Reform of Public Services, Enlightenment In the Development of America's Non-Profit Organizations (Part 1)

Following the renewed understanding and repositioning of the government’s social management functions, its monopoly over the area of public service is inevitably shrinking day by day. With the competitive nature of the domain constantly expanding, the government is no longer the only provider of public services.

The provincial plenary session raised a new perspective on social organizations — that government must encourage the purchase of social security services, turning it from an “omnipotent government” into a “limited government.” This author thinks that our province should learn from the U.S. regarding the history and transformation of its social organizations.

Around the 1980s, because of economic decline, financial crisis and general public dissatisfaction with government services, a wave of administrative reform centered around “re-inventing government” arose in the U.S., reestablishing the role of the government. It handed over some of the public management and service responsibilities previously handled by the government to non-profit organizations. At the most basic level, the government realized a fundamental transformation of its governance, raising the government’s management capability and establishing a civil society in which citizens are the main agent of social management.

After a long period of effort, today the government, for-profits (enterprises) and non-profit organizations have become the three main players on the American stage. For-profit organizations are the main financial generator; non-profit organizations work mainly on social services and management. The government is in the middle of the two, standing on a higher level, advancing policy adjustments, formulating laws and providing financial backing, thus implementing macroscopic control and management. Non-profit organizations in particular have already become an important cornerstone of the American government’s administration and social management. This mode of governance and social management not only embodies the separation between government and enterprise, but also reflects the dual requirement of separation between the conduct of public affairs and government agencies.

The non-profit sector is an important economic force in the U.S., whose total assets reach 2 trillion U.S. dollars with an annual income of $1 trillion, making up about 11 percent of the population’s total income. Around 30 percent of their funds come from the government on the basis of merit, which is the equivalent to our government’s purchase of social services. Since their economic might is so strong, non-profit organizations have a particularly important function in the U.S. They provide the government, society and individuals with every kind of service, especially when it comes to breaking new ground in providing community services, the establishment of service systems, setting up organizations and serving the roles of management and promotion.

Take the model organization New York Community Trust, for example. It has $1.75 billion in assets; in one year it can get $1.45 million in donations, making it America’s largest community fund organization. Donors use Community Trust to pass their property to community fund organizations. New York Community Trust manages about 1,400 individual trust funds; these are divided up for use on education, art, sanitation, medicine, environmental protection and other such public interest projects. Non-profit organizations’ undertaking of social public services is a powerful driving force of society’s economic development.

Development of non-profit organizations is pivotal for the establishment of a limited government. In American society, government management is in a relatively detached state, mainly implementing macroscopic management, formulating economic social development policy and legislation for public affairs activities, carrying out financial support and investment and undertaking the supervision and assessment of non-profit organizations. Moreover, the content of concrete social public services and the launch of programs are both largely handled by non-profit organizations. Non-profit organizations are independent of the government’s social intermediary organizations and are not subordinate to the government, nor can the government interfere in their activities. Thus, they can independently represent the interests of all market players, communicating and negotiating with the government, thereby influencing government policy decisions.

From the success of the U.S. government’s reform and society’s innovation in public management, we can see that following the renewed understanding and repositioning of the government’s social management function, its monopoly over the area of public service is inevitably shrinking every day. With the competitive nature of the domain constantly expanding, the government is no longer the only provider of public services; cooperation between the government and the citizens grows greater day by day. One of the main reasons for this is that the services and affairs previously handled by the government are gradually being provided by enterprises and non-profit organizations. Thus, there is a direct interactive relationship between the transformation of government’s function, innovation of the social management system and development of the non-profit domain: On one hand, development of the non-profit sector is an important backdrop and driving force for the innovation of the social management system. On the other hand, innovation of the social management system was a major condition of and favorable circumstance for non-profit sector development.

Guangdong is situated at the front line of reform and opening. Following the development of the market economy, non-profit organizations have made considerable progress; included among these are over 2,000 chambers of commerce and business associations. Every level of government has also established charities within the Ministry of Civil Affairs. As the number of such non-profit organizations has visibly increased, their impact on society grows stronger each day and the areas in which they function are ever expanding. However, compared to the U.S. and other developed countries, the disparity is clear. This can mainly be seen by the following: First, the level of their development is rather low and insufficient. Secondly, their capabilities are considerably limited. The function of our country’s non-profit organizations is merely to assist the government in supervising and managing society. In reality, they are just an accessory to the government, a sort of nerve ending. Although they provide the government, society and individuals certain services, the overall quality of these organizations is not high, so it is difficult for them to adapt to the transformation of government functions and the demands of the socialization of public management. It is also hard for them to truly bear the burden of these responsibilities that are moving away from government; considerable numbers of these organizations are serving nothing more than a networking role.

Thirdly, the nature of government enterprise is rather serious. A fairly large part of our country’s social intermediary organizations rely on the government; their method of operation still shows shades of a planned economy. Some intermediary organizations use government resources to cover service costs, forming a new monopoly organization. The actions of some social intermediary organizations are not vast, but they are lacking in legal restrictions and external social control, which is thus damaging to their own social image. The causes that lead to this gap are many-sided, but the most basic reason is that the development of our country’s market economy is not yet mature. Government organizational reform and the transformation of its functions are lagging behind. A society based on rule of law is far from taking shape and the establishment of civil society has just been set in motion.

Therefore, if we want to develop and build the path for non-profit organizations and expand their space, it is of vital importance that we borrow from the experiences of Western nations in “re-inventing government” and integrate our country’s government reform with social constructionism and the reality of a harmonious society, quickly advancing the transformation of government functions and changing the method of social management.

The author is Vice President of the Guangdong Federation of Industry.