Don’t Be Afraid to Cut the Strings: Reconsidering Government Funding

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For many people working in and with nonprofits, the work is about channeling people’s best intentions into actions; about ensuring a modicum of justice and equity; about giving voice to opinions and facts that aren’t well enough understood or observed in social policy; about ensuring that people with too little power get more power and that people with too much power are afforded a bit less; about developing the critical thinking, creativity, and a sense of the civic effectiveness of ordinary people that make up this democracy. This article is addressed to you.

Today, the nonprofit sector is at a critical point in its relationship to government and in its understanding of its own roles (intended or unintended) in mediating the conflicting interests of people and government. This role is a risky one—translation always carries with it some potential for misrepresentation. But when you haven’t actually talked in depth to those whom you represent—well, that potential becomes a virtual surety.

One of the most painful weekends of my life was spent in a Baltimore hotel, sitting on a federal funding panel on homelessness. At the time, disparaging the mothers of homeless families was fashionable among some policy-makers—a position based on notions of homeless mothers being incompetent as parents and unable to form stable social networks. As I reviewed program designs inspired by a particularly flawed piece of research, the faces of the women I knew personally haunted me. I felt like I was engaged in active betrayal, not only of them, but of my own integrity as well. I protested, pointing out that among researchers and shelter workers the study was being hotly disputed. I realized that my fellow panelists were no longer listening—they had already embraced the assumptions framing the research findings.

Ironically, the Boston Foundation’s Fund for the Homeless, where I worked at the time, had just completed a study to test an assumption that program design in sheltering programs was deeply affected by the level of dialogue (and direct lines of input and accountability) between shelter directors and homeless people. Within this context, we looked at type and level of contact between directors and homeless people, finding that for most directors, contact consisted primarily of “chance encounters” related to the necessities of program delivery.1 In fact, only a few programs consistently involved homeless or formerly homeless people in dialogue or decision-making on how nonprofits should respond to homelessness.

When in the course of this study we engaged groups of homeless people in conversation, they voiced overwhelming agreement that access to employment, childcare and health coverage were decisive in avoiding homelessness. People longed not only for housing but for “a community where they wouldn’t fall out of sight—where they wouldn’t be lost when a personal or family frailty emerged.”

A third finding proved our assumption. The programs involving homeless families in dialogue and decision-making at the organizational level were more comprehensive than their colleagues’. They were “more broadly focused on community development and… the elimination of root causes [of homelessness].” In other words, organizations that engaged in planning and continuous dialogue with those they served designed their programs markedly differently from those that did not.

This article argues that no nonprofit should take funding from the government unless and until it has in place systems being directed by and in deep dialogue with constituents. If we do not observe this rule we are relinquishing that characteristic which is the essence of the voluntary sector. This essence is in the discipline of engaging constituents and community members in continuing dialogue and action. This discipline is core to the functioning of a healthy nonprofit and a healthy democracy.

Whatever we choose to call ourselves—and language is important—the independent sector is responsible for nurturing the pluralism of our democracy. It ensures that there is a way for people to organize themselves to create structures and systems that will enrich their lives or protect them from, among other things, the unchecked actions of government or business. Nonprofits do not exist merely to mediate the failure of markets or the unresponsiveness of government—this view reduces us to a mere corrective mechanism. The sector exists to ensure that people can take an active part in determining their collective futures.

Maintaining a generative as well as evaluative dialogue (what we should do as well as how well we do it) with constituents is an area of our work that is far too seldom funded. Nor, for that matter, do we often insist upon it as essential. The result is that too many of us end up too much in dialogue with our funders—and therefore share meaning and language with them—and in alienated relationships with constituents. (We have to do this to guard the fiscal stability of our agencies, or so we think.)

We are, of course, always in danger of mission drift as long as our funders are separate from those we are established to benefit. Many of us function in what is termed a muted market. In other words, we have more than one so-called “customer.”

We may be established to benefit a particular constituency (customer-users) but we are paid to do the work by others (customer-buyers). The purchasers of our work often do not share the world-view of our constituents. The interests of the two are often significantly enough different to require strongly principled resolution. Too often, a less principled resolution occurs as a sin of omission—that is, when a nonprofit spends too much time meeting the interests of funders, it may simply neglect to engage constituents: in the analysis of a situation, in gathering their visions when planning for a different future, and in investing their faith and labor to make that vision a reality.

In their book Nonprofits for Hire, Steven R. Smith and Michael Lipsky assert that nonprofit organizations are “tangible, significant manifestations of community.” They point out that three qualities are especially important in understanding the significance of community to nonprofit organizations:

  •  “A community is self-identifying. People belong in communities if they think of themselves as members.”
  • A community is fueled by voluntary action.
  • “Communities are important because it is in their midst that our most deeply held values are expressed… communities are not only self-conscious collectivities of shared sentiment. They also take on activities which are consistent with those sentiments.”

They go on to affirm, “Voluntary organizations embody some of the most prominent ways by which the rest of the world comes to know communities, and many have assumed nonprofit status. In short these organizations provide a key link between the citizenry and their government and changes in their character may produce major shifts in the citizen-government relationship.”

