Nonprofits and their donors should focus on forming values proactively rather than just reforming people in dire need.
In yet another of his dramatic executive orders, President Trump has focused on concerns about the nonprofit sector—a sector historically supported by charitable giving and philanthropy but that has become dependent on government grant-making. Trump criticizes the priorities of such grants in ways that won’t surprise. In the order directing all federal agencies to review their grant-making, he writes:
“Every tax dollar the Government spends should improve American lives or advance American interests. This often does not happen. Federal grants have funded drag shows trained doctoral candidates in critical race theory, and . . . promoted Marxism, class warfare propaganda, and other anti-American ideologies in the classroom, masked as rigorous and thoughtful investigation. “
The president is not wrong about the extent to which progressive causes have garnered government support. But for those who cherish an independent American civil society— to help those in need, mobilize volunteers and send messages about good behavior—government grants pose a problem not mentioned by Trump: there are simply too many social service organizations that have become dependent on government and distorted by that dependence. This is not the welfare state of Medicare, Medicaid, and food stamps. It’s what can be called the social service state—government-supported nonprofits who take it as their mission to correct social ills, from teen pregnancy to drug addiction.
The scope is vast. The Urban Institute has found that in 2021, the federal government extended 42,000 grants to nonprofits and entered into another 11,000 contracts. The Administration for Children and Families, the beating heart of the federal Department of Health and Human Services, disburses no less than $68 billion in federal funding, much of it to be matched by state spending. It boasts that its budget is “larger than whole cabinet agencies like the Department of Justice, Department of Interior, and the Treasury Department.”
This spending notwithstanding, we are plagued by social maladies: a wave of deaths of despair, evidenced by 100,000 drug overdoses; violent crime, especially in lower-income communities; and the persistence of single-parent families likely to remain mired in poverty.
This reflects more than a financial shift from private to public funding. It is also a shift away from what was once an independent civil society—both religious and secular—which promoted the building of virtue and character, and toward government social services that seek to rehabilitate those who have already made unfortunate life choices. In the words of Charles Loring Brace, founder in 1853 of New York’s Children’s Aid Society, pre-governmental civil society emphasized the “formative” vs. the “reformative.”
Brace, a Protestant minister whose Children’s Aid Society had Catholics and Jews among its board members, founded the Newsboys’ Lodging House, where he sought to impress upon the newsboys, later made famous as Broadway’s Newsies, that gambling and dishonest dealing were not a reliable route to prosperity. He did not offer counseling for gambling addiction; rather, he promoted constructive behaviors to prevent it. As he wrote in his 1873 autobiography, The Dangerous Classes of New York and Twenty Years Among Them, “If you are selling papers, run fast and be quick, do honestly by every one who deals with you, work early and late, and you will soon begin to save money. . . . That is the way many men acquire wealth—by constant saving and hard work. At any rate, whether you are rich or not, you make an honest living and you have no reason to be ashamed of your business, and no fear of the law."
But, beginning in the Progressive era, the sheer extent of hardships and economic inequities began to overtake concern about empowering the poor through exposing them to middle-class, bourgeois norms. This concern was not misplaced. It was a time before workmen’s compensation, unemployment insurance, or public assistance for the desperate. At first, the idea of creating what we’d call today a safety net was not inconsistent with a focus on individual self-improvement. As social work pioneer Mary Richmond put it in her book Social Diagnosis: “Mass betterment and individual betterment are interdependent.” She warned that “personal and social causes of poverty” are interconnected and “form a tangle that no hasty impatient jerking can unravel.” As she wrote, those “who are trying to improve conditions in poor homes should welcome the experience of those who are studying trade conditions and other more general aspects of questions affecting the welfare of the poor. But they should not permit themselves to be swept away by enthusiastic advocates of social reform from that safe middle ground which recognizes that character is at the very centre of this complicated problem; character in the rich, who owe the poor justice as well as mercy, and character in the poor, who are masters of their fate to a greater degree than they will recognize or than we will recognize for them."
Such views did not prevail. Government, including the federal government, would come not only to create a range of financial assistance program to fund our welfare state, but would do the same for a wide range of social service programs, which would be delivered by what had formerly been independent, civil society organizations; they would become “service providers,” no longer disseminators of values but providers of services for clients, seeking to cure, rather than to avert. This is the social service state. Government would provide the means to permit private social programs to “go to scale”—but in the process changed their fundamental nature.
