The Non-Profit Industrial Complex in Arkansas

By: Nicole Schaum

Disclaimer: The views expressed in this post are those of the author, and do not necessarily reflect views of the Journal, the William H. Bowen School of Law, or UA Little Rock.

“True generosity consists precisely in fighting to destroy the causes which nourish false charity.”- Paulo Freire, The Pedagogy of the Oppressed.

The purpose of bringing up this controversial topic is not to shun non-profits and foundations that are providing essential services to communities that would otherwise be ignored through government intervention, but to instead question the status-quo in hopes that we can start holding the voluntary sector to be more accountable, transparent, and ethical to the communities they serve.

Non-profits and foundations are not the answer to fighting inequity and inequality nor or they the answer to fixing structural roots of oppression (both systemic and systematic) that Arkansans face daily. Often, nonprofits and foundations perpetuate the cycle of oppression. This is not to say all non-profits and foundations are worthless, those that operate in a way that listens to and uplifts the community, focus on recentering and not inclusion, and reach the root problems of social justice issues are different from those that only create superficial solutions or act as a private-public conduit for implementing government social services programs like a shadow state. When nonprofits are a part of a deep-rooted system that ignores or obstructs significant change then they can be pejoratively called a part of The Nonprofit Industrial Complex (“NPIC”).

The NPIC is the product of relationships between the government, the upper class, and wealthy foundations that reflects the status-quo of power dynamics. The shadow state, a term coined by Jennifer Wolch, describes the rise of voluntary sector organizations who have taken on the responsibility of providing social services to the public that were once administered and provided by government agencies. These organizations take on these responsibilities while remaining within the confines of state control.

A better view of a nonprofit is as an agent. If we cut through the Rube Goldberg machinery of service delivery that is often convoluted and hard to explain, nonprofits are essentially an agent for the government and act as the government would in providing services to the oppressed. In this arrangement, the government or foundations task nonprofits with deciding who is worthy to receive services. In many, if not most, situations, the people who fund or operate nonprofits are wealthy, white, middle aged professionals deciding what is best for low-income individuals, immigrants, BIPOC, queers, or anyone that is not at the top of the social ladder.

It makes sense, initially, that we should, to some extent, allow nonprofits to distribute services that the community needs. Often, we assume that nonprofits know their community, the struggles and goals of people they serve, and can effectively deliver services in a cost-efficient way. Too often nonprofits and foundation, however, are run and created by white, middle aged, traditionally educated, upper class members of society. They view their role in nonprofits as a catalyst for change, but that is rarely reality. Naturally, people who have power and money want to keep their power and money. When nonprofits are led or controlled by people who benefit from the status quo, they typically reinforce the status quo instead of challenging it.

While direct services are needed throughout this state, the institutionalization of direct services through nonprofits reinforces the conditions that create a need for those services and nonprofits in the first place and only create the veneer of progress by highlighting “charity or help”. When a nonprofit only supports the band-aid or ad hoc solutions, they perpetuate the problem. Think about it this way, a foundation gives out a grant to a nonprofit in the community to tackle issues it sees with poverty. The foundation gives a grant to a local nonprofit to carry out a service to help those facing poverty. This seems great, but it is usually a temporary or superficial solution, perpetuates the status-quo and normalizes or hides the problem with marketing. This approach creates a buffer zone and allows nonprofits and foundations, run or controlled by the wealthy, “to avoid chaos by ‘taking care of the people at the bottom, keep hope alive amongst the poor, and control those who want to make change’.”

A better use of a money to achieve a better community and world would be to spend it on lobbying and legislation to achieve long-term solutions to create essential social change.   But radical social change doesn’t always help the wealthy, who already benefit from policies that allow tax avoidance through charity.  Preserving the NPIC also allows the people who control and publicize charity to determine who and where to help to enhance their images with marketing and public relations success stories. So instead, we continue to provide charity instead of agency to people and rely on nonprofits that often exist to benefit the people who already benefit the most.

There are many possible solutions to this issue, but getting rid of nonprofits all together is not the solution. Many non-profits are essential to certain communities that have fallen into gaps unnoticed by the government. One solution that is not easy but needed is for us, as a community, to hold our nonprofits accountable and demand transparency, and recentering. Most importantly, if we want to see change in our non-profit sector here in Arkansas, we all need to get involved in making it happen.




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