GOTTA WALK BEFORE YOU RUN (via Pat Garnaas ):

Privatize the Welfare State (Howard Husock, March 9, 2006, Wall Street Journal)

In the era before passage of the Social Security Act in 1935, whose Title V provided for such spending, privately funded agencies yielded the bulk of U.S. social services, augmented by such local public institutions as poorhouses, asylums and orphanages. Nevertheless, such agencies -- and groups like the Child Welfare League of America -- assumed that government services would be at least as good as their private, often religiously inspired predecessors, as well as more universal in reach and standardized in approach, and thus preferable. They did not oppose government social-service spending, and, indeed, were often among its leading advocates.

In any event, greater government social service spending was certainly achieved. In terms of quality, however, it is hard to argue that things have worked out the way reformers intended. Consider services for children. Over the past 10 years, 22 to 36 children have died each year under the watch of New York City's Administration for Children and Families. A recent federal review of state child welfare agencies found that not a single state complied fully with federal standards. Then there's Head Start, whose potent name, and the fact that it provides grants to local organizations in every state, has made it immune to budget cuts. Yet a 2005 federal study involving 383 sites and 4,600 children found it led to no gains in math learning, oral comprehension or motivation to learn.

This record of government-provided services plays out today in a dramatically changing environment for philanthropy. In recognition of the wealth of soon-to-retire boomers, the Boston College Center on Wealth and Philanthropy estimates that philanthropic giving will total some $6 trillion between 2003 and 2050. Already, over the past 10 years, there's been an 88% increase in the number of foundations. Over the last decade there has been a 67% growth in the overall number of U.S. nonprofits.

Meanwhile, a wave of capable persons has come forward to establish effective new social service organizations, based on new ideas and with little or no government support. Indeed, it can be argued that we are now in an unprecedented period for the emergence of such people, who have started new types of job training, mentoring and immigrant-assistance efforts. The term "social entrepreneur" -- for those who establish such organizations -- has entered the language and become current on college campuses, where courses and research centers (Harvard, Duke, Stanford) on the topic have been established.

Thus the stars are aligned for nongovernmental organizations to play a much larger role in assisting those in need. To date, however, the Bush administration, in part as a matter of political pragmatism, has seen such groups less as substitutes for the welfare state than as potential new beneficiaries of it -- directing federal resources toward faith-based groups formerly independent of government, in an effort to "level the playing field" with nonreligious contractors. A case can be made, however, that a truly independent, philanthropically supported nonprofit sector can better sidestep the pitfalls that have plagued government. Such a sector would be likely to attract committed employees and volunteers. This was certainly the case pre-New Deal. More to the point, the willingness of Americans to answer a call to service continues to be strong, as reflected by the emergence of major new "brand name" nonprofits such as Teach for America, Prison Fellowship and Habitat for Humanity.

What's more, service organizations which rely on private donations -- whether from individuals or foundations -- might actually prove to be more accountable for their performance than their public or publicly funded counterparts

The Third Way is just a means back to the First Way, not an end in itself.

Posted by Orrin Judd at March 10, 2006 10:03 AM