A key figure in this history was Grace Abbott, the first head of the federal Children’s Bureau, a sort of in-government advocacy organization. In her language and ideas, she sounds contemporary. She envisioned a range of government-supported “maternal and child-health services” formulated on the basis of seven distinct criteria, including that they “provide for the development of demonstration services in needy areas and among groups in special need.”
She was candid in saying that children were just the beginning. As she wrote, “Historically, the children or the cause of children has been the spearhead in the struggle for better economic and social conditions, better organization of the government for the service of its citizens. . . . [T]hose who have undertaken to safeguard children must propose what often seems, at the time, a revolutionary change in the conception of the functions of government, and must experiment with new administrative and judicial procedures.”
This would mean much more than providing economic security through financial support. It would mean government-supported social services focused on rehabilitating the troubled rather than civil society groups promoting formative virtues.
In her own time, Abbott’s views were understood to be a dramatic departure from tradition. Dr. Ray Lyman Wilbur, the Hoover Administration’s Secretary of the Interior, debated Abbott at the 1929 Conference on Children and Families. Government agencies should not try to replace parents, he said: “No one should get the idea that Uncle Sam is going to rock the baby to sleep.”
Abbott argued otherwise, for federal grants directed to private groups. Her vision came to fruition slowly. Architects of the New Deal were actually confident that social services would be little needed. It was assumed that, once the Depression lifted, most households would be part of the labor force—and that the role of state would be to provide protection against such exigencies as poverty in old age, disability, and widowhood. They were surprised when, amidst the prosperity of the postwar era, public assistance caseloads began to skyrocket, as, for instance, the Aid for Families to Dependent Children program, originally intended for widows with children, was redirected to single, unmarried mothers.
The Kennedy administration came under public pressure to deal with rising welfare caseloads. If those receiving public assistance were not evolving into social insurance contributors on their own, this argument ran, then government should intervene with “rehabilitation” and with “preventive and protective services,” intended to “strengthen family life and help individuals attain self-support.”
It talked about “waging war on dependency.” The weapons of that war would be social services funded by Washington; the troops would be an army of government-paid professional social workers. The Bureau of Public Assistance was renamed the Bureau of Family Services. Washington would deliver what President Kennedy promised when he signed the 1962 legislation: “rehabilitation not relief.” It was a watershed, the point at which federal grants for social services began to flow to independent nonprofit organizations, previously supported almost solely by philanthropy and charity.
Kennedy’s phrase was deeply revealing. Rehabilitation implies correction, whether of personal failings or actual wrongdoing. Indeed, the law specified failings to be remedied, including “dependency, juvenile delinquency, family breakdown, illegitimacy, ill health.”
There is a vast difference between the historic norms promoted by Brace—“reward for good conduct, success for industry, hope and applause for honesty and virtue, and pain and loss and disapprobation for idleness and dishonesty and vice”—and the new federal grants, which aimed for such goals as “the effective location of deserting parents; the simplification and coordination of administration and operation [to] greatly improve the adequacy and consistency of assistance and related service.”
Today, what was once our independent sector, promoting constructive virtues and values, has become an arm of government’s generally vain efforts to help those who have already made bad life decisions. Faith-based charities have been transformed into government contractors, with an inevitable loss in discretion about message and values. The largest single source of revenue, for instance, for Catholic Charities of New York is the $37 million it receives from government sources. This reminds us of something we know from the private sector: one’s major investor often calls the shots. At the same time, the entire budget of the Boys and Girls Clubs of America is just $1.7 billion, the YMCA $155 million, and the Boy and Girl Scouts less than $500 million,
In effect, they compete with government-supported social service organizations—which themselves seek charitable support to match their federal grants, which serve as an implicit seal of approval.
It would be no easy task, politically, to roll back not just politically influenced grants to nonprofits but also the larger social service state. Howls of protests could be expected. But America was built on the norms set by religious organizations and an independent civil society. Perhaps Trump’s order can be a first step back in that direction. But best for charitable donors to support organizations that favor not the reformative but the formative.
