Government and nonprofit sector as one: The case of Municipal Special Corporations

• In Event: Examining Sectoral Boundaries

Abstract

One of the theories that frames the relationship between the nonprofit sector and the government defines it as complementary, supplementary or adversarial (Young, 2000). The author states that nonprofit organizations (NPOs) could work in any of these roles, but primarily supports the complementary one. This opinion was developed after decades of multiple groups having contrary opinions of the interaction of NPOs with the government and the discussion continues (Young & Casey, 2017). Government and NPOs complement each other; the government provides funding and tax incentives, which are the principal source of nonprofit income (Salamon, 1995; Young, 1999), and NPOs provide their knowledge to execute efficient services.

The government has the option of requesting the services of NPOs to complement their own. However, what happens when the government creates its own NPOs to provide services it is supposed to already offer? Puerto Rico's Autonomous Municipalities Act of 1991, repealed in 2020 by the Puerto Rico Municipal Code of 2020, empowers municipalities to authorize the creation of municipal special corporations (CEM, by its Spanish acronym). These private non-profit entities, with legal personality independent and separate from the municipality in which they are constituted, are created “to promote any municipal, state and federal activities, companies and programs, aimed at comprehensive development and that result in the general well-being of the inhabitants of the municipality through the growth and expansion of various areas, as well as the generation of electricity from renewable energy sources” (Municipal Code, 2020, Article 5.001). Although the separation of power, 2/3 of the CEMs board of directors are appointed by the Mayor and the municipality provide economic support.

Considering that some municipalities have CEMs, one could conjecture that they recognize that NPOs are more agile and efficient in providing social and economic well-being to their citizens. Also, it is difficult to determine if they have a complementary, supplementary or adversarial relationship with the municipalities. To explore these arguments, this research has the purpose of carrying out a case study through interviews with guiding questions to at least three CEMs of the remaining 11 out of 60 that have existed since 1991. There are certainly economic and social indicators of the municipalities where these CEMs are located. However, it is not possible to attribute the results of these indicators to them. It is for this reason that a case study methodology was selected to obtain in-depth knowledge of the CEMs contributions.

The guiding questions will stimulate dialogue about: (1) development goals and objectives; (2) social and economic well-being indicators; and (3) sustainability strategies. Socio-demographic data from the Census, the Municipal Wellbeing Index of the Puerto Rico Youth Development Institute, the Sustainable Economic Wellbeing Index, and the OECD Better Life Index will be used in the analysis. The findings should aim to establish if CEMs are more agile and efficient in providing social and economic well-being to their citizens. Also, to explore how the complementary, supplementary or adversarial relationship fits between CEMs and the government or if it has evolved.

References

Puerto Rico Municipal Code, Act Number 10 (2020). https://bvirtualogp.pr.gov/ogp/Bvirtual/leyesreferencia/PDF/107-2020.pdf

Salamon, L. M. (1995). Partners in public service: Government-Nonprofit relations in the modern welfare state. Baltimore: The John Hopkins University Press.

Salamon, L. M., Sokolowski, S. W. (2016). Beyond Nonprofits: Re-conceptualizing the Third Sector. Voluntas 27, 1515-1545

Young, D. (1999). Complementary, Supplementary, or adversarial? A theoretical and historical examination of nonprofit-government relations in the United States. In Boris, E.T. & Steuerle, C.E. (Eds.), Nonprofit and government: Collaboration and conflict. (pp. 32-67). Washington: The Urban Institute Press.

Young, D. (2000). Alternative models of government-nonprofit sector relations: Theoretical and international perspectives. Nonprofit and Voluntary Sector Quarterly. 29 (1), 149-172.

Young, D. & Casey, J. (2017). Complementary, Supplementary, or adversarial? Nonprofit-government relations. In Boris, E.T. & Steuerle, C.E. (Eds.), Nonprofit and government: Collaboration and conflict, 3rd ed, (pp. 37-70). Rowman and Littlefield

Author

• Luz Mairym Lopez-Rodriguez, University of Puerto Rico