Social Capital and Political Theories of the Nonprofit Sector

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Social Capital and Political Theories of the
Nonprofit Sector
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Outline

• Political theories of nonprofits
• Social capital and nonprofit management

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Nonprofits as Mediating Structures

• Protect individuals from alienation before
  Leviathan by translating social problems into
  personal terms (Berger and Neuhaus 1977)
• Enhance states legitimacy by connecting public
  problems to private means
• Roman Catholic subsidiarity mediating the
  relationship between people and governments

Ref. Frumkin (ch 2) 2002
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Nonprofit Links with the Political Process
Least political
1. Social capital building
2. Civic engagement
3. Grassroots organizing
4. Advocacy
5. Lobbying
6. Direct electoral activity
Most political
Ref. Frumkin (ch 2) 2002
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Political Theories of Voluntary Associations

• Nonprofits counteract the coercive power of the
  state
• Nonprofits are a laboratory for institutions that
  governments later adopt
• Nonprofits provide space between individuals
  and states (Locke)
• Voluntary associations are a force to fragment
  the proletariat (C. Wright Mills)

Ref. Frumkin (ch 2) 2002
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Tocquevilles Model of Voluntary Associations
Civic association
Political association
Equality
Democracy
Ref. Frumkin (ch 2) 2002
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Links Between Government and Voluntarism

• Moral suasion (Reagan)
• Promotion of national service (GHW Bush)
• Stipended volunteering (Clinton)
• Faith-based initiatives (GW Bush)

Ref. Frumkin (ch 2) 2002
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Social Capital
Robert Putnam Networks, norms, and social trust
that facillitate coordination and cooperation for
mutual benefits
Francis Fukuyama An institutional informal norm
that promotes cooperation between two or more
individuals
Synthesis The trust and social cohesiveness that
promotes giving, volunteering, and participation
in civil society
Evidence of social capital is more tangible than
social capital itself
Ref. Putnam, Fukuyama
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Two Types of Ties Foster Social Capital
Bonds

• Ties based on homogeneity of identity, demography
  and sense of purpose
• Can promote pursuit of narrow interests at the
  expense of the wider community
• Ties that span social differences (gender,
  ethnicity, SES)
• Build social trust that facilitates cooperation
  for mutual benefit

Bridges
(Putnam, 2000)
Ref. Granovetter (1974)
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Social Capital Is Based on Two Types of Trust

• Arises from repeated interpersonal interaction
  (networks of individuals)
• Takes time and effort
• Can promote pursuit of narrow interests at the
  expense of the wider community
• Arises from general knowledge about a particular
  population
• Becomes established more quickly

Personalized
Generalized
Ref. RAND arts benefits model
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The Policy Environment

• United States
• Welfare reform (1996)
• Time limits, changes in wealth restrictions
• Faith-based and community initiatives (2001)
• Other countries
• Privatization
• Reconstruction of civil society
• Social capital produces public benefits without
  the public sector
• Nonprofit managers are administrators of social
  capital

Ref. Brooks PBF
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Benefits of Social Capital

• Less passive reliance on state
• Proactive citizen intervention into social issues
• Schools, crime, economic development
• Constructive association
• Money for charities
• Lower transaction costs with contracts and laws
• Fewer public resources needed to govern
• Amelioration of excessive individualism
  (Tocqueville 1835)

Ref. Putnam, Fukuyama
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Costs of Social Capital

• In-group trust means out-group distrust
• Some social capital is socially destructive
• Less interchange of ideas between tight-knit
  groups
• Less moral suasion not to cheat out-group members

Ref. Fukuyama
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The Putnam Hypothesis

• Social capital is falling in America
• Evidence lower attendance by many traditional
  groups (e.g. PTA, bowling leagues, church-related
  groups)
• Reasons
• Societal cynicism
• Female labor force participation
• Populaton mobility and rootlessness
• Less marriage, more divorce, fewer kids
• Technologyindividual consumption of leisure

Ref. Putnam
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Not Everyone Subscribes to the Putnam Hypothesis

• Some groups increase membership, others
  losecant just study the losers
• Group membership was abnormally high in the
  American 1950scant measure from that point

Ref. Fukuyama
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Social Capital and Public-Sector Effectiveness
Are Inter-related
Ref. Brooks NVSQ 2002
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An Economic Theory of Social Capital

• Hypothesis Social capital is a natural
  adaptation to suboptimal non-cooperative behavior

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Prisoners Dilemma Implications

• Without trust, dominant (but suboptimal) strategy
  obtains
• With trust, optimal strategy becomes viable
• Social capital promotes cooperation through trust

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Lessons for Policymakers and Managers

• Dont assume that social capital is always good
• Example Social capital can push giving and
  volunteering either up or down
• Individual and community-level social capital
  have different impacts
• Create proper conditions for social capital
  creation (e.g. property rights, public safety)
• How does the public sector impact social
  capitaldoes it encourage crowding out?