There is growing interest in transferring to voluntary organizations more organizational and financial responsibility for human services such as job training, low income housing, and care of distressed children. This raises the questions of how much of government'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 government and of how the public business is accomplished 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 responsibilities of government. Reinventing government schemes, including the Gore Report, and devolution strategies, including the Contract with America, confuse 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 services 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 president 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 nonprofit labors have taught me as much about the limits of the sector as its strengths. 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 government. According to the Nonprofit Almanac produced by Independent 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 government expenditures, and of that, approximately one-third consists 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 percent is diverted to cover what government no longer feels it can do, these organizations lose their capacity to be different from government. Several years ago, I attended a Ditchley Foundation conference in England on the state and prospects of philanthropy in the Western 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 philanthropic 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. …
Read full abstract