PUBLIC, NONPROFIT

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PUBLIC, NONPROFIT VOLUNTARY ORGS
U.S. economy comprised of three generic sectors,
each with distinctive sources types of revenues
and estimated percent of the U.S. labor force
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Nonprofit Legal Form

• NPOs are a distinct legal form, special tax
  status
• Internal Revenue Code 501(c)3 tax-deductible
  contribs
• IRS 501(c)4 permits political activity (e.g.,
  Sierra Club)
• Mutual-benefit assns excluded (unions, coops,
  veterans)

The primary constraint on NPOs, distinguishing
from for-profit companies, is the nondistribution
of revenue to owner/shareholders
NPOs are a highly heterogeneous population,
spanning many industries beyond just
stereotypical charities Member-Serving
Public-Serving as two broad classes
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Origins of the NP0 Sector
Alternative theories about the origin spread of
the NPO form
ECONOMICS EXPLANATION Both government agencies
NPOs arise from market failure when private
sector unable to make profits (e.g., hospitals
for the poor)

• SOCIOLOGICAL EXPLANATIONS (DiMaggio Anheier)
• Institutional theories require detailed
  historical cross-national studies of variations
  in specific industries
• Tocqueville USs unique individualist culture,
  religious freedom, tolerance of diversity,
  market-driven economy
• Orgl ecology theories explain typical S-shape
  growth pattern as interplay of legitimation
  competition dynamics as new NPO forms are created
  by entrepeneurs and accepted by the public

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Promoters of NPOs
1. Status and Class groups with self-interested
agendas Upper classes seek social
domination of civil society Racial, ethnic,
religious groups seek cultural preservation
EX Cultural arts, welfare-social service
Giving is greatest where wealth is greatest,
rather than where need is greatest. What is
more, much of private giving functions with a
significant amentiy value to the givers (e.g.,
education, culture). Lester M. Salamon. 2001.
The Current Crisis. P. 423 in The Nature of the
Nonprofit Sector, edited by J. Steven Ott.
Boulder, CO Westview.)
2. Professionals with ideologies of work autonomy
inside orgs Are NPOs more conducive to profl
empowerment? Teachers in schools
scientists in labs Doctors in
hospitals managed care HMOs
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NPO Promoters
3. The State Expanded powers to tax
regulate shapes NPO growth Charitable
deductions shift NPO sector boundaries
Grants, subsidies for service delivery to
deprived groups
Legacy of the Great Societys War on Poverty
efforts Conservative suspicions of NPOs as
liberal social engineering

• 4. U.S. civic cultures norms generally support
  NPO activities
• Taken-for-granted expectations about social
  institutions
• Government should stay out of our private
  lives
• Charitable giving vs. self-help reliance
• Health care shouldnt be wholly market-driven
• Schools should be publicly funded (anti-vouchers)

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Measuring NPO Performance
The research literature is vast and
inconclusive about NPO performance criteria.
Paul DiMaggio and Helmut K. Anheier. 1990. The
Sociology of Nonprofit Organizations and
Sectors. Annual Review of Sociology 16137-159.
EX Unclear whether teacher salaries are
higher/lower in private vs public schools
colleges NPO sector probably too heterogeneous to
draw solid conclusions beyond specific narrow
industries (hospitals, schools, art museums)
EX Coleman study of high schools showed that
private (Catholic) schools raise the test scores
of lower SES students, narrowing the wider class
gap in public schools QUEX What implications
if used to make policy, increasing access to
private schools through vouchers?
PRIVATE
S C O R E S
PUBLIC
LO SES HI
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Four NPO Crises
Lester Salamon discussed four crises facing NPOs
that threaten their freedoms to pursue their
distinctive missions. Great risks to the NPO
heritage of innovation, trustworthiness, altruism
on behalf of the sociopolitically dispossessed.

• FISCAL CRISIS
• Declining government revenues beginning with
  Reagan-Gingrich federal grants cutbacks, tax
  system reforms
• Private charitable donations unlikely to fill
  the gap
• ECONOMIC CRISIS
• Growing reliance on fee-for-services (e.g,
  health care)
• NPOs may avoid their traditional unprofitable
  activities

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NPO Crises, cont.

