The Power of Nonprofits: Mechanisms for Nonprofit Policy Influence

Abstract

The dramatic increase in public funding for nonprofit organizations has raised concerns about the potential disadvantages of a nonprofit sector that is too reliant on government funding. Using nonprofits to deliver public programs also presents risks for the public sector, but the question of nonprofit policy influence is largely absent from discussions of public–nonprofit service collaborations. The motivation for this article stems from the contradiction between the perceived weakness of publicly funded nonprofits and their potential for policy influence. This research asks, how do nonprofits exert policy influence? Using a grounded theory approach, the research draws on the attitudes and experiences of professionals and elected officials involved in policy making and policy implementation in the area of low‐income housing. The findings indicate a variety of mechanisms through which the government–nonprofit relationship can strengthen the power of nonprofit organizations, sometimes while weakening their government counterparts.

Intersecting Sectors? The Connection Between Nonprofit Charities and Government Spending

“…This is the essence of rent-seeking behavior (Anderson, 2012). In this regard, nonprofit charities behave as an interest group with preferences for beneficial government tax and expenditure treatment -in the aggregate or in specific service delivery areas (Buffardi et al, 2015;Fyall, 2016). Such behavior is similar to that articulated by Mosley (2012), in which social service providers advocate with government funders to ensure direct public financing for charities continues over time.…”

“…These charities have incentives to incorporate in higher tax locations and lobby governments for both continued tax benefits and direct financing for services, resulting in increased government spending (Lecy & VanSlyke, 2013;Luksetich, 2008). In doing so, nonprofit charities behave as classic interest groups or rent seekers to advocate for government policies (Buffardi, Pekkanen, & Smith, 2015;Fyall, 2016). Further, because nonprofit charities and governments collaboratively provide public services, government agents might realize increased budgetary discretion through these relationships (Jang & Feiock, 2007).…”

How Structural Variations in Collaborative Governance Networks Influence Advocacy Involvement and Outcomes

“…We argue that knowing more about network‐led policy advocacy—and what factors are associated with it—is important to monitor for several reasons. First, advocacy is an important way for providers to be able to share knowledge gained from their ground‐level work and express concerns about policy proposals (Berry and Arons ; Fyall ; Mosley ; Sandfort ). Part of the mission of collaborative governance processes is to include the perspective of outside stakeholders in policy making in order to make policy more responsive—advocacy is a natural outgrowth and extension of that work.…”

“…Although there is not a large body of literature looking at advocacy in the context of collaborative governance, there has been substantial work done looking at the advocacy involvement of nonprofit human service providers generally (Donaldson ; Fyall ; Mosley ; Nicholson‐Crotty ; Sandfort ; Schmid, Bar, and Nirel ). Although the context is somewhat different, collaborative governance networks are a type of organization, and many of the same dynamics likely hold true.…”

Exploring the Role of Nonprofits in Public Service Provision: Moving from Coproduction to Cogovernance

“…This limitation is amplified when governments at all levels are experiencing fiscal stress and are increasingly relying on nonprofit organizations for financing public services (Gazley, Cheng, and LaFontant ; Nelson and Gazley ). Therefore, a complete understanding of the role of nonprofits in multiple phases of public service provision is desperately needed (Brandsen and Pestoff ; Fyall ; Mosley ).…”