SocialServiceNonprofits:NavigatingConflictingDemands

JenniferE.MosleySchoolofSocialServiceAdministration

UniversityofChicagomosley@uchicago.edu

Forthcomingin:TheNonprofitSector:AResearchHandbook(3rded).W.W.PowellandP.Bromley,Editors.PaloAlto,CA:StanfordUniversityPress.AbstractMostsocialservicenonprofitsintheUnitedStatesdependsubstantiallyonthegovernmenttosustaintheiroperationsandincreasinglyplayimportantrolesinpolicyformulationandimplementation.Thischapterarguesthatthissectoralblurringofrolesandresponsibilitiesatthegovernment-nonprofitlevelhasalsohadtheconsequenceofincreasedblurringbetweennonprofitactivityandmarketactivity.Notably,theconcernsaroundaccountabilityandimpactfoundinthisprincipal-agentrelationshiphaveledtogovernment-setincentivesforsocialservicenonprofitstolook,feel,andactincreasinglylikefor-profitbusinesses,whileatthesametimehavingincreasedpoweringovernancearrangementsandasrepresentativesofmarginalizedpopulations.Currently,socialservicenonprofitsarechallengedtomeetthenormativeexpectationsmanypeoplehaveforthenonprofitsectoraroundvoluntarism,communityconnections,andindependencefromgovernment.Theyhavestrongincentivestobecomemoreprofessionalized,larger,moredatadriven,andtomakedecisionsregardingserviceprovisionandadvocacybasedonresourceavailabilityratherthancommunityneeds.Theresultingtensionisreflectedintheinconsistentpolicies,practicerecommendations,andevenscholarshipassociatedwiththesector.

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NonprofitorganizationshavelongdominatedthesocialservicessectorintheUnitedStates.Historically,nonprofitsocialserviceshaveoftenbeenconceptualizedasaresidualsector,addressinggapsunfilledbygovernment—butthatviewisnotquiteaccurate(Salamon,1987a).Thegrowthofthemodernwelfarestate(particularlyonethatishesitantandlargelyprivatized)hasresultedinaparallelgrowthinthesocialservicenonprofitsectorthatfunctionsprimarilyasacomplementtogovernmentactionandatoolforenactingthesafetynet.Growthinthesocialservicenonprofitsectorhascomethroughshiftsinthesafetynettowardsserviceprovisionandawayfromcash-basedassistance,andinanongoingpreferencetowardscontractingoutgovernment-fundedsocialservicestononprofitorganizations.Asaresult,mostsocialservicenonprofitsintheUnitedStatessubstantiallydependonthegovernmenttosustaintheiroperationsandplayincreasinglyimportantrolesinpolicyformulationandimplementation.InthischapterIarguethatthissectoralblurringofrolesandresponsibilitiesbetweengovernmentandnonprofitshashadtheconsequenceofincreasedblurringbetweennonprofitactivityandmarketactivity.Specifically,theconcernsaroundaccountabilityandimpactfoundinsuchaprincipal-agentrelationshiphaveledtogovernment-setincentivesforsocialservicesnonprofitstolook,feel,andactincreasinglylikefor-profitbusinesses,andthesectorhasrespondedaffirmatively(Maier,Meyer,&Steinbereithner,2016).Today,exceptfortheirfundingmodel,manysocialservicenonprofitsarealmostindistinguishablefromfor-profitbusinessesatthegroundlevelinregardstotheirattentiontothebottomline,levelofprofessionalization,andambivalencetowardstheirlargercivicrole.Atthesametime,theyhaveincreasingpoweringovernancearrangementsandasrepresentativesofmarginalizedpopulations.Theresultingtensionisreflectedintheinconsistentpolicies,practicerecommendations,andevenscholarshipassociatedwiththesector.Whyshouldwecareaboutthis?AsPowell(thisvolume)notes,nonprofitsareoftenseenastoolstoaccomplishatask(oftendeterminedbyafunder)andalsoas“amediumfortheexpressionofvaluesandcommitments”(e.g.topromotewell-being,communitydevelopment,civicengagement,voluntarism,etc).Inotherwords,althoughtheyhaveanimportantinstrumentaltaskindeliveringsocialservices,theyareoftenascribedkeyexpressivefunctionssuchasprovidingcommunitycohesion,advocatingforthevulnerable,andpromotingground-levelsolutionstoimportantsocialproblems.Thistensionbetweeninstrumentalityandexpressivenessisparticularlyfraughtinthesocialservicessectorasdemandstomeetoutcomegoals(relatedtotheirinstrumentalrole)havebecomemoredominantandprocessgoals(relatedtotheirexpressiverole)aresuppressedinlieuofadvancingnormsaroundprofessionalization,efficiency,andimpact.This“entanglementofthegrowthofvoluntaryassociationsandthenonprofitsectorwiththedevelopmentofcapitalismandthecorporateorder”(Soskis,thisvolume)hasledtoworriesaboutaccountabilityandcapacity,andthusagrowthindemandsatthefieldleveltopursue“impact”and“efficiency”ascentralvalues.Thesedemandsareoften:• Onlyproventhroughincreaseduseofdataandperformancemeasurementschemes;• Framedasproperstewardshipoflimitedresources;

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• Requirefundingbedirectedtowardsmeasureableprogrammaticfunctionsratherthancivicengagementandadvocacy;

• Co-constitutivewithprofessionalization;• Tiedtothegrowthofevidence-basedpracticeandtheresultingtensionsbetweenthat

movementandmore“traditional”nonprofitnotionsaroundperson-centeredcare,co-productionofservices,anddeeperconnectionstocommunity.

Thesechangeshaveresultedinanumberofchallengesforthesector.First,therehavebeenincreasesinconsolidationandmergersasbig,multiserviceorganizationsareincreasinglybestsituatedtocompeteinthedata-driven,professionalizedmarketplace.Althoughthesectorcontinuallygeneratessmallerprovidersthatattempttorecreateorenactamorecommunity-ledorcommunity-engagedstyle,therearefewexternalrewardsforthattypeofworkandcompetitionisfierce.Thus,traditional“economic”theoriesofthesector(Hansmann,1987;Steinberg,2006;Weisbrod,1991)arecalledintoquestion—aresocialservicenonprofitsreallyservingnicheneeds,associatedwithcloseconnectionstoreligious,ethnic,orgeographiccommunities?Dotheyreallyinspiremoretrust?Additionally,therehavebeenimportantchangesinadvocacynormswithmostadvocacybysocialservicenonprofitsnowfocusedprimarilyonmaintaininggovernmentfinancialsupportinparticularindustriesorsubfields(Mosley,2012).Thiscallsintoquestiontheabilityofthesocialservicenonprofitsectortobeanindependentvoiceadvocatingformoresubstantivesocialchangeonbehalfofmarginalizedpopulations,asitisinnonprofits’self-interesttoadvocateprimarilyaroundthestatusquo.Traditional“political”theoriesofthesectorwillhavetobeadjustedifmanyorganizationsarefunctioningmoreasinterestgroupssupportinganindustrythanasrepresentativesofmarginalizedcommunities(Clemens,2006;Eikenberry&Kluver,2004).Atthesametime,weareseeingalargerrolefornonprofitsocialserviceprovidersingovernance,largelythroughtheirparticipationincollaborativegovernanceprocesses.Nonprofitsareincreasinglyaskedtoparticipateinsuchprocessesinordertohelpmeetaccountabilitychallengesattheadministrativelevel,fillinforthe“hollowstate”associatedwithcontractingregimes,provideneededexpertise,andpromotecoordinationacrossfragmentedpolicyareas(Ansell&Gash,2008;Emerson&Nabatchi,2015;Milward&Provan,2000).Theirparticipationisoftenalsoconceptualizedasaproxyfortheparticipationofcitizens,andthusawayofadvancingdemocraticnorms(Levine,2016;Mosley&Grogan,2013).Theseprocessesarebeinggivenincreasingpoweroverregulatory,funding,andimplementationmatters,butthedegreetowhichsocialservicenonprofitsareadequatelyrepresentingthepopulationstheyserveisunknown.Giventhechangeswehaveseeninadvocacynorms,andtheincentivesforthoserunningtheprocessestoexcludethosewithmoredissentingvoices,thedemocraticimpactoftheirparticipationisunclear(Dean,2018).Collaborativegovernanceisnottheonlywayinwhichsocialservicenonprofitsparticipateinnetworkswithcommunity-wideeffects,however.Socialservicenonprofitsfacestrongpressuresfromfunderstoparticipateinbothintra-andinter-sectoralcollaboration,including

