Cooperation, Coordination, and Control: The Emergence and Decline of Centralized Finance in American Charity

Abstract

The notion that government funding undermines the independence of nonprofit organizations is a prevalent theme in scholarship on state–nonprofit relations, social welfare policy, and the condition of American civil society. This article scrutinizes historical assumptions about community organizations that inform debates over the influence of government funding in the nonprofit sector. Drawing on long-standing organizational theory and a historical analysis of the Community Chest movement, this article highlights the tension between collaboration and independence inherent in the nonprofit organizational form as well as the implications of this tension in light of historical changes in the resource environment of voluntary human service agencies. This conceptual and temporal focus leads not only to an analytical reorientation but also to a historical revision: The influx of government funding in the American nonprofit sector in the 1960s promoted nonprofit independence by undermining the authority of local community institutions. In addition to complicating popular beliefs about charity in American civic culture, this article facilitates a more sophisticated understanding of community dynamics.