Over the course of two months in America I was privileged enough to visit and chat with about 27 nonprofits across three states, all doing great work in the human services field, all with strengths and challenges, and all with a view on what it means to be a nonprofit in America today. I want to do a couple of blogs rounding up some of what I learnt – this first one is about some of the issues I encountered; the next will be about some theoretical questions I’ve been exploring.
There were, as expected, lots of shared concerns among these organisations, even on opposite sides of the U.S. There were lots of similarities with groups in the UK too. I’ve pulled out a few issues that I think will be of particular interest to my readership here:
The funding picture is different – but it’s also split
Everyone I spoke to either told me they were up to 70, 80 or even 90% funded from government sources – whether federal, state, city, county or other, there are a bunch of routes – or proudly stated they didn’t take government money at all. This won’t be a surprise to people who know the U.S. welfare sector, or the literature around it (totally was to me though). Salamon was writing back in the 1980s about the concept of ‘third-party government’, noting the extent to which nonprofits were relied upon to deliver government-funded services, although his 1981 figures show a 40% income share from government sources across the nonprofit sector – still significantly higher than income from fees or private giving. In return they were providing, at the time, about the same percentage of human services. This caused policy problems when the Reagan administration sought to reduce its funding of, or ‘get out of the way of’ the sector.
The second type obviously brings up independence narratives; organisations say they feel more free to deliver services in the way they want to deliver them without government funding or interference, or that they can be more radical, more outspoken or better champion causes without worrying about biting the hand that feeds. They also avoid some of the problems faced by those with government money, including some of the bureaucracy and practice-shaping forces, which is the next conclusion I came to…
This funding picture shapes organisations
I was really surprised by the level of bureaucracy involved in the nonprofit world, whether relating directly to nonprofit regulation – things like lobbying registers and annual returns – or to service provision and reporting. Large human services organisations with multiple contracts had significant compliance requirements, which needed dedicated teams to meet, while individual services had some crazy health-and-safety style rules attached to them around nutrition, education and more.
Where funding came as service contracts organisations talked about trying to ‘play around the edges’ of these, getting away with doing this a little bit differently in certain areas, but also pushing back on policy that didn’t work. But this was also a reactive process; with one strong exception even organisations with multi-million dollar turnovers working in welfare fields didn’t have dedicated policy teams in a way I would expect to see in charities of their size back home. Some of this is because of confusion around the rules for campaigning for organisations registered as 501(c)3s, but some of it is about resources; government funding is highly likely to only fund the service delivered, so that other 20% of income, raised in a crowded field of gala dinners, foundations, corporations and private individuals, has to cover overheads, over-capacity services, and anything else that needs funding. Policy work, despite the difference it might make in the longer term to beneficiaries, isn’t always at the top of that list. It doesn’t mean they don’t campaign though…
Because of that, campaigning looks a bit different
Campaigning work is so strong in America, and there are brilliant organisations fighting for progressive causes day in, day out. But, in some regards at least, it doesn’t look quite the same as in the UK. The split between 501(c)3s and (c)4s is part of it (although in reality both types of organisations can – and do – campaign and lobby). I feel like it seems on the one hand much more professionalised in the States; (c)4s are involved in the kind of lobbying charities back home wouldn’t be able to engage with, like endorsing candidates, and the ones I spoke to were much more engaged in mid to long term political strategy, combatting elements of the electoral system, rather than just working on consultations and the like to influence the incumbent administration (they do this too of course). On the other hand, the (c)3s I spoke to were much less likely to engage in formal policy work than their charity equivalents back home; the people I spoke to talked about having good and close ties with local government officials of different kinds, and trying to influence service delivery and strategy in different ways, but even in large organisations this often came down to the Executive Director, and relied on their relationships. We know this to be a common feature in charities trying to influence local government in England, or working as part of networked governance systems, but it was more of a common approach and present at larger scales in the U.S. than I had experienced back home.
There was a familiar tension between ‘grassroots’ and ‘professional’ organisations in terms of trying to influence, which I’ll come back to in the Theory blog. I’ll note here that the language of ‘grassroots’ was used by large-scale and large-in-terms-of-resources organisations in a way that I think grassroots organisations themselves would not connect with. I didn’t explore this to any great extent, but I think it’s interesting in terms of discussions around the constructed ‘identity’ or ‘values’ of nonprofits and charities.
The issues are serious, so cross-sector issues don’t always get the cut-through
I interviewed a handful of state and federal-level nonprofit infrastructure organisations, with different profiles and priorities, and different relations with different levels of government (sadly I’ve not had time to write them all up – future projects maybe). Getting cut-through for sector-wide issues was a challenge, both in terms of trying to bring diverse nonprofits together on issues, and in trying to influence government policy. At a federal level, while there are points of contact within the government there is not the same structure (and history) of units and Ministers and strategies as in the UK. There were pros and cons to this, different interviewees told me, but my own reflection is that it means the ‘nonprofit sector’ as an entity does not have the same policy profile or identity, despite being a key deliverer of services. There is work being done to try and shape this policy space, and it doesn’t mean at all that federal-level infrastructure does not have an influence (or indeed that the UK groups are always listened to…), but the challenges are different.
The diversity of the sector, in terms of size and cause, as well as the sheer geography of the nation and its states, presents problems that will be familiar to infrastructure organisations back home. There are also familiar questions of representation and efficacy. Infrastructure organisations in different states might not have high profiles or high memberships because service organisations identify more with their field of cause than their field of tax entity, but of course infrastructure bodies still campaign and lobby on issues that affect them. Sub-sector specific issues, things like homelessness and housing insecurity across all life stages, or immigrant welfare and rights, are at critical points in lots of areas, so it can be an understandable challenge to engage such organisations on things like tax reform or business levies. But I also got into an interesting conversation at the ARNOVA research conference about the impact of these cross-sector organisations on the field as a whole; I would love to explore in more detail whether or not states with nonprofit associations (as they are called) have ‘stronger’ nonprofit sectors, or preferential environments as a result – I suspect there are lots of other factors involved, and I have some questions about the varied conditions within those states, but nevertheless, hypotheses for days…
That’s it for now. These are just my reflections so as ever feel free to leave comments, corrections, contradictions below. I’ll be back with some theory reflections soon.