Guest Editorial: A Major Transfer of Government Responsibility to Voluntary Organizations?Proceed with CautionAuthor(s): Brian O'ConnellSource: Public Administration Review, Vol. 56, No. 3 (May - Jun., 1996), pp. 222-225Published by: Wiley on behalf of the American Society for Public AdministrationStable URL: http://www.jstor.org/stable/976444 .

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I

A Major Transfer of Government Responsibility to Voluntay Organizafions? ProcewkhCaufon

Brian O'Connell, Tufts University

Is the independent sector prepared to assume the burdens that pro-

posed reforms would impose on it? The author, a leading

spokesperson for third sector organizations, raises some significant

questions about the movement to transfer greater responsibilities to voluntary and not-fir-profit organizations.

There is growing interest in transferring to voluntary organizations more organizational and financial responsibility for human services such as job train- ing, low income housing, and care of distressed chil- dren. This raises the questions of how much of gov- ernment's current activities and responsibilities can and should be shifted to voluntary organizations, and, more basically, how should the public business be conducted and paid for? This reexamination of the relationships of voluntary organizations and gov- ernment and of how the public business is accom- plished best is welcome, but the current rush toward redefinitions and reorganization lacks requisite understanding of the roles, capacities, and finances of the independent sector and the roles and responsibil- ities of government. Reinventing government schemes, including the Gore Report, and devolution strategies, including the Contract with America, con- fuse our understanding of who will be responsible for better services. They hold out grand but vague assumptions about the responsibilities and capacities of voluntary organizations, but they fail to describe and provide for who will be responsible to achieve coordination and accountability of the even more dispersed system.

I agree that major changes are needed to make ser- vices far more accessible, effective, and affordable (for both clients and taxpayers), but unless there is a clear idea of what should take the place of the current incoherence, we will succeed only as dismantlers and not as responsible builders.

It is important to indicate that as founding presi- dent of Independent Sector, the overall umbrella group for voluntarism and philanthropy, I believe in private initiative for the public good, but it is only fair to reveal also that my years of immersion in non- profit labors have taught me as much about the lim- its of the sector as its strengths.

222 Public Administration Review . May/June 1996, Vol. 56, No. 3

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It is useful to begin with the current size and financial capacity of private philanthropy and voluntary organizations and then relate capacity to what society seems to rely on voluntary initiative to accomplish. The independent sector is much smaller than gov- ernment. According to the Nonprofit Almanac produced by Inde- pendent Sector, nonprofit groups spent approximately $327 billion a year in 1990, as contrasted with the combined expenditures of the three levels of government of about $2.3 trillion in 1990. Thus, nonprofit expenditures are approximately 14 percent of gov- ernment expenditures, and of that, approximately one-third con- sists of government contracts, grants, fees for service, and other tax-related income. For that part of the independent sector closely linked with government to provide health and human services, governmental support constitutes approximately 40 percent of the income of those nonprofit groups.

That 14 percent can be spent in ways that make a difference far beyond its relative size, but if a large part of the nonprofits' 14 per- cent is diverted to cover what government no longer feels it can do, these organizations lose their capacity to be different from govern- ment.

Several years ago, I attended a Ditchley Foundation conference in England on the state and prospects of philanthropy in the West- ern world. It became clear that for other countries, the total amounts represented by philanthropy and voluntary action are minuscule compared to what government spends. For example, in Britain, the total voluntary sector was about 2 percent the size of government, and for other countries, it was even less. Even at that, representatives of those countries argued that the sector provides vital elements of flexibility, innovation, creativity, and criticism and must be preserved. One of the issues discussed was whether phi- lanthropic dollars should be used to supplement government expenditures, particularly at a time of government cutbacks. At that stage, both Prime Minister Thatcher and President Reagan were arguing that private philanthropy should be used to make up for government retrenchment, and many U.S. mayors were urging foundations and corporations to help keep schools, libraries, and parks open and to maintain other public services. It became clear that although philanthropy has a responsibility to deal with emer- gency matters, particularly those involving human suffering, in the long run the small amount that nonprofits represent must be reserved for unique extra purposes or it may not be worth preserv- ing at all.

A caution must also be raised about where the money will come from to expand voluntary effort. It seems pretty certain that there will be less money to go around, and it has been my experience that when any level of government cuts budgets, the largest pro- portion is likely to come from partnership arrangements. There- fore, the transfer of responsibility is very likely to be disproportion- ate to the allocation of funds. It is much easier to reduce budget lines for external allocation than to shrink one's own staff and operations.

