By Maddy Bynes-DeVaney
You might be asking yourself how public policy really affects your nonprofit organization. In addition to the rules we all live by as a society, the government is responsible for redistributing wealth to ensure a basic standard of living, care, environment, and other needs that we as a society have. In fact, according to the Johnson Center for Philanthropy, the federal government annually directs $494 billion to the nonprofit sector while state and local governments contribute $187 billion. Contrast that with the estimated $103 billion in annual contributions from private foundations, and you can see that government plays a huge role in how charitable causes are funded and developed.
This is Not the Government Funding of the 1990 and 2000s
In consulting with numerous clients, I've heard that government's outlook on the nonprofit sector has significantly changed since the COVID-19 pandemic. In the early 1990s, Brinton Milward and Keith Provan of the University of Arizona (my alma mater) wrote about a concept called "the hollow state." The hollow state refers to a situation where the government retains formal authority but has substantially outsourced or delegated its service provision responsibilities to third parties, such as private contractors, non-governmental organizations, or other entities. In this context, the state becomes "hollow" because while it still exists as a political or regulatory entity, it no longer directly delivers many of the services it is traditionally expected to provide.
For many of us, we believe and understand that it is the government's responsibility to provide services to people directly. Think SNAP (AKA food stamps). The government assesses you for financial eligibility and then based on that eligibility provides you and your family with money on an EBT card to purchase food each month. In the latter part of the 20th century, there was a significant change in the way government provided services, moving from direct service provisions to contracted service provision through private corporations and nonprofit organizations. The idea behind the "hollow state" was that nonprofits and private businesses experience greater competition, therefore they would be more able to provide faster, more efficient, more comprehensive, and all around better services to the people than the government itself. In a hollow state structure, the government acts as a regulatory authority that passes funding along to nonprofits or private corporations through a public, competitive granting process.
From construction to the environment to military to health care, the hollow state is in large part to thank for the nonprofit sector's role in offering and implementing government-funded services.
During the COVID-19 pandemic, it was evident that our government needed to take a bigger role in addressing the large economic and health crises we faced. For many governments, that meant sending out additional funding to nonprofits and businesses, allowing for more programmatic flexibility than during pre-pandemic times.
The Pandemic's Effect on Nonprofit Programming
The pandemic sparked significant innovation among government funded programs. Take the Older Americans Act programs, for instance. I've worked with Older Americans Act programs for the past decade and have seen the transformation in these programs, especially in the area of nutrition delivery. During the pandemic, providing older adults with a hot lunch in a senior center was untenable. It exposed too many older people to the virus, which could be extremely dangerous, even deadly, for them. So, the federal government allowed Area Agencies on Aging the flexibility to provide nutrition services in different ways. Providers all across the country rose to the challenge providing drive-thru and grab 'n' go meals. These innovations meant people could safely and quickly get meals and at less of a cost. One negative effect of this transformation was that there were fewer socialization opportunities for older adults.
Nonprofits in all areas of social impact across the nation felt similar effects to what I describe above. We all had to make quick and necessary changes to meet the needs of our respective communities and the people who relied on those 'government services.' This meant that governments had to allow flexibility and there had to be mutual trust between the governing agency and the nonprofit to ensure that services were happening in an appropriate manner for the community.
Moving to a Post Pandemic World
Moving into a post-pandemic world, the landscape of regulation and funding is yet again rapidly changing, and unlike during the pandemic, we have the luxury of time to adjust and make sure we get things right. There's on-going negotiation with government partners over how much flexibility and oversight is appropriate, how services can and should be administered, and most importantly, how much we should fund vital programs that support everyday people should be funded.
Many of my clients describe this process as slightly uncomfortable, and it should be. Change is difficult, and to effectively manage change, there needs to be mutual trust between the government and nonprofit sectors that we are "all in this together." Effective advocacy and public policy work on the part of nonprofits should engage government officials, and seek collaboration to develop processes and systems that have the highest impact for the people you are mutually serving. This takes effective communication, understanding, advocacy, and yes, sometimes trust building.
Where do we start?
So, how do you navigate this change? Well, it isn't a one-size fits all approach. Each government interaction is different and requires an in-depth knowledge and understanding of community needs, laws and regulations, paired with political feasibility. At Bynes Consulting Group, we can help! We work with nonprofit organizations to help them define their policy priorities, research effective approaches and interventions, build programs that fit regulatory requirements, connect them with government agencies, key elected officials, staff, and personnel, and find funding for effective programs.
Works Cited
The Johnson Center for Philanthropy: https://johnsoncenter.org/blog/philanthropy-and-government-play-increasingly-overlapping-roles-in-the-public-sphere/#:~:text=As%20of%202015%20(the%20most,Pratt%20%26%20Aanestad%2C%202020).
Philanthropy Indianapolis University: https://philanthropy.indianapolis.iu.edu/news-events/news/_news/2024/giving-usa-us-charitable-giving-totaled-557.16-billion-in-2023.html#:~:text=What%20to%20Know%20*%20Key%20findings%20from,reaching%20a%20new%20high%20by%20that%20measure.
Governing the Hollow State: https://www.jstor.org/stable/3525648
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