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signingontopackaged,promotedconceptssuchascollectiveimpact(Kania&Kramer,2011).Thereislittledoubtthatstrongnetworksareimportantforbothserviceprovisioneffectivenessandtobeaneffectiveadvocateforchange.Butthefieldiscurrentlychallengedtodothatinawaywhereeffortstobuildafieldandshoweffectivenessdon’tresultincreaminganddeepeninginequities(Wolffetal.,2017).Thepushtowardsincreasedcollaborationisonewayinwhichtheinfluenceofprivatephilanthropycanbeseeninthesocialservicessector,evenwhileitplaysarelativelysmallroleintheoverallbudgetofmostsocialserviceorganizations.Currently,socialservicenonprofitsareusuallymoredependentongovernmentdollarsthanonprivatephilanthropyandoftenlooktoindividualdonorsasasecondarysourceofincome.Thisisbasedinthecommonbeliefthatfoundationdollarsareasdifficulttogetasgovernmentdollars,butdon’tlastaslongandaregenerallyforloweramounts.But,byfocusingtheirdollarson“innovation”andinleadingthechargetowardsgreaterdemandsforimpactandoutputevaluation,privatephilanthropystillplaysanimportantroleinshapingcurrentconditionsinthesector(Brest&Harvey,2018).Oftenservingasconvenersandthoughtleaders,organizedphilanthropyhasbeenshowntoradicallyreshapewhatservicetechnologiesareinvogue,whatissuesareimportanttoaddress,andevenwhatorganizationaltypesarebestsuitedtoaddressthem(Dunning,2018;Tompkins-Stange,2016).Inthisway,theyareanimportantconsumeroftheproductssocialservicenonprofitsprovide,andhaveapowerfulhandinshapingthemarket.Overall,thischapterconcludesthatmarketbasedsocialservicesareunlikelytopromotepracticessuchasadvocacy,co-production,communityrepresentation,civicengagement,andvoluntarism,callingintoquestiontheabilityofthesectortomakethecontributionstocivilsocietymanypeopleexpectofnonprofits(Eikenberry&Kluver,2004).Withoutthesecontributions,vulnerablecommunitiescouldsuffer,andresidentscouldpotentiallybecomemorealienatedfromthekindofhuman,social,andpoliticalcapitalneededtoimprovetheirlives(Alexander,Nank,&Stivers,1999).Meanwhile,theparticipationofsocialservicenonprofitsinagrowingwebofrelationshipsandgovernancegivesthemincreasingpowerandresponsibilitybutlimitstheirabilitytomeaningfullyresistthesetrends.Inthesectionsbelow,Ireviewhowthisplaysoutthroughthecurrentdemographicsandfinancingtrendsinthesector,tensionsarisingfromgovernmentcontracting,therelationshipbetweencontractingandperformance,professionalization,andefficiencydemands,andtheresultingchallengesdescribedabove.Therearesignificantdifferencesinthewaywelfarestatesacrosstheworldengageandsupportthirdsectororganizations(Esping-Andersen,2013;Salamon&Anheier,1998),andthischaptercannotreviewallofthem;itlargelyfocusesontheU.S.case.Therearesimilartrendshappeningelsewhere,however,asdocumentedbyBrass’s(2016)workonblurringboundariesbetweenNGOsandgovernmentinKenya,workdetailingthemarketizationofthenonprofitsectorinEurope(Bode,2017;Elstub&Poole,2014),andthegrowthofsocialservicenonprofitsectorsduetoincreasedcontractingworldwide(Lu&Dong,2018).Giventhealready-dominantroleofgovernmentfundinginthesocialservicessectorintheU.S.,akeyquestion,then,isifthesocialservicenonprofitsectorcaneffectivebundletogetherboththe“moralcharacter”

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thatmakesitappealingasanalternativetogovernmentwiththeexpectedcostsavingsthatliebehindanyoutsourcingendeavor.Theanswertothisiscrucialbecausebehinditiswhatthefutureofsocialserviceswilllooklike.Iscontractingwithsocialservicenonprofitsdesirablesimplybecausetheyare“notgovernment”—private,andbeholdentomarketforces—oristheresomethingabouttheexpressivecharacterofnonprofitsthemselvesthatitisimportanttomaintain?CurrentDemographicsandFinancingSocialservicenonprofitsincludeabroadrangeoforganizationswhoseprimaryactivityinvolvesprovidingservicesthatareintendedtopromotewell-being,improvelifeandlivingconditions,ameliorateinequalitiesanddisparities,orotherwiseprovideassistancetoindividuals,familiesandcommunitiesinneed.Inpractice,thisincludesmentalhealthandlegalaidclinics,jobtrainingandemploymentassistance,foodpantries,servicesforthehomeless,childwelfareorganizations,adultdayservices,andothers.Socialservicenonprofitscanbeunderstoodasasubsetofthelargerhumanservicesfield,whichalsoincludeseducationandhealthcarefocusedorganizations.Thoseorganizationsaregenerallystudiedseparately,however,aseducationandhealthcareorganizationstypicallyhavesubstantiallydifferentfinancialmodels,operateinfieldsthataremoremixedwhenitcomestosector(i.e.astrongerroleforfor-profitandpublicorganizations)andserveamoreuniversalclientele. Althoughitisimperfect,theNationalTaxonomyforExemptEntitiesisthedominantsystemusedtocategorizenonprofitorganizationsbytheirfieldofpractice(Fyall,Moore,&Gugerty,2018;Grønbjerg,1994).Inthissystem,socialservicesaregenerallyoperationalizedascodesF,I-M,OandP(includingbutnotlimitedto:mentalhealth,crimeandlegalservices,employment,foodandnutrition,housing,disasterrelief,youthdevelopment).AsseenatthebottomofTable1,comparedtoeducationorhealthcarefocusednonprofits,socialserviceorganizationsarerelativelyhighinnumberbutsmallinsize.Theyare,onaverage,abouthalfthesizeofaneducationfocusednonprofitandaboutatwentiethofthesizeofahealthcarefocusednonprofit,eventhoughthereoverfivetimesmoresocialservicenonprofitsintheU.S.thantherearehealthcarenonprofits.Thatsaid,from2006to2016,insocialservices,revenuegrewmuchfasterthanthenumberoforganizations.Everysocialservicefield,withtheexceptionofdisasterpreparednessandrelief,sawadoubling(orhigher)inmedianrevenueoverthatten-yearperiod.Itisgrowingeveninfieldsthataredeclininginnumber(likeemployment),whichdemonstratesconsolidation.Intermsofnumbersoforganizations,brokendownbyfield,weseeparticularincreasesduringthattimeinthenumberoforganizationsinthefieldsofyouthdevelopmentandfood,agriculture,andnutrition,andamoderatedecreaseinthesizeofthefieldofemploymentservices.Table1. SizeandScopeofSocialServiceNonprofitsintheUnitedStates,2006-20161

1IgratefullyacknowledgetheworkofJadeWonginpullingthesenumberstogether

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Total#oforganizations

(2016)

Percentchangeinnumberof

organizations2006-2016

Mean/Medianrevenue(2016)

Percentchangeinmean/median

revenue2006-2016

MentalHealth&CrisisIntervention(F) 17,106 -0.7% $3,391,936/

284,91274.1%/114.5%

Crime&Legal(I)20,899 1.5%

$960,272/130,497

81.8%/187.7%

Employment(J)32,876 -17.3%

$2,418,644/260,880

91.5%/149.7%

Food,Agriculture&Nutrition(K)

18,016 22.8% $1,897,841/137,686

143.4%/127.7%

Housing&Shelter(L) 33,618 -1.7% $1,222,854/243,164

76.2%/102.1%

PublicSafety,DisasterPreparedness&Relief(M)

23,150 4.8% $298,254/102,761

64.6%/89.2%

YouthDevelopment(O),32,795 41.1%

$839,890/128,385

64.5%/144.0%

GeneralHumanServices(P)98,297 13.5%

$2,764,556/241,815

64.0%/129.7%

ALLSOCIALSERVICES276,757 7.1%

$1,972,487/190,178

73.5%/122.3%

Incomparison:

Education(B) 210,559 10.1% $4,132,595/96,246

95.0%/194.5%

HealthCare(E) 45,130 1.5% $38,997,141/497,421

92.6%/90.6%

FinancinginSocialServiceNonprofitsSocialservicenonprofitsaretypicallyfinancedthroughamixtureofgovernmentgrantsandcontracts(~65%),privatefoundationsandindividualdonors(~18%),insurancepaymentsandfeesforservices(~6%),andothersourcesofrevenue(e.g.,investmentandbusinessincome)(~10%)(Morris&Roberts,2018).Thismixturevariesconsiderablybyfield(somefieldsattractmoreorlessgovernmentorprivatedollars)andregion,inregardstothepoolofpublicandprivatefundingavailableindifferentstatesandlocalities.Eachtypeoffundingcomeswithchallengesandopportunitiesfororganizationalindependence,stability,andmissionalignment.Theabilitytoearnmoneythroughfeespaidforservices(eitherdirectlyorviainsuranceorMedicaid/Medicare)variesgreatlybyfieldofpractice.Forexample,mentalhealthclinicsandearlychildhoodprogramsareoftenabletoeitherchargeonaslidingscaleorarereimbursedbyinsuranceorstateprograms.Medicaidreimbursements,inparticular,havebeenshowntomakeupanincreasingproportionofrevenuesinsomefields,particularlysubstanceabuseservices(Allard&Smith,2014).Inothersocialservicefields,incomethatisderiveddirectlyfromclientsintheformoffeesistypicallylow,asmanysocialservicenonprofitsprovideservicestopeoplewithlowincomes.Chargingfeesiseitherimpossible(e.g.servicesforthehomeless),orwouldcompromisewhoisabletotakepartintheprogram(e.g.servicesforyouthoremployment-basedservices).Chargingfeescanbecontroversial;somearguethatit

