Seducing the Samaritan: The Contractual Corruption of Non-Profits
Joseph LeConte - Visiting Professor, Pepperdine University

Excerpt from the book
Seducing the Samaritan: How Government Contracts Are Reshaping Social Services (1997)

The public financing of private human service agencies is now the most important strategy for attacking social problems in America. A spokesman for the (Massachusett's) Council of Human Service Providers says the majority of private non-profits receive more than 80 percent of their revenue from state and federal sources. Even religiously based agencies, usually the most suspicious of government involvement, now rely heavily on public money.

There are four major effects of government financing and oversight on private providers. First, the rules and regulations bog down, penalize and dehumanize caregiving groups. Even for contract veterans, keeping up with reporting requirements can consume a third or more of the workweek. Often the rules and regulations simply violate common sense. Consider the state's Key Program, which offers counseling and support services to about 700 youth daily, most of them in trouble with the law. Most of the program's $15 million budget comes from state and federal sources, which makes the Key Program subject to the federal Americans with Disabilities Act (ADA). Under the ADA, all 40 program sites must be fully accessible to the handicapped. But none of the program's kids are physically disabled. Says Bill Lyttle, a 20-year veteran of the agency, "Our programs are not designed to service handicapped kids. We serve delinquent kids. There are not a lot of delinquent kids out stealing cars in wheelchairs."

A second problem is mission creep, or how the availability of public funds alters the agendas of private agencies. What happens, for example, when an organization devoted to meeting the educational needs of the poor accepts a lucrative contract for child protective services, regardless of whether it has the human resources to do the job? The goals of a government agency may have much more to do with the politics of the day than with the real needs of the community. Kristen McCormack, formerly of the Federated Dorchester Neighborhood Houses, recalls a summer camp contract for Department of Social Service (DSS) children. After years of struggling to help the DSS kids, McCormack told a state official that Federated Dorchester wanted to terminate the contract because it did not fit their mission, and they could not adequately care for the children. The DSS officer reminded McCormack of the $2 million in daycare contracts that her agency also had with the state. Federated Dorchester renewed the summer camp contract.

A third effect is the way government assumes the role of therapist. Federal state agencies may dictate not only a broad philosophy of assistance, but the tiniest details of social programs. They exercise this control in numerous ways, through credentialing and licensing requirements, federal and state regulations of statutes, and the fine print of their contract agreements with private providers. For example, the Massachusetts Association of Approved Private Schools gets state money to educate the mentally and physically handicapped. Department of Education regulations limit providers to operating either a day program or a residential program. If a program director thinks it would be better to place children with adults in private homes instead of in a facility, he cannot do it because private homes do not fit the residential model. Ironically, government initially bought the services of private providers because of their expertise and effectiveness. Now, however, government agencies often predetermine literally all aspects of services to the needy.

Finally, government tends to secularize providers under contract. State regulations and approaches can crowd out religiously based models of care. I asked an official at Saint Francis House, a homeless shelter in Boston, what was Franciscan about the agency since its mission statement now carries no reference to religion. He said, "We've got pictures of Saint Francis in every office." Church state legal doctrine can undercut the integrity of religious providers. From hiring practices to program content, government exerts a powerful tug in its secular direction. To avoid church/state challenges, religious groups are careful to separate their government-funded acts of charity from explicit expressions of faith.

To help the needy in the most humane and effective ways possible, we must do more than describe the problems. The state maintains its grip on private caregivers primarily through the regulatory pen and the contract purse. If we want private agencies to have greater leverage over their own mission and objectives, to be more in tune with the deepest needs in their own communities, we must confront the purse. We can begin by forging new partnerships between non-profits and businesses and corporations. We can use a combination of public and private vouchers to introduce market pressures by placing more decision-making power in the hands of consumers. We can create charity tax credits and reform tax codes to shift social responsibilities to individual taxpayers and help change the culture of giving.

To make private groups the real architects of caregiving, we must also take on the pen. Government regulation and oversight could be bypassed or restrained. We can begin by creating alternatives to licensing rules. For example, recovering drug addicts lacking professional credentials could freely counsel those struggling with addictions. We can make it easier for medical professionals to donate time at neighborhood clinics by reforming liability laws. We can get people out of state custody by allowing independent advocates to serve as sponsors and guardians. We can reward effective programs by paying agencies only if they produce tangible results and letting them decide the best way to do the job.

Legislative action is certainly needed to limit government. But citizen-led initiatives are also essential to reengage ordinary Americans in the project of caring for their neighbors.