In terms of prospects for massive increases in charitable contri- butions, the reality is that current giving is barely keeping pace with inflation. Even the most optimistic views of increases fall far short of matching proposed government reductions in human ser- vice programs and the concomitant expectations of increased activ- ity by voluntary groups.

f. .although philanthropy has a responsibility to deal with emergency matters, particularly those involving human suffering, in the long run the small amount that nonprofits represent must be reservedfor unique extra purposes or it may not be worth preserving at all. During the Reagan administration, similar treatments of volun-

tary organizations were compounded into what the nonprofit part- ners described as a "triple whammy." One, support was reduced to voluntary groups that were providing services; two, government can cut out or cut back on many of the services it was providing directly with the expectation that the case loads could be trans- ferred to the remaining but financially curtailed voluntary organi- zations; and three, government, in preoccupation with its own income needs, undercut voluntary contributions to the nonprofit groups by decreasing tax incentives for charitable contributions. It was an excruciating period for those hammered by conditions imposed by an administration publicly committed to strengthen- ing voluntary institutions but which, through the same misunder- standings of the sector which we see recurring today, ended up doing so much the opposite.

Government may decide to keep moving in the direction of greater reliance on voluntary institutions to fulfill essential services and programs, but it cannot do so on the assumption that it can reduce support of its service partners and expect the services to be expanded or even maintained.

Another caution involves the arbitrary focus of most charitable contributions and voluntary organizations. These groups are not responsible for the general welfare. People target their contribu- tions to organizations that deal with Lutheran elderly, Catholic schools, oriental art, or contributors and organizations are focused on assistance to a particular neighborhood, population, or country.

Voluntary organizations represent alternatives, options, experi- mentation, supplementation, and leadership, and they can be a vehicle through which the government fulfills some of its responsi- bilities, but it is essential to our clear grasp of relative roles that on matters involving the general welfare, it is representative democrat- ic government to which we turn.

This does not mean that government must run every service and program, but that is a secondary consideration. We will not sort out the primary issue unless we start with an understanding of ultimate responsibility. Whatever delivery mechanisms we may want to establish for essential services, they are, nevertheless, a gov- ernmental responsibility. We can say we want churches to play a larger role in providing homes for incapacitated elderly or that we want voluntary organizations to carry a larger role in rehabilitation of paroled offenders, but we can no longer allow our delivery pref- erences to obscure that these are government responsibilities. Though the activity can be delegated, the responsibility cannot.

It is, of course, necessary to address financial responsibility. Here, too, though the issue is enormously complicated, the under- lying principle is simple. I am a great believer in contributions,

A Major Transfer of Government Responsibility to Voluntary Organizations? 223

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. .v.we need to be cautious that in the drivefor greater

pluralism and decentralization, we not compound the

already frightening breakdowns in the management of our existing scatterization.

fees for service, and other means by which the values of the mar- ketplace are applied to making services available and keeping them effective, responsive, and economical, but whatever funding pat- terns are appropriate and possible, making certain that essential services are in fact funded is ultimately government's responsibility.

The city or county may have an ambulance service of its own, contract with a profit or nonprofit organization to provide ambu- lance service, or allow competition among all three, but it has the ultimate responsibility to be certain that the service is available, accessible, and affordable to all. Similarly, a voluntary group may be the provider of the ambulance service with contributed funds, fees for service, tax dollars, or a mix of support. It may be the advocate for needed ambulance service or be the critic of inade- quate service, but unless under contract, it is not responsible to create or maintain the service.

In addition to concerns relating to the relative sizes, roles, and responsibilities of the two sectors, we need to be cautious that in the drive for greater pluralism and decentralization, we not com- pound the already frightening breakdowns in the management of our existing scatterization. We need to get much better than we are in the administration of the pluralistic hodgepodge before we depend more on it.

Some communities are already well ahead in the effective inte- gration of services, and many others are scrambling to deal with the block grants and other responsibilities barreling down on them. The Finance Project of the Institute for Educational Leader- ship recently reported on 50 such efforts under the heading "Com- pendium of Comprehensive Community-Based Initiatives: A Look at Cost, Benefits and Financing Strategies." A recent good exam- ple is the Local Investment Commission (LINC) in Kansas City, Missouri, which consists of significant citizen leaders, assisted by top government and voluntary agency administrators "...to reform the human services system." With full support of top state and local officials, the commission has broad sway in planning for changes in how human service systems will be redesigned and financed.

There is another important caution concerning future responsi- bilities of the independent sector. In a recent book, People Power, I said that the impacts of voluntarism can generally be categorized as service, advocacy, and empowerment, and although each is impor- tant, the relative worth to society is opposite to the dollars avail- able. An increased emphasis on the service role will mean that the service part of the sector will, in terms of money and employees, dwarf and obscure the remainder, and this will reinforce the impression that service is what the sector is and does. As impor- tant as those direct services are, they are, to my mind and experi- ence, decidedly secondary to the functions of advocacy and empowerment, where the dollars and staff are comparatively tiny. As we look to expansion of service, therefore, we need not only to

be realistic about how much service is possible but whether preoc- cupation with service will cause government officials to assume that it is essentially through direct financial support that govern- ment encourages the independent sector, when in fact the more significant support and encouragement are through keeping wide open the freedoms of speech, assembly, and association.