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mayleadtostrongerbuy-inbyparticipants,whileothersarguethatitcanleadtoexclusionofthemostvulnerable.2Fees,ofcourse,aredifferentthandues.Althoughrare,membershipmodelsofsocialservices(likeworkercentersorself-helpgroups)oftenchargeduesanddependingonthescopeandcostofservicescanachieveconsiderablefinancialindependenceinthatway.Althoughoftenlumpedtogetherinroutinereporting(becauseofthewaythatthisincomeisreportedtotheIRS),fundraisingfromindividualsandprocuringgrantsfromprivatefoundationsrequireverydifferentorganizationalpractices,andhavedifferentstrengthsandweaknessesfromamanagerialperspective.First,solicitingindividualdonationsthattotalameaningfulamountofmoneyisaverystaff-intensiveprocess.Eachdonorneedstobesolicitedindividually,andlargedonorscanbedemandinginregardstothekindofengagementtheyexpectfromtheorganization.Manysmalltomediumsizeddonorsareneededtomakeupforjustafewlargergrantsorcontracts.Althoughindividualdonorsaretypicallylessdemandinginregardstoquantitativeassessmentsofoutcomes,theyaretypicallyveryresistanttogivemoneyto“overhead.”WebsiteslikeCharityNavigatorunderlinetheconcernmanydonorshaveregarding“efficiency”and“trustworthiness”withtheirratingsystemsthatpunishorganizationsthatinvestininfrastructureorcapacityneeds.Thiscangreatlyhamperorganizations’abilitytogrowandretainflexibilitytomeetchangingconditionsontheground.Individualcontributionscanalsovarywidelyfromyeartoyearandmayrequiresubstantialboardinvolvement(Hodge&Piccolo,2005).Finally,thereisconsiderablecompetitionforthosedollarsasmostindividualdonationsintheUnitedStatesaregiventoreligiousorganizationsandhighereducation(GivingUSA,2018).Philanthropicdollarsareprizedtothedegreethattheyprovidemoreopportunityformissiondrivenprogrammingandmoreflexibilitythangovernmentcontracts,whiletheirfundingislargerandlesscapriciousthanindividualdonors(Froelich,1999).Privatefoundationsoftenvalueinnovation,whereasgovernmentfundersoftenfavoralreadytestedprogramming(Bushouse,2009).Thiscanmakeprivatephilanthropyappealingfororganizationstryingoutnewmodelsofservice.Ontheotherhand,becausemostprivatefoundationsseetheirstrengthasfundinginnovation,theytendnottofundlongterm,safetynet,“charitable”servicesthatmanysocialservicenonprofitsprovide(e.g.,communitymentalhealth,foodpantries,fostercare)(Hammack&Anheier,2010).Grantsfromprivatefoundationsalsotendtobesmallerthangovernmentcontractsbutstillrequiresignificanteffortinregardstoperformancemeasurement.Theytendtobemoretimelimited(e.g.a2-3yeargrantwithamaximumofonerenewal)and,likeindividualdonors,sometimessharplylimitfundingforgeneraloperatingexpenses.Finally,successfullyraisingmoneyfromprivatephilanthropyoftendependsonestablishingconnectionsandahighdegreeofprofessionalskill.Forthesereasons,grantsfromprivatefoundationscomprisearelativelysmallproportionofthefinancialportfolioformanysocialservicenonprofits.Despitethis,philanthropicfoundationsdoplayanimportantroleinsettinganideologicalagendainthesocialservices,whichisdiscussedbelowunder“currentchallenges.”

2Foraninterestinghistoryoffee-charginginthesocialservices,seeBrown(2018).

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Thus,formanysocialservicenonprofits,theremainingfundingcategory—governmentfunding—iswheretheactionis.Whetherstate,local,orfederal,governmentfundinghasbecomeveryprominentinthissectorandunderstandingitsroleandimpactisvitaltounderstandingthechallengesfacedbysocialserviceorganizationsmovingforward.Asnotedabove,governmentfundingcomprisesapproximately65%ofthebudgetoftheaveragesocialservicenonprofitintheU.S.Thisfigureobscuresconsiderablevariation,however.Insomesubfields,likechildwelfareorhomelessservices,thataverageismuchhigher—closerto90%—whereasotherfields,likelegalservicesforundocumentedimmigrants,thenumbermaybeclosetozero.Dependenceongovernmentfundingalsovariessignificantlybystate.Thefederalismofgovernmentcontractingperhapsmattersfornootherpartofthenonprofitsectormorethansocialservices.Governmentfundingcancomeinmultipleforms(e.g.,grants,fixed-pricecontracts,payforperformancearrangements,vouchers)andfromfederal,state,orlocalsources.Thetypeandtheoriginofthemoneymattersalotforhowconsistentandsufficientitis,whomightbeeligibleforservices,andwhatitcanbespenton.Intermsofwhyorganizationspursuegovernmentfunding,itgenerallyoffersthelargestdollarfiguresanditsconsistencyisprized(e.g.,contractsaregenerallyrenewable).Insomefields,suchaschildwelfare,agovernmentcontractistheonlywaytoaccessthepopulationofinterest.Inotherfields,suchasservicesfortheformerlyincarceratedorhomelessservices,donationsfromindividualsorfoundationsareverylowrelativetothecostoftheserviceprovidedandthusgovernmentsupportmaybeseenastheonlymechanismtofundtheneededservices.Shiftsinpolicythatfavorprovidingservicesinlieuofcashaid,alongwiththeshifttowardfederalblockgrantstostates,haveledtoanincreaseinthetypesofprogramsgovernmentsfund,withgreatdiversityandmanysegmentsofthepopulationserved.3Despitetheseadvantages,however,governmentgrantsandcontractscomewithalitanyofcritiquesfromsocialservicemanagers.Theseoftenincludeissuessuchasthecomplexityortimerequiredforbothapplyingforfundingandmandatedreportingrequirements,midstreamchangestothecontracts,andlatepayments—allofwhichservetodisadvantagesmallerorganizationswithlesscapacitytoweatherfundingvolatilityand/orlessprofessionalizedorganizationswhomaybechallengedtomeetapplicationandreportingrequirements(Boris,deLeon,Roeger,&Nikolova,2010).Perhapsthemostseriouschallengeassociatedwithgovernmentfunding,however,isthatitgenerallydoesnotpayforthefullcostofservices,whichforcesorganizationstosupplementthefundingthroughothermeans(e.g.,takingondebt,increasingprivatecontribution,spendingdownreserves)(Borisetal.,2010).This“deficitmodel”ofsocialservicefinancinghasbeenfoundtoleadtolowerserviceperformance,reducedfinancialstability,andthreatstothesocialrightsofrecipients(Marwell&Calabrese,2015).

3Forexample,insteadofamonthlywelfarecheck,participantsmaybeofferedjobplacementassistance,childcarevouchers,and/orareferralformentalhealthservices.

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The2012bankruptcyandclosureofHullHouse,JaneAddams’legendarysettlementhouse,after123yearsofprovidingsocialservicesinChicago,Illinois,isaprimeexampleofthetroublesthatcanresultfromoverrelianceongovernmentfunding,giventheproblematicpartnershipcharacteristicsdescribedabove(Clemenson&Sellers,2013).AccountsofHullHouse’sdemisegenerallynotethatatthetimeofitsclosureitwasmorethan90%governmentfundedandmorethan$3millionindebt.Thisdebtisgenerallyattributabletotheorganizationtakingoutbridgeloanstocoverlatepaymentsforgovernmentcontractsthatdidn’tcoverthefullcostofserviceinthefirstplace:atthetime,thestateofIllinoishadabacklogofabout$4billionindelayedpaymentstocontractors,andwastakingover6monthsonaveragetopayvendors.Becauseofthesizeofmanygovernmentcontracts,itiseasyfororganizationstobecomeoverlyreliantonthemandexperiencethenegativeeffectsofresourcedependence(Pfeffer&Salancik,1978).Inthiscase,thatoftenincludesmandatesregardingeligibilityforservices(e.g.specificagesordiagnoses),whatservicetechnologiesorprogrammodelsareappropriate,andassessmentbasedonpre-determinedoutcomes.Allofthesemayruncountertoanorganizations’mission,butoncedependencehassetin,thereislittlemanagerscando.Inordertopromoteorganizationalstabilityandavoidresourcedependenceandmissiondrift,socialservicenonprofitsaretypicallyadvisedtodiversifytheirfundingprofiles(Carroll&Stater,2009;Froelich,1999).Thiscanbedoneinanumberofdifferentways—bydiversifyingacrossrevenuetypes(donations,grants,contracts,etc)ordiversifyingwithintype.Anexampleofwithintypediversificationisseekinggovernmentcontractsfromdifferentagenciesatdifferentlevelsofgovernment—forexample,maintainingfederalcontractstodeliverHeadStartprogrammingwhilealsomaintainingstatechildwelfareandearlyeducationcontracts(typicallyadministeredbydifferentagencieswithdifferentlevelsofpoliticalsupport).Someevidenceexiststhatthisstrategymaybegrowing,asgovernmentfundingbecomesbothmorenecessary(formaintainingcapacityneeds)andmoreprecarious(withongoingstatebudgetcrises)(Park&Mosley,2017).TensionsRegardingGovernmentContractingTheday-to-dayissuesthatsocialservicenonprofitsexperienceareconcerningformany,buttheycanalsoobscureamuchdeepersetoftensionsabouttheroleofthesectorandhowthatrolemaybeshiftinginresponsetoincreasedenmeshmentwithgovernment.AsReich&Lechterman(thisvolume)note,therolesthatthenonprofitsectorplaysaredeterminedbywhichpoliticalframeworksareinplay.Privatelyprovidedsocialservices,fundedbygovernment,havebecomestandardpartlybecausethisarrangementisappealingtopeopleacrossthepoliticalspectrum.Thisisreflectiveofthelargeradoptionofneoliberalthoughtandtheattendantgrowthofmarket-orientedinterventionsineverysphereoflife(Birch&Siemiatycki,2016).Assuspicionofgovernment’sabilitytosolvesocialproblemsgrows—andcitizensareincreasinglybeingconceptualizedasconsumers—anonprofitsectorthatisgovernedaccordingtomarketprinciples(efficiency,competition,etc)hasemergedasan

