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Racial diversity and government funding of nonprofit human services

By Eve E. Garrow

Does the government fund nonprofit human service organizations that serve and locate in the neighborhoods with the greatest needs? This is an important question, as much of the safety net now takes the form of human services delivered, for the most part, by nonprofit organizations. Access to government benefits therefore relies increasingly on the location of nonprofits that are awarded government funds to provide human services. While conventional wisdom holds that the partnership between government and the nonprofit sector does direct government benefits to poor areas, recent research finds an opposite effect in poor neighborhoods that are substantially African American.

The prevailing model of government-nonprofit relations argues that privatization of human services is a “win-win” partnership, because nonprofits need government support if they are to survive in resource-poor neighborhoods, and government fulfills its mandate to serve poor people by funding these organizations. Indeed, research shows heavy dependence on government funding among nonprofit human service organizations that serve poor populations and locate in poor neighborhoods.

Yet, this research does not take into consideration the influence of race on the distribution of government benefits. A recent study using data from a probability sample of nonprofit human service organizations in Los Angeles County examined the likelihood that organizations received government funding. It found that greater levels of neighborhood poverty improved the chances that nonprofit human services located in them received government funding — unless those neighborhoods were substantially African American.

As shown in the graph below, the analysis compared neighborhoods with small shares of African Americans to neighborhoods in which the share of African Americans exceeded 20 percent of all residents — the “tipping point” at which whites tend to view the neighborhood as being “too African American” and avoid it. In neighborhoods that are less than or equal to 20 percent African American, the likelihood that the organization will receive government support increases along with rising poverty, consistent with the partnership model of government-nonprofit relations. In neighborhoods that exceed 20 percent African American, however, the relationship between neighborhood poverty and government funding reverses. As neighborhood poverty increases, the likelihood that nonprofit human service organizations receive government funding decreases.

Interaction between percent living in poverty and percent African American residents in location


The analysis also examined the relationship between the poverty rate and receipt of government funding for organizations in census tracts with different percentages of Latina/os, another minority group in Los Angeles County that experiences high levels of poverty. As shown in the figure below, higher neighborhood poverty seems to encourage government to fund local nonprofit human services regardless of the percentage of Latina/os in the neighborhood.

Interaction between percent living in poverty and percent Latina/o residents in location


What accounts for the failure of the partnership model in poor African American neighborhoods? First, and consistent with research that demonstrates a pattern of systematic government disinvestment in programs for vulnerable minority populations, the findings suggest that the allocation of government funding to nonprofits is subject to discriminatory forces. It could be that policymakers and public officials are reluctant to channel funding to neighborhoods that are negatively constructed and widely viewed as undeserving of government largesse, and direct limited funding to neighborhoods that are viewed as more deserving. It could also be that supposedly “color-blind” grant and contract programs that rely on competition tend to shut out historically oppressed minority neighborhoods that lack competitive advantages.

Yet, this does not explain why government is relatively responsive to poor neighborhoods with a high percentage of Latina/os. After all, Latina/os, like African Americans, are subject to discrimination in the American stratification system. The difference may lie in the relative electoral power of blacks and Latina/os in Los Angeles County. Political representation should influence allocation decisions, because groups with political power cannot be ignored even if they are negatively constructed. In Los Angeles County, African Americans represent a small percentage of the electorate — about 8 percent in 2010 — and their numbers have been shrinking in recent decades. By comparison, the percentage of Latina/os in the county, which stood at about 48 percent in 2010, is relatively large and increasing. Given their diminished electoral clout, poor African American neighborhoods may be more disadvantaged than poor Latina/o neighborhoods when it comes to attracting government funds.

The findings are particularly disturbing given that African American are more likely than other minority groups to live in neighborhoods that are both poor and highly segregated from whites. Indeed, the racial dynamics uncovered in this study suggests that the privatized welfare state may underserve neighborhoods where the need is greatest.

Eve E. Garrow is Assistant Professor of Social Work at the University of Michigan. Her research focuses on the implications of privatization of human services for poor and marginalized groups, especially racial minorities, and the commercialization of human services. She has published and presented works on government funding of human services, the role of nonprofit advocacy in promoting social rights, and the risk of client exploitation in nonprofit social enterprises that use clients as labor. Her most recent article, “Does Race Matter in Government Funding of Nonprofit Human Service Organizations? The Interaction of Neighborhood Poverty and Race,” was published in the Journal of Public Administration Research and Theory.

The Journal of Public Administration Research and Theory serves as a bridge between public administration and public management scholarship on the one hand and public policy studies on the other. Its multidisciplinary aim is to advance the organizational, administrative, and policy sciences as they apply to government and governance. The journal is committed to diverse and rigorous scholarship and serves as an outlet for the best conceptual and theory-based empirical work in the field.

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