In an editorial, "America's Third Force," written when he was editor of the Journal of Current Social Issues, Paul H. Sherry said:

Their [the voluntary agencies in general] role is not pri- marily to serve as an alternate to government, but, instead, to help keep government honest and responsi- ble. The primary role of voluntary associations in American life is to continually shape and reshape the vision of a more just social order, to propose programs which might lead to the manifestation of that vision, to argue for them with other contenders in the public arena, and to press for adoption and implementation. For voluntary associations to do less than that is to abdi- cate their civic responsibility.

There is clearly a need for stoking up all appropriate machinery to cope with our national needs and the reality of finite funds. There also seems to be a nearly unanimous view that greater volun- tary participation is badly needed. People with markedly different political orientations realize that government alone cannot solve all our problems and that maximum involvement of people creates good government and provides different and sometimes better ways of dealing with needs and aspirations. The resulting demand for more services is so great that the partnership of governmental and private agencies receiving substantial government support will surely increase.

In our eagerness to expand the contribution of the nongovern- mental sector, it is essential not to undermine the preeminent long-term values of independent agencies. My experience tells me that long-term government support of an agency or complex of agencies creates a quasi-governmental entity with decreasing value as an independent force. By no means does this suggest that vol- untary organizations that receive substantial government funding cannot still be effective representatives of their clients and causes, but if government is a very substantial source of an organization's support, its ability to be relied upon as an independent force has to be in question.

It is also essential to be aware that creating quasi-governmental organizations that are viewed as outside the immediate spectrum of formal government tends to obscure both responsibility of govern- ment and a truly independent sector. As we move into such an arrangement, it is vital to recognize and appreciate that in place of the present two kinds of organizations, we will really have three- government, quasi-government, and independent-and that it will be the independent agency that will continue to be the principle source of independent action.

The impression of government officials that this sector is pri- marily a service provider and the resulting, almost tragic exaggera- tion of the service capacity of the sector, are not new. The 1920s were an earlier high point for expectations of voluntary activity. World War I provided a rallying of civic and national pride, and the 1 920s were "can do" years. With the advent of the Depression,

224 Public Administration Review * May/June 1996, Vol. 56, No. 3

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President Hoover, who had achieved prominence and leadership through his national and international philanthropic endeavors such as the Commission for Relief of Belgium, called upon Ameri- can generosity and voluntary effort to rise to deal with escalating needs. When the voluntary sector could not, there was a sense that it let the country down, and when government failed to move into the void, the public wondered if anybody cared.

Classic Marxist theory holds that allowing other systems to exist, including free enterprise and voluntary organizations, obscures the absolute role and responsibility of government. This philosophy overlooks the greater advantages of pluralistic problem solving, maximum citizen involvement, and liberating outlets for creativity and contribution, but in the continuing confusion between the relative roles of government and voluntarism, the old Marxist argument cannot be dismissed altogether. Those of us who believe in the superiority of a three-sector society bear a par- ticular burden to be sure that support for free enterprise and vol- untarism does not in fact obscure the role and responsibility of government. In 1932, Reinhold Niebuhr, hardly a Marxist, sum- marized the immediate situation: "the effort to try to make volun- tary charity solve the problem of major social crises...results only in monumental hypocrisies...."

During the 1930s and through World War II and postwar 1940s and 1950s, the focus in the United States was necessarily on the responsibility and capacity of government, but gradually, peo- ple with very different starting points began to realize the practical limitations of big government and the necessity of an active citi- zenry to help make government effective and to provide options and alternatives. This, in time, led to the explosion in number and impact of voluntary organizations from the 1960s into the 1990s

and to a denigration of government for its limitations and short- comings.

The essential lesson that began with the 1920s and Herbert Hoover and which is still evolving is that Americans need both strong government and a strong voluntary sector, and that we will not have either if national leaders do not understand the relative roles of the two. Voluntary organizations provide wonderful ele- ments of spirit, participation, service, influence, and the freedom to do one's own thing, but if government overloads them with the basic responsibility for public services, undercuts their income, and limits their roles for advocacy and criticism, they will fail society, and America will be at another point of national breakdown when people demand that government do it all. That can be avoided if Americans understand the parallel lessons of the 1920s and 1990s about what voluntary organizations can do and cannot do.

There are many roles that voluntary organizations play, includ- ing providing services and acting as vehicles through which the government fulfills some of its public responsibilities, but the largest contribution is the independence they provide for innova- tion, advocacy, criticism, and where necessary, reform. Efforts by all Americans, including the President and Congress, should be devoted to building upon that uniqueness without exaggerating what the sector can do or what government should not do.

Brian O'Connell is a professor of public service at the Lincoln Filene Center for Citizenship and Public Affairs at Tufts University and founding president of Independent Sector. He also headed the National Council on Philanthropy and the National Mental Health Association.

References

Gore, Albert, 1993. Creating a Government that Works Better &! Costs Less. Washington, DC: U.S. Government Printing Office.

Independent Sector, 1992/1993. NonprofitAlmanac. San Francisco: Jossey-Bass.

Niebuhr, Reinhold, 1932. Moral Man and Immoral Society: A Study in Ethics and Politics. New York: Scribner.

O'Connell, Brian, 1994. People Power: Service, Advocacy, Empower- ment. New York: Foundation Center.

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