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obviousalternativetogovernmentprovidedsocialservices.Evidencesuggeststhat,intheUnitedStates,mostpeopleprefernonprofitstogovernment,trustthesectormore,andoftendonotrealizethatitisgovernmentfundingthatcreatesthepossibilityofsucharobustsocialservicenonprofitsector(Mettler,2011;Park,Mosley,&Grogan,2018).Thus,althoughintheUnitedStatesthepopularconceptionofsocialservicenonprofitsoftenincludesarhetoricalfocusonthe“moralcharacter”ofthesector,privatizationresolvestwoother,perhapsmorecentral,concerns.Theseare1)thedeepsuspicionsmanypeoplehaveofthestateinterferingwith“privatematters”—andalmostallsocialservicesaddresssuchmatters—and2)thedesirefromthestatetosavemoneyandoutsourceresponsibility.Theseconcernssuggestthatitisindeedtheprivatenessofnonprofitorganizationsthathasledtoincreasedprivatization(asopposedtotheirgoodness).Theyare‘moral’partlybecausetheyareprivate.Tothatextent,themoralcharacterargumentservesmoreasmyth,perpetratedbybothsidessoastogrowthecontractingrelationshipsthatbothsideshavebecomedependenton.Itisimportanttonotethat,intheUnitedStates,nonprofitshavelongbeencontractedbythestatetoprovidesocialservices(Salamon,1987b;S.R.Smith&Lipsky,1993).Forexample,thereareexamplesofprivatizedchildwelfareservicesdatingbacktotheearly1900s.Likewise,manyservicesthatweconsider“privatized”werenever“public”inthefirstplace:theyweredevelopedafterprivatecontractingofpublicwelfareserviceswasestablishedasthedefaultmodeofdelivery.ExamplesofthesetypesofservicesincludedomesticviolenceandHIV/AIDSservingorganizations,bothofwhichcameaboutafterlongadvocacycampaignsbypeopleworkinginthefield.Inotherwords,fieldsthatdevelopedthroughexclusivelyprivatefundingcanoftensuccessfullyworktoconvincepolicymakerstotakeuptheircauses,encodingthemasstatutoryappropriations.Thus,whatwehaveseenismoreaptlydescribedasagrowthingovernmentfundingofsocialservices—andthemechanismofcontractingouttodeliverthem—ratherthanprivatizationperse.Therehasalsobeenashiftinprovidinghelptothepooranddisadvantagedintheformofsocialservices,ratherthandirectcashaid.Ofcoursethatshifthasledtoyetmorecontractingandengagementfromprivatesocialservicenonprofits.Despitethislonghistory,thereisalonglineofscholarsandcriticswhodecrytheeffectsthatcontractinghashadonthenatureofsocialservices(Alexanderetal.,1999;Eikenberry&Kluver,2004;Hasenfeld&Garrow,2012)—somegoingasfarastolabelthephenomenonthe“nonprofitindustrialcomplex”(A.Smith,2007).Ontheotherhand,othershavepraisedtherelationshipasoneof“partnersinpublicservice”wherenonprofitsgainresourcesandlegitimacywhilegovernmentgainsgreaterflexibilityandefficiency(Berger&Neuhaus,1977;Salamon,1995).Whenassessingthiscontroversy,therearetwoissuesathandthatareconceptuallydistinct:First,theexistenceandextentofacontractingrelationshipintheory,andsecond,thenatureofhowthosecontractsareawardedandadministeredinpractice.Althoughtheyareoftendiscussedintandem,theyneedtobeunderstoodseparately,asthesecondisfarthornierthanthefirst.

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Onthefirstpoint,contractingisunlikelytoslowdownforbothpragmaticandphilosophicalreasons.Itisbakedintoourwelfaresysteminsuchawaythatdismantlingtheapparatuswouldbenexttoimpossibleanditisbasedonargumentsharkeningbacktonotionsofgovernment,market,andvoluntaryfailurethatfewpeopledisagreewith(Steinberg,2006).Widedistrustinthegovernmenttoprovideservicesinwaysthataresensitiveandtargetedtocommunityneeds—alongwithgovernment’sreticencetotakeonthecost—meansthatitisunlikelytoadoptalargerroleindirectlydeliveringsocialservices.Anddespitethegrowthinsocialentrepreneurshipitisnotfeasibletothinkthefor-profitsectorwilltakeonacomprehensiveroleinsocialserviceprovisionoutsideofcontractingrelationships(becausethereislittlemoneytobeearneddirectlyfromserviceconsumers).Withprivatedonationscomprisingonlyabout20%ofthetotalrevenueforthesector—andlittleevidenceforcrowd-out(Bekkers&Wiepking,2010;Payne,1998)—inordertomaintainourcurrentlevelofsocialservices,governmentcontractingisgenerallyseenasnecessary.Itisthesecondpoint—thenatureofhowthosecontractsareawardedandadministeredinpractice—thatismuchmorecontroversial.Thisgoessignificantlybeyondthefundinginsufficienciesandpoorpartnershippracticesengagedinbymany(themselvesunderfunded)publicsectoragencies.Becausecompetitionisembeddedinthecontractingrelationship—is,infact,partofitsappealtomany—muchofthecontroversystemsoverwhatthatcompetitionisbasedon:efficiencyoreffectiveness.Contracteesoftenperceivecontractcompetitiontobeaboutblindefficiency—whichorganizationcanprovidethegreatestamountofservicesforthelowestcost(Borisetal.,2010).Thosewhoseeitthiswayoftenbelievethatcostconcernsactuallydiscouragethekindofinnovationandinvestmentthatmayallowforgreatereffectivenessoverthelongrun.ThisisnotgenerallyhowcontractingisframedbyproponentsofNewPublicManagement,however.Althoughefficiencyandcostsavingsareoftenmentionedasbenefits,contractingisoftenpresentedasawaytoboosteffectivenessthroughraisingperformance,promotinginnovation,andincreasingresponsiveness(Heinrich&Choi,2007;Kettl,2011).Researchshowsthatcontractingdoesnotnecessarilysavemoneyorimproveperformance—infact,inhealthcareithasbeenshowntodotheopposite(Duggan,2004).Otherresearchindicatesthatpublic-nonprofitpartnershipshavenoeffectonefficiency,effectiveness,orequity(Andrews&Entwistle,2010).Buteitherway,ifcontracteesperceivetheyarebeingrewardedprimarilyforefficiency,thatiswhattheywillaimfor,potentiallyleadingtotheperverseoutcomeofsacrificingeffectiveness.Thisistroublingbecausethereisevidencethat,insocialservices,competitionmayactuallybemoremyththanreality(Lamothe&Lamothe,2009;VanSlyke,2003).Inmanylocales,therearenotenoughproviderstoprovidemeaningfulcompetitionandlackofcapacityinadministrativeagenciesmeansthatcontractsarepoorlyoverseen.Thesefindingsstrengthentheargumentthatcontractingmaybemoresymbolicandpoliticalinitsnature,thanarationaleconomicchoice.Regardless,asaresultofmandatesembeddedinthosecontractssocialservicenonprofitsarecurrentlyexperiencinganuptickindemandsaroundperformancemeasurement,professionalization,andefficiencythatmanyarestrugglingtoadaptto.Furthermore,these

