Governing Without Government: Nonprofit Governance in Detroit and Flint

Abstract

Scholars across the social sciences have shown how economic, social, and political changes are weakening local governments and contributing to rising nonprofit activity in urban politics. But these trends could now add up to a new form of decision-making in some American cities. The convergence of public sector austerity and a burgeoning philanthropic and nonprofit sector have created space for what we call “nonprofit governance.” In some cities, nonprofit leaders can guide urban policy, sometimes with limited input from elected officials or citizens. First, we apply insights from studies in comparative politics to demonstrate how nonprofit leadership can expand, particularly in the context of a weak state. Next, we assess trends in public sector capacity, based on local government employment in Midwestern U.S. cities. We closely examine Detroit and Flint due to dramatic declines in local government capacity and recent public sector crises in both cities, focusing on the role of nonprofits in each. These leading-edge cases allow us to trace the development of nonprofit governance and explore different forms of nonprofit and local government relationships.

Market Privilege: The Place of Neoliberalism in American Political Development

“…The reorientation and commodification of the local state, as a result of the imposition of austerity on the city, involved major cuts to the municipal workforce and pensions, the shutting off of water to over 100,000 residents, reductions in a wide range of city services, the privatization of city services, and the emergence of a greater role for nongovernmental actors in city governance. 106 As would be the case for neoliberal reform more broadly, such measures gained support from a wide spectrum, which included those who deployed neoliberal, color-blind rhetoric to attract the support of racial conservatives who sought to withdraw support from programs they viewed as disproportionately serving minorities from "black" places. 107 As a result, the neoliberal coalition comprised a broad swath of actors among whom were leading Republican and Democratic politicians, right-wing think tanks, racial conservatives, and business interests that have always been at the heart of the "growth machine."…”

Philanthropy to the rescue? Detroit’s schools and urban policymaking under austerity

“…At the urban scale, the connection between austerity and the influence of philanthropists is well documented. For instance, in examining 15 years of local government employment data across the US, Reckhow et al (2020) highlight that in cities like Detroit, municipal governments are operating at under half of their original capacity. In this context, Reckhow et al state, the power dynamics of government partnerships with non-profits and philanthropists have shifted, with philanthropic organizations holding increasing power (see also Lipman, 2015;Thomson, 2019).…”

“…This reality starkly highlights the connections between philanthropic influence, racialized austerity, and a decline in democratic accountability (Reckhow et al, 2020). The financial stress on the local school district (itself partially produced through philanthropist-supported policies like lifting the charter cap) was used as a justification for the state takeover of the local school system, but such takeovers were targeted at majority-Black school districts and municipal governments despite financial crises throughout the state (Seamster, 2018).…”

“…At the urban scale, the connection between austerity and the influence of philanthropists is well documented. For instance, in examining 15 years of local government employment data across the US, Reckhow et al. (2020) highlight that in cities like Detroit, municipal governments are operating at under half of their original capacity.…”

Philanthropic Funding for Community and Economic Development: Exploring Potential for Influencing Policy and Governance

“…But what of influence on city policy or incorporation into governing regimes? Such outcomes are more likely as cities have grown more reliant upon nonprofits to accomplish key policy goals (Reckhow, Downey, and Sapotichne 2019;Young 1999) and foundations have increasingly provided funding directly to city governments to aid public service design. Funding does not automatically result in policy influence, nor does it necessarily lead to ongoing participation in a city's governing regime.…”