SLOWLY, steadily, with never a specific national policy
directive, nonprofit community organizations have become the major
providers of social services in all parts of the United States.
Although no national statistics exist, experts say that as much
as 60 percent of the social service budgets of many government
entities - state, county, and local - are now managed by nonprofit
community organizations, many of whom are under contract with
various federal agencies.
For instance, according to a University of Wisconsin report
about Dane county, Wis., more than two-thirds of the $86 million
budget for social services in 1991 was managed by nonprofit
organizations under contract with the county.
Social historians say this extraordinary change over the last 40
years or so is evidence of a historical shift at a basic level of
government, in which entities of specific services become agents
"The kind of system we have now," says Donald Kettl, associate
director of the LaFollette Institute of Public Affairs at the
University of Wisconsin, Madison, "is certainly not the product of
any conscious policy choice. We have this enormous patchwork quilt
of organizations out there responsible for the front lines of
social service delivery, but no coordination, and nobody auditing
the money to see where it comes from except the boards of the
In Newark, N.J., the budget of the New Community Corporation, a
nonprofit community housing and social service organization
recently recognized as a model by President Clinton, was $85
million in 1992. Nearly 90 percent of the funds were provided by
federal, state, and local government programs.
Another study revealed that between 1981 and 1987, employment in
nonprofit organizations in New York State grew twice as fast as
employment in the for-profit world, and three times faster than
Former New York City budget director David Grossman estimates
that the amount of the 1990 state budget "allocated to and through
nonprofit organizations was between $4 billion and $5 billion,"
about a tenth of the $48 billion state budget.
Nonprofit community-service organizations were adjuncts of
governments as early as the late 1800s. Beginning in the 1960s,
however, federal programs began to encourage community-based
solutions to social problems because the federal government
distrusted the ability of local governments. In that era of civil
rights activism, the Model Cities program, the Comprehensive
Employment and Training Act (CETA), Community Development Block
Grant Programs, and others essentially sought to bypass local
and empower community groups. …