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demands—drawnfrommarket-orientedthinking,butdrivenbygovernment—isironicallywhatisleadingsocialservicenonprofitstobecomemorebusinesslikeintheirpractices,andpotentiallythreateningthe‘character’ofthesectorthatisheldupaspartofthepurposeforcontractinginthefirstplace.Performance,Professionalization,andEfficiencyDemandsTherehavelongbeenconcernsaroundunderperformanceandinefficiencyinsidesocialservicenonprofits,andsomeofthatconcerniswellfounded.Thus,contractinghasbroughtaboutsignificantconcernsaroundaccountability,notuncommoninprincipal-agentrelationships.Thisneedisonlyheightenedgivenconcernsaboutwasteinpublicagenciesandsuspicionregardingsocialwelfareparticipants,whoareoftenconstructedtobelazy,dependent,scammingthesystem,orunabletoberehabilitated(Fraser&Gordon,1994).Giventhislevelofdistrustallaround,quantitativeperformancemeasuresarenowwidelyusedinordertodemonstrateproperstewardshipoflimitedresources,andprovideevidenceofeffectivenessonwhichfuturefundingcan(theoretically)bebased.GroundedinprinciplesofNewPublicManagement,thereisnowavastinternationalliteratureonhowthehabitsandincentivesofbothindividualsandorganizationshaveshiftedasaresultofagrowingauditculture(McLaughlin,Ferlie,&Osborne,2002;Power,2003).Performancedataisrequestedandusedindifferentways,withdifferenteffectsfororganizations.Coercivepressuresforsuchdatafromfundersforaccountabilitypurposeshasledtoagrowthinsharedinstitutionalnormsaroundthevalueofsuchdatafordeterminingimpact—avaluethatorganizationsareexpectedtoshareandthusproducedatathatcanbeusedforinternalcontinuousimprovementprocesses,aswellasexternallyorientedaccountability(Lynch-Cerullo&Cooney,2011).Inaddition,althoughmostcontractsdemandsomekindofdataregardingperformanceoutcomes,therehasalsobeenagrowthinperformance-basedcontractingandpay-to-succeedmodels,inwhichthecontractees’paymentisbasedontheirabilitytomeetpre-settargets(McBeath&Meezan,2010).Thisisasignificantstepupinregardstoaccountabilityexpectations.Socialimpactbondsareanotherformofperformancecontractingthatisattractingsubstantialattention.Socialimpactbondsaremulti-partycontractsbetweengovernments,privateinvestors,andsocialservicenonprofitswheretheinvestorsprovidemuchoftheinitialcapitalfortheprogram,buthavemoresayinhowitisrunandstandtoreapprofitsiftheprogramissuccessful(Olson&Phillips,2013).Theseinitiativeshavebeenpraisedfortheirabilitytoinjectneededcapitalintothesectorandforrigorouslyevaluatingperformance,buthavebeencritiquedforthenotionthatprivateinvestorsshouldbenefitfromtheperformanceofnonprofitsattheexpenseoftaxpayers(andstaffsalaries),andforpromotingthenotionthateverythingimportantaboutaprogramcanbequantifiableasa“socialreturnoninvestment”(Brest,thisvolume).Thus,whileperformancemeasurementhasgrownsubstantiallyinbothscopeandpractice,itislessclearhoweffectivethosemeasureshavebeeninactuallyimprovingservices.Forexample,

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KoningandHeinrich(2013)findthatascontractsmovefrompartiallyperformancebasedtofullyperformancebased,organizationsaremorelikelytotrytogamethesystemthroughcreaming(e.g.,selectingclientsbasedontheirlikelihoodofsuccess)andotherstrategiesforartificiallyraisingperformancenumbers,butdonotfindevidencethisactuallyimprovesprogramoutcomes.Moreover,theyfindthatfullyperformancebasedcontractsleadtoincreasedperformanceonshort-termmeasuresofsuccess(e.g.jobplacement)butnotlongtermmeasures(e.g.jobduration).

Becauseweknowthatperformancemanagementcanleadorganizationstounhealthypractices,yetresistingmeasuremententirelyalsoseemsunhealthy—afterall,organizationswanttobeeffective,confidentintheirapproach,andinvestinthingsthatwork—alargeportionoftheliteratureonperformancemeasurementisfocusedonhowto“doitright.”Peopleworryaboutimprovingindicators,aboutwhattomeasure,aboutconnectiontomission,howtocreateanew‘culture’arounddatauseandmore(Janus,2018).Atthesametime,demandsonorganizationsto“domorewithless”andthefactthattheirverysurvivaldependsoneverimprovingoutcomesincentivizesorganizationstodecoupleperformancemetricsfromday-to-daypractice(Meyer&Rowan,1977).Thiscanbeasextremeasoutrightfalsificationorassimpleasthecommonpracticeofdoingcasenotesandotherpaperworkattheendofthemonth(meaningitisnotactuallyusedfortreatmentpurposes,merelyforauditing,leadingtoinefficiencies).Socialservicenonprofitsoftenworkwithstigmatizedandpowerlesspopulationsandfeelstigmatizedandpowerlessthemselves.Thiscanleadtodecoupling,husbandingresources,andamindsetthatisfocusedmoreonshort-termsurvivalthanlongtermimpact.Considerableworkexistsshowingsharpdivisionsbetweenfrontlineworkersandthedatasystemswithwhichtheyarecoercedtocomplyinregardstoperceptionsofmissionandbeliefsaboutthenatureandgoalofthework(Meagher&Healy,2003).Thisleadstostafffeelingdiscreditedandalienatedandsometimesprogrammaticdecisionsbeingmadethatdonotmatchlong-heldpriorities(Spitzmueller,2018).Accountabilitydemandsareoftentiedtorestrictionsonhowfundingisdirectedinternally,whichcanchangethenatureoftheservicesprovidedortheprogrammixoverall.Forexample,fundingmayberestrictedforusetowardsmeasureableprogrammaticfunctionsratherthancivicengagementandadvocacy.Alternatively,fromaclinicalperspective,fundingisoftentiedtotheuseofspecificevidence-basedpractices.Suchpractices,oftenmanualizedandwithlittleattentiongiventoculturalorcontextualdifferences,canleadtotensionswithtraditionalvaluesinsocialservicepracticearoundperson-centeredcareandco-productionofservices.LehnBenjaminandcolleagues(Benjamin,2012;Benjamin&Campbell,2015)furtherdirectourattentiontomisalignmentsbetweenaccountabilitydemands,thenatureoffrontlinepractice,andtheroleofclients.Theyarguefrontlinesocialservicesisgenerallyaboutworkinginpartnershipwithclientsinwaysthatfundamentallyresistmeasurement,becausesocialservicepracticeisnuanced,notreplicable,andbasedonsocialandprofessionalskill,notroutine.Inotherwords,therearesomecomponentsofgoodpractice—ortypesofpractice—thatyoucannotquantitativelymeasurebutthatdoesnotmeantheyarenotworthdoing.Thesearethingslikehelpingclientsmaintaintrustingrelationshipsorbuildconfidence,helping

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communitiestakeownershipoverdecisions,orcertainkindsofsocialcapitalbuilding.Inthisview,socialserviceprogramsarenotequivalenttosocialservicepractice,improvementsinwhichareunlikelytobegainedthroughmorerigorousmeasurementsystems.Atthesametime,performancemeasurement,datademands,andreportingrequirementsallrequireincreasedprofessionalizationinthesector(Suárez,2011).Theyare,infact,co-constitutivewithit,asprofessionaltrainingisoftenneededtokeepupwithanalyticandstrategictrends,butalsopushesthosetrendsfurtherasleadersandorganizationscompete.Whileprofessionalizationwasalreadyontheriseasaresponsetoothertypesofinstitutionalpressures,thiscreatesachallengeforsomesmaller,communitybasedorganizationsinregardstomaintainingtiestothecommunity,andinternallyreflectingtheclientbasetheyserve.Itmayalsobeleadingtodecreasedvoluntarism.Manysocialservicenonprofitsarealmostcompletelyprofessionalized,involvingveryfewvolunteers,duetorequirementsaroundconfidentiality,specializedtraining,andtheneedforaccountability.NavigatingConflictingDemandsUltimatelythesetrendshaveledtosocialservicenonprofitslookingandactingmuchlikefor-profitbusinesses,largelyatthedemandofgovernmentcontractors(andsometimesprivatephilanthropy).Outcomegoalsareprizedoverprocessgoals,whichcreatesconflictingdemandsfororganizationswhosemissionsrelyonanuanced,indeterminate,non-standardizedprocessinordertomeettheiroutcomes.Figure1demonstratestherelationshipbetweengovernmentfunding,theaccountabilityandperformancedemandsdiscussedabove,andultimatelythechallengestosocialservicenonprofits’expressiveroles(generallyseeninacommitmenttovoluntarism,strongcommunityconnections,promotionofcivicengagement,andparticipationinadvocacy).Essentially,contractingregimeshaveraisedconcernsaboutaccountabilitywhichhasledtoincreaseddemandsaroundperformanceandprofessionalization.Thosedemandshave,inturn,ledtoanemphasisoninstrumental,marketorientedoutcomegoalsandchallengestoexpressiverolesandprocessgoals.

