Abstract
The principal contributions in Bryce’s Nonprofits as Policy Solutions to the Burden of Government are in its advocacy for the increased utilization of a specific class of nonprofit organizations as a means to lessening the burden of government and in its detailed explanations and information for forming and maintaining these types of organizations within the bounds of existing laws. Bryce’s main goal in lessening the burden of government is improved efficiency (pp. 17–18). The main mechanism for improving efficiency is choice. His argument is that providing nonprofit alternatives to government provision of goods and services brings about choice which leads to efficiency. Nonprofits allow for a suitable alternative to government for various reasons: (a) they are financed voluntarily rather than compulsory taxation; (b) they are financed by investors who assess economic worthiness; and (c) it creates an organization around a mission that can create a core competency and greater efficiency by specialization. Bryce references the national debt as the main argument for why improved efficiency is needed.
Nonprofits that earn business income, or in most cases, those that charge fees-for-service, are identified as a main candidate for lessening the burden of government. Bryce separates the special case of nonprofits into doers and facilitators. Doers are nonprofits that are “most likely to assume and to carry out a burden of government” (p. 69). Facilitators are those that raise money to support the doers or who “facilitate in other ways such as being a catalyst or a coordinator so that other might directly and effectively lessen the burden of government” (p. 69). As mentioned, Bryce provides helpful and detailed explanations of the laws and tax codes relevant to forming and maintaining these nonprofits. For example, the book provides excellent explanations for the tests required for two types of doers: (a) 509(a)(1) types that rely on contributions (e.g., The Vietnam War Memorial) and (b) 509(a)(2) types that depend mostly on business income (e.g., The Retiree Resource Corporation). This book serves as an excellent resource that clarifies the existing tax laws.
Given that much of the book is devoted to explaining how to form and maintain these nonprofits within the bounds of existing law, Bryce’s main audience are practitioners, both government actors and private actors, who are seeking to form nonprofits that lessen the burden of government. At times Bryce does also provide suggestions for college-level class activities or discussion, so instructors and students in fields such as law, government, public policy, public management, and nonprofit studies are also within the target audience. Researchers and scholars of these same fields may also be an audience and, indeed, they will find many concepts for engagement within this book.
However, the book could do more to address the research in public administration and public management on the numerous and competing public values (see Bozeman, 2007; Moore, 1995). Public managers are in a constant struggle to balance efficiency with other public values such as effectiveness, responsiveness, representation, equality, and justice, to name a few. This contrasts with business where the need for profits, and by extension—efficiency, is the reason for existence and thus the main concern. For nonprofit organizations, mission and vision statements delineate which values are important. While substituting nonprofits for government in the provision of goods and services may safeguard some of these public values, removing public ownership of the organization also removes the need to adhere to some public values. By justifying nonprofit organizations on the basis of efficiency, Bryce misses much of the discussion on public values in government and nonprofit organizations.
Bryce references the national debt as the main argument for why improved efficiency is needed. However, beyond the self-evident benefits of improved efficiency, the book does not address the specifics of how this approach will reduce the national debt nor any of the caveats or exceptions where creating nonprofits in the place of government organizations will not lead to efficiency gains. In his theory, Bryce argues that those who do not pay directly for the services of the nonprofit may donate based on their valuation of how these services benefit the community—a situation which reflects both market value and the value of positive externalities. Indirect beneficiaries will also pay indirectly, such as through higher prices for goods that reflect the tolls trucks had to pay to navigate a toll road (p. 17). This theory is admittedly based on the economics of choice rather than the economics of externalities (p. 251), but it must be observed that negative externalities are not often paid for by flow-through effects or by donors. More often, negative externalities are born by the public at large, which is an underlying theory as to why provision of some goods and services are paid for by the public through taxes.
The previous observation leads to a major question unaddressed throughout this book: when should we substitute nonprofit organizations for government? Should all fee-for-service tasks be handled by nonprofits rather than government? What about negative externalities? What are the exceptions? Bryce’s position that the nature of fees-for-service situations makes them prime for nonprofit provision rather than government certainly adds to the discussion about which structures best work for different tasks, but it does not engage more than that. While this may not have been the main purpose of this book, more exploration into the nature of specific tasks, and how those tasks determine whether nonprofit or government provision would be better, would have been helpful.
Frameworks such as Williamson’s (1975) transaction cost economics and its discussion of hierarchy versus market for organizing tasks, as well as the literatures on privatization, contracting, and collaboration provide suggestions for determining the optimal sectors and structures for shouldering certain tasks in society. For example, Kelman (2002) suggests conditions under which contracting out is more appropriate than direct government provision: 1) The more precisely a task or result can be specified in advance; 2) The more performance can be evaluated after the fact; 3) The more competition there is among potential providers; 4) The less the activity is core to the agency’s mission; 5) The more the government faces surges and ebbs in demand for the product or service; 6) The more private contractors have an easier time hiring people with skills the government needs; and 7) The more there are economies of scale in production. (p. 305-308)
The collaboration and network literature also has some discussion about which inter- or extra-organizational structures work for different public tasks (see Bryson et al., 2015; Provan & Kenis, 2008). Simo and Bies (2007) show that extreme conditions during natural disasters necessitate collaborations. Similarly, Provan and Lemaire (2012) suggest that bureaucracy or hierarchy is best when the task is stable and routine but not appropriate for non-routine tasks. Raab and Milward (2003) determine that when the nature of the task falls outside the boundaries or mandate of any one organization, such as with terrorism, then inter-organizational networks are appropriate. In reviewing the existing collaboration literature, Bryson et al. (2015) note that scholarship has not pursued this issue systematically, suggesting that there is an opportunity for scholars to make contributions regarding the optimal sectoral, legal, and organizational structures for the provision of public tasks. Engaging with these fledgling lines of inquiry and their prescriptions, or writing new prescriptions specific to fee-for-service situations, would have given the reader a resource in a space badly in need of more.
