Elizabeth Bolton, Ph.D. Community Development

Alexander, J. (Fall 1999). The Impact of Devolution on Nonprofits: A multiphase Study of Social Service Organizations. Nonprofit management and leadership. Vol. 10, no. 1. p. 57 – 70.

Devolution affects every organization that serves the public in the state of Florida. The author defined the term in this study to mean the process of changing organizations’ funding resources from government focused to block grants and state regulated funding. Also known as, “the new federalism,” the intent of devolution is to shift funding and oversight responsibility from the federal government and to individual states. The reality that gives wings to devolution is that programs financed by the federal government, particularly welfare programs, have been wasteful and ineffective. According to the author, devolution is part of a larger movement aimed at both government and nonprofit organizations. The assumption underlying this movement is that private sector practices and technologies are better and more effective than those in the public sector are.

The article points out that the goals of devolution were to make nonprofits central in providing services and to make government agencies a fallback. As the funding from government fluctuates the number and strength of nonprofits also fluctuates. This is evident as many organizations choose not to serve low-income groups, but rather the needs of persons they choose to serve. There is a correlation between the audience served and the presence of government funding.

Organizations that serve children and families in Cayahoga County, Ohio completed a survey to determine how devolution was affecting them. 124 surveys were completed and focus group results were included to determine possible ways for the organizations to survive. The results of the study showed that larger organizations already operating like a business entity were not likely to find themselves affected by changes due to devolution; while smaller organizations found it hard to adapt to these practices induced by devolution. The small organizations found it necessary to spend more of their limited resources on required management tasks and procedures and reduce the amount available to programs and client services. As the need to generate measurable outcomes grew, smaller organizations had to deal with changing their mission to survive in a new milieu of business operations rather than altruistic practice. One example showed that small organizations had to hire highly qualified and expensive personnel in order to be able to receive and maintain certain licenses.

Implications for Extension Programming

The implications of this article for Cooperative Extension suggest that the business model is the order of the day if public organizations are to survive and flourish.

The boundaries between for profit and nonprofit will continue to blur as competition becomes more intense and government funding decreases. Organizational leaders will need to be effective in lobbying and political involvement to ensure they are aware of events that might influence their funding or programs. The funding of welfare programs, how these changes affect the client groups, and the sponsoring organizations, are an example of how devolution works and the results of it. The question is: do we, in Cooperative Extension, ignore it and just hope for the best, or do we accept that it is happening and adapt our strategies to the changing realities of “new public management” which assumes that the efficiency of markets and the value of competition are the best way to serve many public needs

nonprofit, devolution, organizations