The Safety Net's Two Parts: Exploring the Association Between Income Transfer Programs and Nonprofit Human Services

• In Event: Inequality, Poverty, and Mobility Section Roundtables
  In Refereed Roundtable (60 minute): 14. Welfare

Abstract

The U.S. safety net has two main parts: government personal income transfers and nonprofit human services. This study asks whether these two parts of the safety net underserve the same places, or whether nonprofits fill in where government is weak. Using county-level data from the Bureau of Economic Analysis, the IRS-990 NCCS Core File, and the American Community Survey, we examine how personal income transfer spending is associated with nonprofit human services expenditures across more than 3,000 U.S. counties. Without controls, the two are negatively associated, which would suggest that nonprofits step in where government transfers are low. But county economic characteristics confound this: counties with high poverty rates receive more transfers because more residents qualify, and also have weaker nonprofit sectors. Once county characteristics are accounted for, the relationship flips. Counties with higher per capita transfer spending also have higher per capita nonprofit human services expenditures. We find that the two parts of the U.S. safety net exhibit a pattern of double disadvantage. They rise and fall together rather than substituting for one another.

Authors

• Shoshana Shapiro, University of Wisconsin-Madison

• Scott W. Allard, University of Washington