The public be–who?

Two recent stories raise the question, Who determines the public good–or, even more broadly, Who is the public?  The first tale, from the June 28 New York Times, described the purging of a charter school’s Board of Directors by its major donors, so they could replace parent, teacher and community representatives with a more monied group and alter the school’s educational approach.  (Charter schools, though public, are governed by Boards of Directors like any other nonprofit.)

The second story concerned a preexisting nonprofit whose Board (in return for substantial government money) accepted a revision to its bylaws granting a permanent majority to government representatives.  Because it’s not technically a public agency, though, it’s free of the strictures of the Open Meetings Act, the Freedom of Information Act and the countless other ways we Americans have devised to keep an eye on the foxes who guard our political henhouse.

If these two examples are a sign of the long-heralded convergence among the sectors–nonprofits becoming profitmakers, private nonprofits forming partnerships with the public sector–they demonstrate that convergence is not, in fact, a consummation devoutly to be wished.

On the face of it, there’s nothing shocking about the idea that s/he who has the gold makes the rules, regardless of whether the gold-haver is a major private donor or a governmental body.  But when the institution being ruled is discharging a public obligation (like public education), shouldn’t there be some limit on the power of private money?  Charter schools were supposed to supplement public schools, not replace them; but if teachers, parents and community members are excluded from their Boards, then nothing distinguishes charter schools from plain old private schools–and we haven’t privatized primary or secondary education.  Or maybe we have, and it just hasn’t been announced. 

Conversely, when the institution being ruled is organized as an independent nonprofit, shouldn’t there be some limit on the power of public money?  If municipalities, states, counties, park districts, sewer districts and port authorities dominate the nonprofits they fund, it’s reasonable to ask why those agencies shouldn’t be treated as arms of the government, and therefore subject to civil service rules, or the obligation to hold public hearings.  As the Nonprofiteer’s informant said, "We’re supposed to be the third sector–not the second and a half."

(What do governments gain by capturing nonprofits, or by delegating major tasks to them?  Nonprofits can speed government purchases by assuming liabilities that would otherwise accompany them, such as the burden of cleaning up property laced with asbestos.  Captive nonprofits can create the false impression of an autonomous groundswell in support of governmental policies.  Troublesome nonprofits–that is, advocacy groups–can be silenced by the judicious application of public money.  Most of all, nonprofits can take the blame for failure, so elected officials don’t have to.  If the New York charter school doesn’t straighten up and fly right, that’s not Michael Bloomberg’s fault–it’s the fault of the donors, or the parents, or the community representatives; that is, the nonprofit Board.)

The Nonprofiteer has no answers to provide; she merely notes that these stories illustrate the darker side of public-private partnerships, so often hailed as the solution to anything not curable by whiskey in hot milk.  It’s important for society to know the difference between things determined by voters and things determined by donors–that is, between things everyone owns and things whose ownership is properly a privilege of wealth.

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4 Responses to “The public be–who?”

  1. M Fred Friedman Says:

    I have always been confused about the idea of public/private partnerships. I am on a lot (well two) organizations that are proud of the public/private partnership.

    As a mentally ill person at risk of homelessness who uses of lot of services, I have never understood the difference. In most cases the government provides the vast bulk of the money and tells the private partner what to do.

    The consumer is not the customer, the government.In some cases the customer is rich people that have a lot of discretionary money.

    what difference does it make to me if my case manager works directly for the government, or for a private agency that works for the government.

    Well, as I say in my blog (shameless plug http://nextstepsnfp.org/)

    I can’t do this by myself, you take it from here.

  2. Nonprofiteer Says:

    It may not make any difference to you as a consumer of services, but it should make a difference to you as a citizen whether your government is operating in public or in secret, and whether ostensibly independent charities are in fact offering an unbiased take on how well–or badly–services are being offered.

  3. Paul Botts Says:

    “if teachers, parents and community members are excluded from their Boards, then nothing distinguishes charter schools from plain old private schools”

    Sure, lots of things do: legal requirements, operating and admissions freedoms, etc.

    “a preexisting nonprofit whose Board (in return for substantial government money) accepted a revision to its bylaws granting a permanent majority to government representatives.”

    I happen to be intimately familiar with this case, and while I believe that board made a mistake there is a reasonable contrary view: that where taxpayer money is flowing the taxpayers’ representatives should be responsible for its use.

    Their mistake though, and the reason why the above scenario will remain rare, is failure to accept that public-sector control of a non-profit will keep said non-profit from ever building a private funding base. Foundations and corporate giving programs and major individual donors will flatly decline to make grants to such a non-profit or even consider proposals from it. Since no non-profit can in practice rely on public funding forever, this simply dooms the organization to wither and die sooner or later.

    “Because it’s not technically a public agency, though, it’s free of the strictures of the Open Meetings Act, the Freedom of Information Act and the countless other ways we Americans have devised to keep an eye on the foxes who guard our political henhouse.”

    This brings up a different issue, which is that burgeoning private non-profit sector is among the least transparent parts of American society. As Joel Fleischman has rightly pointed out about foundations, non-profits are by law and practice far less transparent to the public than are publicly-traded corporations, never mind government. Indeed about the only major sector that is any more secretive to the citizenry than non-profits are, is privately-held businesses and even that case can be argued.

    If indeed government agencies are increasingly pushing their responsibilities onto non-profits (a familiar claim which has never to my knowledge been proven accurate at any scale beyond the anecdotal), and if one motivation for that is the freedom from public scrutiny enjoyed by non-profits, then the best long-term solution would be for non-profits to become at least as subject to public disclosure and scrutiny as say corporations.

  4. Nonprofiteer Says:

    Increased public disclosure of the operations of nonprofits is doubtless a good thing. I don’t, however, think it’s a substitute for having public services provided by public bodies who are not merely transparent to the public but governed directly by the public. Nonprofit boards are community representatives, sure, but in a far more restricted sense than elected officials are community representatives. Thus, while I agree that where taxpayer money is involved taxpayer representatives should control its flow, that argues for leaving public services in the public sector where they belong rather than moving them into a sort of Twilight Zone where they’re paid for by private priorities (in the form of charitable gifts) while governed as though they’ve been selected as public priorities.

    This, by the way, is the same objection I have to tax check-offs: either we as a society want to fund breast cancer research or we don’t; it shouldn’t be a matter of individual determinations of where to direct collective tax revenues.

    Whether governments are sloughing off tasks onto nonprofits seems to me to be obvious: the creation of charter schools and the rise of “Friends of . . .” government programs demonstrate that. It may be that at the same time the government is taking responsibility for more things–health care, for instance–so that there’s a roughly even trade-off; that would be an interesting research topic.

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