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Figure1. Relationshipbetweenincreasedgovernmentfundingofsocialservicesandcrowdingoutofnonprofits’expressiveroles.

Argumentsthatnonprofitsarebecomingmorefor-profit-likeormarketorientedarenotnew(Weisbrod,1997)butthemorerecentemergenceofhybridorganizationsandsocialentrepreneurshipmodelsinthefor-profitsectorhaveledtoaresurgenceofinterestinthetopic.UsingScott’s(2013)theoryofthethreepillarsofinstitutions(regulatory,normative,andcultural-cognitive),Child,Witesman,andSpencer(2016)arguethatalthoughsectoralconvergenceisarealitytosomeextent,stronginstitutionalnormsupholdsectoraldifferencesinthemindsofpractitioners.Overtime,however,theyfindthatperceptionsofsectoraldifferencestendtobeconcentratedaroundthewaysinwhichthesectorslegallyaredifferent—e.g.regulatoryandfundingconcerns—ratherthanonesectorbeingmoreexpressivelyorientedthantheother.BromleyandMeyer(2017)alsotakeaninstitutionalviewofsectoralconvergence.Theyfocusourattention,however,onthewaythatallsectorsarechanging—notjustnonprofits—andnotethatthesechangesaregenerallyculturalinnature.Itisnotthatnonprofitsarepassivelyrespondingtopressuresputonthembygovernment,butthatallthreesectorsarerespondingtoalargersetofculturalshiftsthathavetakenplacesincetheSecondWorldWar,wherescientificrationalityisprized.Furthermore,somepracticesassumedtobe“business-like”inthenonprofitsector—suchasbureaucraticstructureandcodesofconduct—havetheiroriginingovernmentandhighereducation.Thus,whilesectoraldifferencescontinuetoshapeactioninimportantregulatoryways(e.g.howorganizationsareallowedtogenerateandspendresources,individualvs.boardgovernance)Iarguethatthenormativeandcultural-cognitiveinstitutionalexpectationsaroundtheproperexpressiveroleforsocialservicenonprofitsmayberelaxing.First,normativeexpectationsaboutthe“right”waytobehave(eitherexternallyorinternallyimposed)arenowlargelythesameforallsectors—efficient,entrepreneurial,operatingataprofessionalremove.

Governmentfunding&contracting

Accountabilityconcerns

Demandsaroundperformancetracking&evaluationGrowthinprofessionalization

Focusoninstrumental,market-orientedoutcomegoals

Crowdingoutofexpressiverolesandprocessgoals

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Second,inthecultural-cognitivesense,itisnow‘taken-for-granted’inthenonprofitsectorthatafocusonperformance(asopposedtocommunityconnection)isneeded,thatlargergrantsandcontractsdemonstrateamoresustainableoperation(asopposedtorelyingmoreonsmallerdonationsoriginatingfromthelocalcontext),andthatcost-benefitassessmentsareavalidwayofevaluatingtheworthofaprogram.Thus,sectormattersinthatitremainsrelevantandconsequentialtothefinancialviabilityandrevenuemodelofnonprofitsocialserviceorganizations.Itislessclearthatitmattersintermsoftheirinternaloperations,staffingpatterns,programmodels,andrelationshipwithcommunitymembers.Anditisverydifficulttoseehowexpressivecommitmentstovoluntarism,strongcommunityconnections,promotionofcivicengagement,andparticipationinadvocacyaresupported,evenifthosearethethingsthatdrewmanypeopletothenonprofitsectorinthefirstplace.Contractingandaccountabilitypressuresleavesocialservicenonprofitsinaliminalposition,asthemultiplexbeliefsbehindcontractingfundamentallyconflict:wecontractwithnonprofitsbecauseoftheircommunitybasedcharacterbutalsobecausecontractingissupposedtobemoreefficient.Thus,itmakessensethattheywouldbeheldtotraditionalexpectationsofthenonprofitsectorbutalsobyexpectationsnotunlikethosethatwewouldplaceuponfor-profitorganizations(Sanders,2015).Somehowwebelievethatsectorshouldmakeadifferenceinregardstoexpressivecharacter,whilewebelievethatitshouldnotinregardstoinstrumentalroles.Althoughnonprofitscholarsandpractitionersoftenmakenormativeclaimsaboutthevalueofthesectorforadvancingcivilsocietyandpromotingthepublicgood,whenitcomestosocialservicenonprofits,fundersemphasizegettingthejobdone,donewell,andascheaplyaspossible.Thecaseoffaith-basedsocialservicesThecaseoffaith-basedsocialservicesshowsthatevenwhenvaluesandcharacterareprized,theinstitutionalizednatureofsocialserviceprovisionisapowerfulforce.Thefaith-basedsocialservicessubsectorreceivedagreatdealofattentionintheearly2000’sfortheirhypothesizedabilitytoprovidebetterresultspreciselybecauseoftheirvalues-basedapproach(Kennedy,2003).Faith-basedorganizationsareoccasionallypointedtoasemblematicoftheexpressivequalityofthenonprofitsector(Olasky,1995).Theseargumentshavebeenaugmentedbyinitialevidenceindicatingthat,giventherightmatchbetweenorganizationandconsumer,faith-basedsocialservicesmaybemoreeffective(presumablyduetothewaytheserviceisprovided)(Monsma,2006).Thatsaid,evidenceonthispointislimitedandmixed:forexample,Wuthnow,Hackett,andHsu(2004)foundnodifferencesinrecipients’perceptionsoftheeffectivenessandtrustworthinessoffaith-basedversusnon-sectariannonprofits.Oneoftheprimarydifficultiesindeterminingiffaith-basednonprofitsprovideservicesdifferentlythanothernonprofitsisthatwhatisandwhatisnotafaith-basedorganizationisdifficulttoobjectivelydefine(Jeavons,2004).Researchhasshownthatself-definedfaith-basedsocialservicecoalitionsvarywidelyinthedegreetowhichtheyexhibitandembodyreligiouscharacteristics(Ebaugh,Chafetz,&Pipes,2006)andamongfaith-basedorganizations,thosethataremorereligioushavebeenshowntobelesslikelytoseekorreceivegovernment

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funding(Ebaugh,Chafetz,&Pipes,2005),potentiallyinsulatingthemfromthepressuresdiscussedhere.Thatsaid,mostresearchshowsthatthefactthatfaith-basedorganizationsarehighlyintertwinedwithsecularnonprofitsandgovernmentastheycarryouttheirworklikelyaffectsthemjustasmuchaswhetherornottheyaregovernmentfunded,andthatultimately,faithbasednonprofitsjustarenotallthatdifferentfromsecularones(Sosin&Smith,2006;Wuthnow,2004).Ingeneral,thefactthattheyareopentoasecularworldandresponsivetothesamesetofinstitutionalpressuresislikelyasimportantinshapingthenatureandcharacteroftheirprogrammingaswhetherornottheyreceivegovernmentfundingorwhetherornottheyarefaith-based(foranexceptionseeVanderwoerd,2004).Inperhapsthestrongesttestofthisargument,ChavesandTsitsos(2001)findunequivocallythatthesocialservicesreligiouscongregationsprovidearenotmoreholisticorintensivethanothernonprofits,andthosecongregationsthatcollaboratewithgovernmentarenotlesslikelytoprovidethosekindsof‘meaningful’services.Theyfirmlyconcludethat“Religiouslybasedsocialservicesare,ingeneral,hardlyanalternativetosecularnonprofitorgovernment-supportedsocialservicedelivery.Theyare,rather,partofthatworld,likelytoriseandfallwithitratherthanincounterpointtoit.Liketherhetoricportrayingnonprofitsingeneralasanalternativetogovernment,therhetoricportrayingreligiousorganizationsascarriersofasocialservicealternativethatispeculiarlyholisticandtransformationalobfuscatestheempiricalreality.”(p.680).CurrentChallengesResultingfromBlurringofRolesTheconsequencesofthisblurringofrolesaremany.Thissectionreviewsthreewaysinwhichsectorblurringiscreatingtensionsinthesocialservicesector:Consolidationofthesector,changesinadvocacynormsandanincreasedroleforsocialservicenonprofitsingovernance,andnewrolesforprivatephilanthropyandcollaborativeefforts.

ConsolidationofthesectorIncreasedcompetitionforfunding,needforsubstantialreserves,anddemandsforperformanceandaccountabilitydataallhaveputsignificantpressureonsmallcommunity-basedsocialserviceorganizations.Atthesametimecontemporarysocialservicemanagementhasbecomesignificantlymoreprofessionalized,executivedirectorsareoftenrewardedprimarilybasedonorganizationalgrowthratherthanconsumersatisfaction,andboardmembersareoftenrecruitedfortheirconnectionsandabilitytobrokerfundsratherthansubjectareaexpertise.Thesetrends,together,haveresultedinagrowthinmergersandtakeoversinthesocialservicesnonprofitsector,resultinginaconsolidationofthesectorandfurthershifttowardslarge,professionalizedorganizationsoperatingatsomeremovefromthecommunitiestheyserve.Italsoadvancesinstitutionalization,asgenerallythenormsandpracticesofthedominantorganizationwilloverridethoseoftheweakerone(Field&Peck,2003).

