Lester M. Salamon, the Johns Hopkins University professor who died last week at the age of 78, was one of the world’s most prolific and influential scholars of nonprofit organizations. He wrote or edited dozens of books, reports, and articles about the field, playing a central role in the growth of the study of philanthropy and nonprofits in universities and think tanks in the United States and abroad.
His many honors included a distinguished lifetime achievement award from the Association for Research on Nonprofit Organizations and Voluntary Action, the field’s principal scholarly group.
Salamon was a political progressive, a former official of the Carter administration, and an admirer of Europe’s social democracies. But unlike some on the left today, he also believed that partnerships between government and the nonprofit world played valuable roles in such societies.
Salamon’s most enduring legacy may have been puncturing what he once described in a debate with me as the “Tocquevillian myth” of philanthropy. By that he meant the view associated with Alexis de Tocqueville that the nonprofit world consisted of a collection of organizations, sometimes called civil society, which were independent of both government and business and performed tasks that neither could undertake. Salamon’s research revealed a more complicated picture.
Although nonprofits are legally distinct from government, he showed that they depended heavily on government financial support. What’s more, many nonprofits, especially in health care and education, operated more like businesses, charging fees for their services to those who wanted or needed them. Indeed, his studies showed that earned income made up the largest share of nonprofit revenues in the United States, followed by government aid, with giving and volunteering playing smaller roles.
Salamon and his associates amassed copious amounts of data to support these conclusions. Perhaps his most impressive effort involved assembling teams to compile and analyze often hard-to-find information about nonprofits in what eventually grew to 45 nations. The result punctured another “Tocquevillian myth”— that the United States was exceptional in the size of its nonprofit field. In fact, the Netherlands had the largest number of nonprofit organizations. Like other so-called welfare states common in European counties, it relied on nonprofits to deliver government-financed services.
‘An Endangered Sector’
When Salamon began studying the nonprofit world 40 years ago, most observers worried that government and business were steadily encroaching on the field. Waldemar Nielsen, the most important writer on philanthropy at the time, described “an endangered sector” in which increased fees, government funding, and less giving diminished nonprofits’ role in society. Salamon’s research, however, showed that government was not a threat to the nonprofit field, but an essential partner.
He argued this most forcibly in a series of studies he directed during the 1980s. When Ronald Reagan was elected president, the administration embarked on an effort to trim what budget director David Stockman called “the social welfare pork barrel.” To pick up the slack, the White House looked to the nation’s charities.
In response, Salamon, then at the Urban Institute, mobilized a team of scholars to examine how the proposed cutbacks in federal social spending would affect nonprofits. They found that the organizations the Reagan administration expected to take over from government would likely face sizable reductions in their own revenues. Even worse, because of proposed cuts in government programs that helped the needy directly, demand for the services nonprofits provided was likely to increase.
Ultimately, the Reagan administration was unable to cut social spending as much as it wanted. A task force it created to identify ways of stimulating “private sector initiatives” wound up producing few recommendations. Thanks to the Tax Reform Act of 1986, which decreased taxes on the wealthy, a resurgent economy, and the popularity of Reagan’s self-help philosophy, giving began to grow after a decade of stagnation.
In a mid-1990s study, Salamon and two co-authors wrote that policy shifts during the Reagan era “increased the pressure on nonprofit organizations to expand their services while reducing the resources they had available to do so, at least outside the health field.” While acknowledging the increase in private giving, they concluded it was insufficient to make up for the cutbacks “although it did manage to offset the direct nonprofit revenue losses by the latter part of the period.”
Filling a Knowledge Gap
Some people, including me, occasionally took issue with Salamon’s findings. For example, by excluding the health field, his research omitted the massive increase underway in federal spending for Medicare and Medicaid, which assisted both nonprofit organizations and those they served. But no one could deny that Salamon’s work filled an important gap in knowledge about the nonprofit field. As he wrote, it demonstrated that while government and philanthropy “are in some sense substitutes for each other, they are also, to an important extent, partners in responding to public needs.”
Salamon thought there were good reasons for this relationship. Delivering government programs through nonprofits, he felt, enabled them to add private dollars to public funds and kept them from becoming too rigid, bureaucratic, and cautious. On the other hand, government could correct what Salamon called “voluntary failure”— the likelihood that if they relied chiefly on donations, nonprofits would lack the resources they needed and would prioritize donor concerns over those of the public.
But he also recognized the problems with this relationship, including the challenges of coordinating with government entities and maintaining accountability. Even more important, he noted, was the potential loss of a degree of independence, which was why, theoretically, nonprofits were valuable partners.
Those who share Salamon’s political outlook increasingly question a reliance on private-public partnerships, arguing that they give too much power over what government does to business and philanthropy elites. Perhaps eventually, another scholar will take over where Salamon left off and examine such assertions with the attention to evidence, understanding of history, and breadth of vision that he displayed throughout his long and remarkable career.
