Nonprofit Service Providers as Interest Groups on the Inside

• In Event: Organizational Politics and the American Political Economy

Abstract

Since the 1960s, all levels of government in the United States have relied on nonprofit organizations to provide critical services to their citizens, often subsidizing them through competitive grants and contracts. As a result, nonprofit service providers are not only a privatized form of “street-level bureaucracy” but also influential interest groups in local and state politics. However, few have examined the consequences of nonprofit influence on the local level. Using interviews and participant observation, I present a qualitative case study of New Haven’s city government and nonprofits in the policy areas of homelessness and affordable housing. I argue that nonprofit service providers act as “interest groups on the inside,” who are both constrained and empowered by their financial relationship with the government. In turn, government bureaucrats and elected officials regard nonprofit workers as subject matter experts and powerful allies outside formal government bureaucracy. Further, I argue this close relationship allows nonprofit service providers to stymie government attempts to expand its own service provision. These findings shed light on how institutional arrangements shape interest group involvement in local politics and speak to normative debates regarding the democratic accountability and transparency of local government.

Author

• Nicholas Ottone, Yale University