• EFFECTIVENESS CRISIS
• Perceptions that over-professionalized NPOs may
  actually worsen social ills (e.g., poverty,
  welfare dependence)
• Unaccountability uncertain technology
  ineptness
• LEGITIMACY CRISIS
• State, local governments deprivatizing many
  services
• Disillusioned public support of NP sector,
  fueled by high-profile financial scandals
  relentless conservative attacks on liberal
  advocacy NPOs (e.g, Planned Parenthood,
  environmental groups)

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Associations U.S. Democracy
Alexis de Tocquevilles classic study Democracy
in America
Americans of all ages, all stations in life, and
all types of disposition are forever forming
associations. There are not only commercial and
industrial associations in which all take part,
but others of a thousand different
types--religious, moral, serious, futile, very
general and very limited, immensely large and
very minute. . . . Nothing, in my view, deserves
more attention than the intellectual and moral
associations in America. de Tocqueville,
Democracy in America (1835)
19th century liberalisms conundrum was how to
minimize democratic governments intrusion into
domestic affairs of the populace (during
transition from Gemeinschaft ? Gesellschaft)
Which social structures could best preserve
individual freedoms and group liberties by
limiting the concentration of state market
powers?
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Tyranny of the Majority
PROBLEM In mass democracy, public opinion always
threatens a tyranny of the majority
(totalitarian democracy) Democratic rule
suppresses minority group interests Pressures on
officials for state action to enforce
equality Mediocrity of democratic mass culture
produces conformity stifling uniformity of
social life a leveling-down of standards
tastes
SOLUTION Create many voluntary or civic
associations able to resist domination of
citizenry by totalitarian democratic
state Especially in pluralistic, heterogeneous
societies, VAs are indispensable for mediating
state-civil society relations By exercising
grassroots democracy, VAs become training schools
for citizenship values, norms, and practices for
larger society
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Dual Functions of VAs

• FOSTERING PERSONAL AUTONOMY
• Express interests, needs, problems of diverse
  population
• Instill local communitys moral standards
• Reduce frustration, powerlessness, anomie
  (normlessness) Durkheims corporative orgs
  based on occs professions
• Develop sense of participation, involvement,
  satisfy personal needs without necessity of state
  intervention

• PROMOTING CIVIC ENGAGEMENT
• Educative role in civic affairs and democratic
  practices
• Create power centers autonomous from state,
  avoiding oppression
• Channels for two-way communication between
  citizens political elites

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Voluntary Associations

• Voluntary association (VA) evolved into a special
  type of NPO
• Tax-exempt legal status, nondistribution of
  profits
• Reliance on voluntary labor to achieve
  collective goals
• May or may not have a paid staff

VA DEMOGRAPHY 90 of orgs are missed by IRS
records Grassroots assn population 7.5
million Paid-staff vol group population 2.0
million Average volunteer gives 2.6 hours/week
Total volunteering of 27.6 billion hours 16.2
million full-time workers 13 of U.S. labor
force Churches received 39 of volunteer efforts
David Horton Smith (2000) distinguished two basic
types of voluntary groups (1) Paid-staff
voluntary groups (2) Grassroots Assns local,
voluntary, autonomous, voluntary altruism based
David Horton Smith. 2000. Grassroots
Associations. Thousand Oaks, CA Sage
Publications.
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Still a Nation of Joiners?
1998 GSS asked adults about 16 types of
membership groups
31 belonged to no assns 26 belonged to only one
group 12 belonged to 4 or more Mean 1.61,
std. Dev. 1.60
U.S. rate is highest among 15 industrial nations
but if churches unions removed, then Canada,
Great Britain, N. Ireland have equally high
levels Curtis, Grabb Baer. 1992 Voluntary
Association Membership in Fifteen Countries A
Comparative Analysis. American Sociological
Review 57139-152.
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Bowling Alone?
Robert Putnam (Bowling Alone 1995, 2000)
popularized a decline of community thesis from
1960-1990, individual bowling was up 10, but
league bowling was down 40 Much evidence of
eroding social capital relations (networks,
trust, norms) that previously enabled citizen
pursuit of shared objectives. Indicates
widespread social, psychological disengagement
from politics and government. Two primary causes
(1) Generational replacement (2) Boob tube

• Robert Wuthnows (1998) community transformed
  thesis Many new forms of civic engagement
  recently emerged to supplant older forms
• Therapeutic self-help, special-purpose,
  professionalized nonprofit organizations
• Tight, life-long social bonds to civic
  organizations replaced by more flexible
  transient welfare, service advocacy groups
  trying to cope with entrenched social problems

Robert Putnam. 2000. Bowling Alone The Collapse
and Revival of American Community. NY Simon
Shuster. Robert Wuthnow. 1998. Loose Connections
Joining Together in Americas Fragmented
Communities. Cambridge, MA Harvard University
Press.