Sociological Review, 94(Supplimental): S95-S120.
Cremson, Matthew & Ginsburg, Benjamin. 2002. Downsizing Democracy: How America Sidelined its Citizens and Privatized Its Public. Baltimore: Johns Hopkins University Press.
Dannin, Ellen. 2001. “To Market, To Market: Caveat Emptor.” To Market, To Market: Reinventing Indianapolis. Ingrid Richie and Sheila Suess Kennedy, eds. Lanham, MD: University Press of America.
Gittell, Marilyn. 1980. Limits to Citizen Participation. Beverly Hills: Sage Publications, Inc.
Kennedy, Sheila Suess and Wolfgang Bielefield. 2002. “Government Shekels Without Government Shackles? The Administrative Challenges of Charitable Choice.” Public Administration Review. Vol. 62 #1
Kennedy, Sheila Suess. “Accountability: The Achilles Heel.” 2001. “To Market, To Market: Reinventing Indianapolis.” Ingrid Richie and Sheila Suess Kennedy, eds. Lanham, MD: University Press of America
Kennedy, Sheila Suess. 2001. “When Is Public Private? State Action, Privatization, and Public-Private Partnerships” George Mason Civil Rights Law Review, Vol. 11 #2, Spring 2001.
Milward, Brinton. 1994. “Nonprofit Contracting and the Hollow State.” Public Administration Review, Jan/Feb. Vol. 54, No. 1.
Portes, Alejandro. 1998. “Social Capital: Its Origins and Applications in Modern Sociology.” Annual Review of Sociology 24:1-24.
Putnam, Robert D. 2000. Bowling Alone: The Collapse and Revival of American Community. New York: Simon & Schuster.
Salamon, Lester M. 1987. “Partners in Public Service: The Scope and Theory of Government-Nonprofit Relations.” Pp. 99 – 117 in Walter W. Powell (ed.), The Nonprofit Sector: A Research Handbook. New Haven: Yale University Press.
Smith, Stephen Rathgeb. 1999. “Government Financing of Nonprofit Activity.” Pp. 177-210. In Nonprofits and Government: Collaboration and Conflict, Elizabeth T. Boris and C. Eugene Steurle, eds. Washington, D.C. Urban Institute Press.
Smith, Stephen Rathgeb and Lipsky, Michael. 1993. Nonprofits For Hire: The Welfare State in the Age of Contracting. Cambridge: Harvard University Press.
Stolle, Dietlind, and Thomas R. Rochon. 2001. “Are All Associations Alike? Member Diversity, Associational Type, and the Creation of Social Capital.” Pp. 143 – 156 in. Beyond Tocqueville: Civil Society and the Social Capital Debate in Comparative Perspective. Edited by Bob Edwards. Hanover, NH: University Press of New England.
United States General Accounting Office. 1997. Privatization Lessons Learned. Washington, D.C.
Wuthnow, Robert. 1991. Between States and Markets: The Voluntary Sector in Comparative Perspective. Princeton: Princeton University Press.
[1] Neglecting the distinction may lead analysts to dubious or meaningless results. For example, a recent article by Dora L. Costa and Matthew E. Kahn in the March, 2003 issue of Perspectives on Politics suggests that the absence of social capital “may explain low levels of spending on such public goods as education and welfare.” The article then reports at great length on evidence that social capital formation is greater in homogeneous communities. Nowhere is the distinction between types of social capital noted, nor is social capital defined. The authors are apparently decrying the deficit in bridging social capital, while documenting the formation of bonding social capital, but those concepts—and their consequences—are absent from the manuscript, which assumes that all social capital is interchangable—and good.
[2] The growth of government in western industrialized countries has multiplied enormously the points of contact between citizens and their governments. Obtaining Social Security benefits, getting a drivers license, applying for a student loan and numerous other transactions involve government at some level.
[3] As used in this paper, “privatization” refers neither to the outright sale of previously government-owned industries to the private sector, nor to the more traditional procurement arrangements between government and private enterprises.
[4] Salamon proposes a theory of “voluntary failure” (111 – 113). He posits that the voluntary sector is the preferred mechanism for providing collective goods, and that government is a residual institution needed because of certain shortcomings of the voluntary sector. These shortcomings include: a)Philanthropic insufficiency, defined as a lack of a reliable stream of resources sufficient to respond to social needs; b) Philanthropic particularism, defined as a focus on particular subgroups. This is sometimes considered a strength of sector; however, some subgroups may not be favored by those with resources. This also can lead to duplication of services, when each subgroup wants its own agencies; c) Philanthropic paternalism, when those with the greatest resources get to define community needs and decide how they are to be met; and Philanthropic amateurism, in part due to paternalism, where the understanding of and care for the needy is entrusted to well-meaning amateurs and those with moral agendas, rather than to professionals trained to deal with the issues. Salomon suggests that the philanthropic sector’s weaknesses correspond to the public sector’s strengths, so that partnerships work to the benefit of both. Government can deal with the issues of sufficiency, particularism, paternalism and professionalism, while the nonprofit sector can personalize service provision, adjust care to needs of clients, and provide competition.
Stolle, Dietlind, and Thomas R. Rochon. 2001. “Are All Associations Alike? Member Diversity, Associational Type, and the Creation of Social Capital.” Pp. 143 – 156 in. . Edited by Bob Edwards. Hanover, NH: University Press of New England.
Brooks, Arthur C. “Is There a Dark Side to Government Support for Nonprofits?” May/June 2000, Vol. 60, No. 3
Wolfgang Bielefeld Professor School of Public & Environmental Affairs Indiana University Purdue University Indianapolis 801 W. Michigan Street Indianapolis, IN 46202
Sheila Suess Kennedy Associate ProfessorSchool of Public & Environmental AffairsIndiana University Purdue University Indianapolis 801 West Michigan St. #4061 Indianapolis, IN 46202Wolfgang Bielefeld Professor School of Public & Environmental Affairs Indiana University Purdue University Indianapolis 801 W. Michigan Street Indianapolis, IN 46202
Sheila Suess Kennedy Associate ProfessorSchool of Public & Environmental AffairsIndiana University Purdue University Indianapolis 801 West Michigan St. #4061 Indianapolis, IN 46202Wolfgang Bielefeld Professor School of Public & Environmental Affairs Indiana University Purdue University Indianapolis 801 W. Michigan Street Indianapolis, IN 46202
Sheila Suess Kennedy Associate ProfessorSchool of Public & Environmental AffairsIndiana University Purdue University Indianapolis 801 West Michigan St. #4061 Indianapolis, IN 46202Wolfgang Bielefeld Professor School of Public & Environmental Affairs Indiana University Purdue University Indianapolis 801 W. Michigan Street Indianapolis, IN 46202
Sheila Suess Kennedy Associate ProfessorSchool of Public & Environmental AffairsIndiana University Purdue University Indianapolis 801 West Michigan St. #4061 Indianapolis, IN 46202Wolfgang Bielefeld Professor School of Public & Environmental Affairs Indiana University Purdue University Indianapolis 801 W. Michigan Street Indianapolis, IN 46202