Challenges of the government-nonprofit relationship after the recession

Abstract

The recent recession has had profound effects on state governments and their partners in human services. This paper begins with a conundrum: while nonprofit human service producers have turned to state government contracts for stability and legitimacy, it would seem that state fiscal imbalance has increased contractor vulnerability. Using a national survey of nonprofit human service organizations conducted by the Urban Institute, we find a sector is severely stressed. This paper then considers the meta-contract upon which contracting regime is built: a set of both formal and informal rules, rights, and responsibilities that guide how all parties in a contracting regime are to act. We draw out how the meta-contract has failed in this case and provide a discussion of how it could work in the future.