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Becausesmallsocialserviceorganizationsoftenhaveatleastafewcontractswiththestate,andsometimesownvaluablerealestate,theyhavebecometargetsforacquisitionbylargersocialserviceagenciestryingtoconsolidatetheirmarketposition.Whilethisissometimespresentedasawayofenhancingclientservicesorimpact,itgenerallyalsostemsfromthedominantpartner’sdesiretoreducecompetitionandimprovevisibility,sometimesinanewfieldorgeographiclocation(Benton&Austin,2010).Thisisaclassicwayofmanagingtheexternalenvironment(Pfeffer&Salancik,1978).Thisconsolidationcallsintoquestiontraditionaleconomictheoriesofthenonprofitsector(Hansmann,1987).Organizationsarecaughtbetween1)traditionalexpectationstohavetheclosecommunityconnectionsandpersonalconnectionsthatfacilitatetrustinconditionsofinformationasymmetry,and2)theneedtomakebusinessorienteddecisionstomaintainandgrowprogramsthatarefundedbythestateandjettisonprogramsthatarenotlucrative—akeyconsequenceofmostmergers.Theseconflictingdemandsoftenresultindecision-makingbasedonprofit-makingcalculus—similarinessentiallyallrespectstowhatafor-profitcompanywoulddo.Inthiscase,whatdifferencedoesnon-profitnessmake?Atthesametime,thepoliticalandcivicroleofthesectorisalsochallenged:whilemergersmayincreasecapacityintheareasofdataandperformancemeasurement,marketing,governmentrelations,andfundraising,itisunlikelytofacilitatecivicengagementefforts,clientinvolvementintheorganization,ormorelegitimaterepresentationregardingcommunityneeds.ChangesinadvocacynormsandincreasedroleingovernanceSomemayarguethatthattheadvocacyandrepresentationrolethatnonprofitshavetraditionallyplayedonbehalfoftheirconstituentsiswhatdistinguishesthemfromthefor-profitsector(Berry&Arons,2003).Traditionally,peoplehavepointedtoadvocacyengagementasevidenceofnonprofits’commitmenttomissionandwillingnesstostandwithandforthecommunitiestheyserve.Doestheadvocacythatsocialservicenonprofitscarryoutreallydothis,however?Researchhasshownthatdependenceongovernmentfundinghasbroughtaboutlessadvocacyoutsideofthestatusquo(Mosley,2012).Giventherelianceoncontractsinthesector,advocacyhasbecomeanimportantwayformanagerstoinfluencethetaskenvironmenttomaintainorganizationalstability(Marwell,2004).Organizationsthatarereliantongovernmentfundingarestronglyincentivizedtoadvocateinordertobuildsupportforpreferredpracticeideologies,increaselegitimacywithdifferentstakeholders,andgenerallyworktosupportincreasedpublicfundingintheirareaofservice.Thisadvocacyislargelybuildonestablishingtrusting,reciprocalrelationshipswithkeyadministratorsandlegislatorsandisfocusedlargelyoninsidertactics.Thus,totheextentthatthesectorhasbecomeanarmofthestate,itisstronglychallengedtopresentanykindofmeaningfulcounterforcetoit(Hasenfeld&Garrow,2012).Ratherthanhelpingtomodifypowerimbalancesinsocietybyusingtheirownpowerandlegitimacyonbehalfofthepopulationtheyserve,socialserviceorganizationsarefrequentlyseekingto

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consolidatetheirpowerinthesystem—inthiswayactingmoresimilartoatraditionalnotionofaninterestgroupthansocialjusticefocusedadvocates.Alongwithanadvocacyrolethatisincreasinglyfocusedoninsidertacticsandmaintenanceofgovernmentfunding,socialservicenonprofitsareincreasinglyplayinganimportantroleincollaborativegovernanceregimes.Definedasa“modeofgovernancethatbringsmultiplestakeholderstogetherincommonforumswithpublicagenciestoengageinconsensus-orienteddecisionmaking”(Ansell&Gash,2008,p.543),collaborativegovernanceisanessentialpublicmanagementtacticthatreferstothenumerouswaysinwhichpublicagenciesarenowtryingtocollaboratewithprivatestakeholders,likesocialservicenonprofits,toimproveservicecoordination,policyimplementation,andpromoteaccountabilityacrosssectors.Whatcollaborativegovernancelookslikeonthegroundaredifferentprocesses—oftencalledadvisoryboards,taskforces,orsteeringcommittees—thatbringtogetherrepresentativesofgovernmentwithstakeholdersfromthecommunity,includingrepresentativesofsocialservicenonprofits.Theseprocessesaregrowinginnumberandsocialserviceorganizationsinfieldslikementalhealth,childwelfare,homelessness,andearlychildhoodeducationareveryactiveandinvolvedparticipants.Theseprocessesopenupconsiderableopportunitiesforsocialservicenonprofitstobeinvolvedinthepolicyprocess,provideinputoncrucialdecisions,andshareexpertisebecauseitquiteliterallygivesthemaseatatthetable.Althoughperhapsunconventionalforthosewhoexpectadvocacytolooklikestandingonthestepsofthestatehousewithasignandamicrophone,thisisaclearadvocacyroleandemergingevidencesuggeststhatprovidersseeitassuch(Mosley,2014).Thislargerroleingovernance,however,pointstoavarietyoflong-standingquestionsaboutindependenceandlegitimacyofrepresentation(Levine,2016).Advocacycanbeusedtoimprovedemocraticrepresentation,raisingthevoicesandtheinterestsofthosethatarenotwellrepresentedinformalpolitics.Butthatcanonlyhappeninalegitimatewayifclientsareinvolvedinadvocacy,orhaveanopportunitytogiveinputthemselves—andinanincreasinglyprofessionalizedsocialservicesectorthatisrare(Mosley&Grogan,2013).Conflictingdemandscanbeseeninthatleadersofsocialservicenonprofitsareoftenaskedtoparticipateinsuchprocessestospeakonbehalfoftheircommunityorclients,butmayendupspeakingmostlyinwaysthatadvancetheinterestsoftheirorganizationortheirindustry.HowdifferentisthisfromAstroturfadvocacycarriedoutbycorporateinterestgroups(Lyon&Maxwell,2004;Walker,2016)?Grantedparticipationinagovernanceroleisdifferentthanlobbyinggovernment(Marwell&Brown,thisvolume)butintentionsandthelegitimacyoftheresultingrepresentationstillneedstobeinterrogated.Collaborativegovernanceprocessescanalsoleadtoissuesofexclusivityanddivisiveness(Johnston,Hicks,Nan,&Auer,2011).Whichorganizationsarechosentoparticipate?Iforganizationscanfreelyjoin,whichhavetheirvoiceheardclearly?Towhatextentaredivisionsinthefield—sometimesreflectingthedifferencesbetweenlarger,professionalizedorganizationswithsubstantialgovernmentfundingandmorecommunitybasedorganizations—reflectedinthosediscussions?

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Interestingly,socialserviceproviders’pursuitofmorereciprocalrelationshipswithcontractmanagers—tomovethoserelationshipfromaprincipalagentmodeltoaprincipalstewardmodel(VanSlyke,2007)—andgrowthincollaborativegovernancehasledtononprofitsocialserviceprovidersexperiencingincreasedadvocacyopportunitiesandhavingthepotentialforgreaterinfluence.Thatmeansacouplethings.First,advocacyisincreasinglypartofeverydaypracticeforsocialservicenonprofits.Contrarytosomeassumptions,governmentfundingincentivizesadvocacyengagementratherthansuppressingit,andcloserrelationshipswithgovernmentagentsprovidesincreasedopportunityandaccess(Chaves,Stephens,&Galaskiewicz,2004;DeGraauw,2016;Mosley,2010).Atthesametime,advocacyislikelytobemoreamicable,lessoppositional.Thereareincreasedopportunitiesforcollaborationandimpactthroughformalandinformalchannels,butatthesametime,thereisanincreasedriskofcooptation(Piven&Cloward,1977).Insomeways,socialservicenonprofitshavebecomeakinto“theloyalresistance:”advocacyispresent,butmostlyaimstoworkwithinstatesanctionedsystems,hopingtogatheralargersliceofthepie—ratherthangrowingthepieforall,orchallengingbasicassumptionsaboutthesocialrightsofcitizens.Thisclearlycallsintoquestiontraditionalpoliticaltheoriesofthenonprofitsectoranditsabilitytomaintainanindependentvoice(Clemens,2006).NewrolesforprivatephilanthropyandcollaborativeeffortsA‘hollow’statethatlacksinternalcapacityandismorefocusedoncontractingoutthanonprogramdesignhadledtoopportunitiesforideologicalleadershiponthepartofprivatephilanthropy.Inthisway,eliteinterestsarereproducedinthesector,whichisusedasa‘trialground’fornewideas(Reich,2016).Charterschoolsaretheexamplethatcomestomostpeople’sminds(Reckhow,2012),butthisphenomenonhappensinsocialservicestoo,notablyaroundsocialentrepreneurshipmodelsofserviceandthepromotionofspecificinterventionmodels.Socialservicenonprofitshavelongbeenpulledtorespondtomultiplestakeholders:communitymembers,consumersofservices,activists,boardmembers,individualdonors,philanthropicpatrons,andothers.Oftenthereisalignment—butwhenstakeholders’interests,desires,orbeliefsconflict,whichgroupisgivendeference?Inordertomaintainbothlegitimacyandnonprofits’bottomline,itisoftenfundersorpotentialfunders(DiMaggio&Powell,1983;Pfeffer&Salancik,1978).Inthissense,whilephilanthropydoesstrengthentheinnovativecapacityofthesector,itisalsochannelsattentionandultimatelylikelyhasalargerimpactonsocialservicesthroughitsideologicalleadershipandinvestmentinconceptsandprogrammaticinnovationsthanitdoesthroughdirectdonationstosocialservicenonprofitsthemselves(Bushouse&Mosley,2018;Reckhow&Tompkins-Stange,2018).Onewaywehaveseengrowthintheinfluenceofprivatephilanthropyisthroughinitiativestogrowcollaborativeapproaches.Collaborationacrosssocialservicefieldsisoftenarguedtobecriticaltosolvingwickedproblems(likehomelessnessorsubstanceabuse)byreducingfragmentation,promotingaholisticapproach,andfacilitatingmutuallearning(Thomson&Perry,2006).Fundersvalueparticipationincollaborativeeffortsbecauseitsignalslegitimacy,a

