The inauguration of a new
president raises uncertainty for all sectors of our economy, namely each
sectors role in society. Generally, the
private sector’s role is to meet the demands of consumers who pay for a good or
service. Similarly, the public and
nonprofit sectors are accountable to their own “consumers”-tax payers and
funders, respectively- to provide quality services with demonstrated outcomes (Renz,
104). However, the private sector
differs dramatically from the public and nonprofit sectors in its defining
objective of generating a profit (Renz, 44).
When a good/service is
not profitable for a for-profit business, the public sector serves in helping
to provide that good/service. Economists
argue the public sector helps correct “failures” of the private market, such as
“free-riding” or refusing to pay for a good/service (Berman, 6). The public sector also serves to protect
consumers who may lack information about the quality of a good/service and may
be taken advantage of by profit-seeking organizations not concerned with social
welfare. The public sector continues
this watchdog role and can regulate the private sector from engaging in
behaviors that may generate a profit for a few people, but are harmful from a
societal perspective (i.e. pollution) (Weisbrod, 20).
The public sector
operates with a focus on the majority, sometimes creating gaps in the services
it can or chooses to provide. Market
theory suggests nonprofits arise to fill this gap between the goods and
services offered by the public and private sectors (Renz, 191). The nonprofit sector can focus attention on
issues that aren’t addressed by the other sectors, such as providing services
to people who do not quality for public welfare programs. The nonprofit sector raises social capital by
becoming a venue for collective community action, helping to focus resources
and unite people around a common goal. In
effect, the nonprofit sector is a hallmark of the democratic system, providing
a diverse venue for people to collectively act around a common goal for public
interest. “Nonprofit organizations are the means by
which citizens who want more of some collective good or service can supply that
need” (Weisbrod, 20). The public expects
nonprofits to be motivated by this commitment to public good (Renz, 196).
Historically, a
conservative government results in a downward shift of power towards more local
control (Renz, 24). As the public sector
shifts away from “big government policies”, nonprofits face a greater role addressing
the “social welfare vacuum” (Berman, 6).
Resulting from a contentious election, further uncertainty and mistrust
in the public sector put added stress on the nonprofit sector as people seek
solutions outside the political arena. Yet,
as Berman states, “One sector cannot prosper without the others” (Berman, 9). The three sectors are interconnected and
interdependent. The nonprofit sector
relies on funding from both the public and private sectors. Government policies themselves affect both
the difficulties and successes nonprofits face and address. An increasing commitment to corporate social
responsibility links for-profit and nonprofit sectors (Berman, 7).
The lines between the
three sectors are becoming more blurred as neither sector can stand alone (Renz,
32). The roles of the three sectors
should continue to become more interdependent, interwoven, and collaborative to
address societal problems. There is a
need to move away from the emphasis on “compliance-driven accountability” which
focuses on short-term, quick, tangible impacts (Renz, 119). Funders and service-providers spanning across
all sectors must come together to discuss longer-term strategies to address
root causes to complex problems and systemic issues (Renz, 119). The roles of the three sectors should
continue to intertwine to promote collaboration and collective action around
research, education and, practice.
Berman, Howard J. "Doing “Good” vs. Doing “Well”: The Role of Nonprofits in Society." INQUIRY: The Journal of Health Care Organization, Provision, and Financing 39.1 (2002): 5-11.
Renz, David O. The Jossey-Bass handbook of nonprofit leadership and management. John Wiley & Sons, 2016.
Weisbrod, B. A. The role of the nonprofit sector. Harvard University Press. Cambridge, Massachusetts. 1988.
