How Can Government and Nonprofits Work Together Most Effectively?

If it smells like a fish…

Today I’ve been thinking about how government and nonprofits work together.  I attended a house party for a mayoral candidate last night, and one of his priorities is reforming/improving how the City works with community based organizations. So I read the full report on his website.

While I’d certainly not dispute the fact that too many (especially small) nonprofits are not run as efficiently and effectively as possible, I have real reservations that government is going to fix that problem. One of the reasons, after all, that they’ve farmed the work out to nonprofits in the first place is that they don’t have the resources, expertise and/or will to effectively execute.
 It would be equally fair to note that many government grant disbursement programs do not run as efficiently as possible; so, they end up giving money to the wrong places and don’t effectively monitor spending and assess outcomes. These guys are already working inefficiently, so why is giving them more authority and responsibility (another ‘layer’ of bureaucracy, really) going to improve things?

One of the recommendations is consolidating nonprofit administration (back office functions) through MSOs. Sounds like a dream from which, once you wake up, you realize it’s really not practical. I wonder if it’s been tried in other cities/counties and been proven effective. I’d be a bit concerned that outsourcing these essential functions keeps nonprofits somewhat infantilized.  Nonprofits can’t outsource leadership and need to be aware of and familiar with their financials, legal requirements, potential responsibilities and liabilities at all times. So this could prove problematic. Another concern is that this simply provides full-service employment for administrative offices of existing nonprofits that are sizeable.  These offices will need to hire additional staff to fulfill the function of MSO, so I’m not sure that net/net we’ll see significant reduction over the sector in administrative expenses.  Also, will the organization offering the MSO services be as conscientious with the resources of others as they are with their own?  Assessing potential liability issues is not the same thing as assuring optimum effectiveness. Oversight would be required, and this is yet again another layer upon another layer.