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supportsystem,anunderstandingofthecomplexityofproblems,andacknowledgementofrisksharing.OneofthebestknownofthesecollaborationeffectsistheCollectiveImpactmodel(Kania&Kramer,2011).Generallyfunderdriven,collectiveimpacttakesmuchofwhatthescholarlyliteratureoncollaborationhasbeenarguingandrepackagesitinapractitioner-friendlyway.Ithasseenwideuptakeinjustafewshortyearsasawayofbringingcommunitiestogether,coordinatingefforts,anddemonstratingoutcomesthroughsharedmeasurementsystems.Thistypeofcollaborationcomeswithahostofwarningandcritiques,however,mostofwhichfocusontheinternalpowerdynamicsofsuchcollaborations(doesmostofthecreditandfundinggothebiggestorganizationsandnew“backbone”organizations?),whichorganizationsarebroughttothetableandwhethertheyarereflectiveoftheinherentdiversityincommunities(haveissuesofequityandracialjusticebeenseriouslyconsidered?),andwhetherthecollaborationchannelseffortsinapre-determineddirection,ultimatelystiflingtheworkofgroundlevelactivists(Wolffetal.,2017).Withindependentfundingtopromoteideasandpreferences,philanthropycontinuestobeabletoexerciseitsexpressiverole,butnonprofitsareoftenseenasinstrumentsforthem—astoolsorsitesinlargerschemesabouthowtoenactsocialchange.This“topdown”innovationdoesn’tgenerallyallowforlearning,whichcouldtakeplacefromseeingwhatnonprofitsonthegroundaredoing,lookingtoseewhatiseffectiveindifferentcommunitiesandlearningfromthat.Suchinnovationsoftendependheavilyonprofessionalandmanagerialexpertiseinsteadoffield-basedandlocalizedknowledge,andaredesignedtotranscendcultureandcontext(Ganz,Key,&Spicer,2018).Thisgivesthemtheveneerofneutrality,buttherationalizedframingoftenomitstheperspectivesandexperienceofthoseclosesttotheproblem(Tompkins-Stange,2016).Wheninnovationisseenonlywhenitcomesasahigh-profile,disruptiveforce,ratherthantheresourcefulnessandcreativityenabledbydeepexpertiseandextensivetraining,philanthropybecomesmoreremovedfromanauthenticanddemocraticunderstandingoftheproblemstheyaretryingtosolve(Tufekci,2018).ConclusionUltimately,socialservicenonprofitsarenotjustdeliverersofservicesbutpartofamuchbiggerwebofgovernanceintheirrolesasadvocates,collaborators,andgroundlevelinnovators.However,thereisarealtensioninthefieldregardingthedegreetowhichsocialservicenonprofitsarebestseenasgapfillersinresponsetomarketandgovernmentfailureorasvehiclesforstrengtheningcommunitiesandmakingpolicymoreresponsiveandequitable.Currently,socialservicenonprofitsarechallengedtomeetthenormativeexpectationsmanycitizenshaveforthenonprofitsectoraroundvoluntarism,communityconnections,andindependencefromgovernment.Theyhavestrongincentivestobecomemoreprofessionalized,larger,moredatadriven,andtomakedecisionsregardingserviceprovisionbasedonresourceavailabilityratherthancommunityneeds.Thosewhosubscribetoamarketlogicforsocialservicenonprofitsemphasizethatattentiontothebottomlineissimplygoodmanagementandwithoutthat,thesocialservicenonprofit

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sectorwouldlackcapacityandquality.Inthiscase,whatdistinguishesthesectorislessthenatureoftheprogrammaticofferingsandmorethepersonalityorcharacterthattheybringtotheirwork.Thechallenge,then,ishowtostayfocusedonmissionandrelationalworkwhenthemarketbecomesevermorepresentintheirwork.Optimistsassertthatrobustlydefiningtheoutcomesthatmatter,withfundingthatiswell-alignedtothoseefforts,couldhelpsocialservicenonprofitsmeetbothgoals.Certainly,thecapacitytousedatawellandmakeitmatterforanorganizationinanintegratedwaywillcontinuetobeaskillthatwilldividesuccessfulorganizationsfromthosewhostruggle(Janus,2018).Othersurgenonprofitstoleanintotheirexpressive,value-drivennature,andhighlightitasauniquestrength.Unlikefor-profitsoptimizedforinstrumentality,nonprofitscanleveragecommunityconnectionsandclient-centeredapproachasstrengths,potentiallymakingthemmorecompetitiveintacklingmorecomplex,barrier-richsocialissuesthantheirfor-profitpeers(Frumkin&Andre-Clark,2000).Othersaremorepessimisticandarguethatahealthycivilsocietyissimplyincompatiblewithnonprofitdependenceongovernmentfunding.Inthisviewthepursuitofgovernmentfundingcreatesperverseincentivesfornonprofitsthatleadthemtobecomeevermorefocusedonmeetingthedesiresoffundersthanthecommunitymemberstheyseeeveryday(Dolsak&Prakash,2015).Atthesametime,thefederalizednatureofgovernmentcontractskeepsparticipantsfromcollectivelyorganizing,asdoesthefactthatthesocialservicesarehighlysiloedinregardstoprogramarea(e.g.,mentalhealth,childwelfare,etc).Thiskindofpolicydesignnotonlymakesitdifficulttononprofitstohaveastrongadvocacyvoice,butactivelydiscouragesindividuals(nonprofitstaffandconsumersalike)fromgettinginvolvedorseeingthemselvesashavingalinkedfatewithothers(Michener,2018).Itisnotablethatnonprofitdependenceongovernmentfundinghascomeaboutpreciselythroughtherejectionofgovernmentasatooltosolveproblems(instead,seeinggovernmentasthesourceofthem)andtheembraceofmarketprinciplesasanalternative.Thishas,inturn,ledtosocialproblemsbeingseenastechnical,knowledge-basedproblemsratherthanpolitical,power-basedproblems(Ganzetal.,2018).Recognitionofthewaysinwhichinequalitiesarebakedintoourcurrentpoliticalsystemwouldmandateincreasedinvolvementofsocialservicenonprofitsincivicengagementandcitizenmobilization.Ourcurrentfocusoninnovation,data,andperformancemeasurement,bycontrast,privilegestheshort-term,individual-by-individualapproachtomeetingsocialneedsthatadvantagesthestatusquo.Overall,thischapterarguesthatincreasedenmeshmentwithgovernmentgivessocialservicenonprofitsmorepowerandresponsibilitywhileatthesametimelimitingtheirabilitytomeaningfullyresistmarketizationtrends.Thisislikelynotlimitedtothesocialservicesfield.Similarphenomenamaybehappeninginhealthcareoreducation,forexample.Givengrowingausterityandcontractcompetition,seriousquestionsariseregardingifthereisroomfordissentandalternativeconceptionsofthesector(Dodge,2010).Currentrelationshipswithgovernmenthavebeenconceptualizedasprincipal-agentinnature,implyingverticalaccountability.If,throughchangesincollaborativegovernanceandcollaborativepracticesgenerally,social

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servicenonprofitsaretogainmorevoiceandcontrolinthesocialservicesystemtheydeliver,wewillseeaneednewtheorizingaroundwhathorizontalaccountabilitywouldlooklikeinthesocialservices(Hill&Lynn,2005;VanSlyke,2007).Thefutureofthissectorisuncertainbutcouldbetellingforotherpartsofthenonprofitsectorthatarenotyetasfullyenmeshedwithgovernmentpartners.

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