Other reasons to be particularly cautious around government are:

  • The federal government’s powerful framing of social problems may be overwhelmingly influential and wrongheaded all at once, often flying in the face of the everyday experiences of community members. Our inability to represent constituents properly or to organize them to represent themselves in the face of powerful institutional wrongheadedness can in fact worsen our communities’ alienation not only from nonprofits but from government as well. In other words, through sloppy and timid “helping” we may inadvertently further marginalize already disenfranchised communities.
  • According to Smith and Lipsky, government regularly deploys nonprofits “to aid or contain communities.” Nonprofits have frequently acted as extensions of government, implementing public policy through their programs in the field. Although this is perfectly allowable, it provides little assurance to those served that a given program is a well-meant aid strategy rather than a tactical one focused on containment or maintaining the status quo. Some agencies originally established to eradicate poverty in their communities unhappily find themselves in the business of delivering government funds that only temporarily alleviate some of the symptoms of poverty. In other words, there is already a muddy line of demarcation between certain government responsibilities and the work of nonprofits.
  • Issues framed to appeal to large political donors and the general voting public may be founded on simplistic slogans and multiple assumptions, many of which are unproven, untrue and the result of political expediency or (yes) contributor interests. These basic frames further produce language that is counterproductive and insulting in describing social problems and the people affected by those problems.

When nonprofits depend upon government for a good part of their subsistence and direction, they run the risk of compromising their own nonprofit-ness—that is, they stop playing the role of convener and facilitator of community action and become virtually indistinguishable from their government or for-profit counterparts.

So what’s the problem here? Aren’t we—as we hear many promote—all about collaboration between the sectors as well as between organizations? Aren’t we all about the happy blending of things? Such thinking borders on the dangerously naïve. This perspective is especially dangerous for those who are least heard and influential and for those who have fewer common interests with those in powerful positions in government and the market.

When we neglect our role as facilitators of community analysis and action, we concede to government the critical function of the portrayal of issues and posing of feasible solutions.

We need only look at the metaphor of the war on drugs to understand how horribly badly a problem and strategy can be framed at the federal level—and how tenaciously the frame will be guarded even when proof of failure is overwhelming. Despite its disastrous effect on communities of color, not to mention state budgets, the war on drugs continues to drive criminal justice policy. We now imprison more people proportionate to our population than any country in the world. When we accept funding provided in the context of such a frame we might not work quite as hard to demand a new analysis and strategy.

In a recent interview, Michael Lipsky suggested that nonprofits working under contracts to governments continue to underrate their potential collective strength. Lipsky cited the case of workers with homeless mentally ill people in New York City. When the state government announced its intent to freeze staff salaries in the face of rising costs, providers responded with what he characterized as “timidity.” “Nonprofits need to approach government courageously with what they are prepared to do and not let themselves be divided and conquered. They need to regard pushing back as a part of their work.”

Let’s be clear, taking government funding is not a bad thing. It is often only through government funding that we can bring a badly needed social reform to scale, and in some rare instances the government’s frame for a problem has been right on the mark. Admittedly, requirements for constituent participation in programs such as Headstart and certain HUD initiatives are stringent and well-developed; however, these are exceptions. In general, the willingness to barter our integrity and effectiveness for cash or a measure of organizational stability is one of the reasons why community people sometimes lose faith in nonprofits.

As I was writing this article, a reader commented that I might be asking people to be more heroic than they are likely to be prepared to be. In my 37 years of experience in nonprofits, I have found that most of us working in this sector long to be heroic enough to have our work transcend the usual, and I believe that it is by working in mutuality with heroic constituents that this transcendence occurs.

1. McCambridge, Ruth. 1994. A Participatory Inquiry Toward a Better Nonprofit Response Toward Homelessness. Boston: Fund for the Homeless, Boston Foundation.

In the matter of crafting public policy, who gets to frame the issue is often crucial. In other words, who owns the analysis and whose interests are served by that analysis?

The battered women’s movement, an extraordinarily effective grassroots political-social-public health initiative, emerged from communities of women who were deeply disturbed about the levels of violence in their own lives and the lives of women around them. Their initial response was building secure refuges for women—removing them and their children from immediate danger. A growing network of shelters provided an infrastructure for continuing dialogue and the construction of a powerful analysis challenging the conventional, laissez faire attitude toward domestic violence. The battered women’s movement traced the historical roots of violence in the home, producing an impressive body of original research, often shocking lawmakers and the public with graphic examples not only of abuse, but also of the cavalier treatment of abused women by public bodies. The movement claimed a feminist analysis, grounded by a critique of power in inter-gender relations, and stuck to it until popular thinking shifted to include this interpretation.

The battered women’s movement was able to change laws, policies, regulations, and public attitudes in fairly short order because it insisted on responding directly, and almost exclusively, to the needs of women who had experienced abuse. It had also learned the value of choosing carefully when and under what conditions to accept public funds. The movement rejected the “hapless victims” label popular among most funders in favor of viewing these women as powerful partners and survivors whose experiences lent credibility, depth and passion to the work. This is what we mean by the mediating function required of nonprofits entering the policy arena.

Losing Federal Funds: Constituents Transform a Kansas Shelter’s Funding Base

At one point the federal Law Enforcement Assistance Association, through which many shelters received funding in the early years, was completely disbanded. At least in the Kansas based shelter in which I worked, it was only through the efforts of a huge network of (women) volunteers that we were able to survive and, within six months, we transferred our funding base to one that was completely local. Despite being under attack for employing lesbians within the agency, we found that if we stuck to our analysis and continued to engage people with consistency and the power of our beliefs, the rest fell into place.

A note on the Boston Foundation’s Fund for the Homeless study: Departing from the traditional methods of social investigation, we adopted action research as the vehicle for capturing data, thus redefining the relationship of researchers and research subjects. Homeless and formerly homeless people developed research questions, conducted interviews and built interpretative frameworks. Indeed, one of the most striking outcomes of the research effort was the movement of these individuals into positions of power and influence in the sector—as researchers, grantmakers and program directors.

Ruth McCambridge is the director of program development at Third Sector New England.