An interdisciplinary investigation of neoliberalism in the third sector and its consequences for grassroots collective action and structural change

• In Event: Loyalty, Voice or Exit? Implications of New Public Management for the third sector

Abstract

Theoretical Concern

As a field, nonprofit scholars are invested in structural change, but emphasis on technical, managerial aspects of nonprofits overshadows this investment. We examine this marginalization against the backdrop of ongoing fascination with New Public Management (NPM) in particular and managerialism broadly. While NPM considers how nonprofit and civil society organizations behave internally in relation to resource allocation and efficiency (Broucker & De Wit, 2015), a wider lens illuminates how market-based logic sidetracks social change potential in the third sector (Albo & Fanelli, 2014). This paper generates action steps in response to the all-encompassing paradigm of neoliberal and managerialist nonprofit practice.

Literature and Context

Neoliberalism as an analytical tool for nonprofits has proven both useful and unsatisfying. It is used to investigate specific constraints on nonprofits (Ganz, Kay, & Spicer, 2018; Hasenfeld & Garrow, 2012). Neoliberalism narrows the scope and efficacy of education, human services, community organizing, philanthropy, and evaluation (Alexander & Martinez, 2021; Brady, Schoeneman, & Sawyer, 2014), but what it does to the third sector’s capacity for transformative action is poorly understood. Discipline-specific frameworks, e.g. NPM, illuminate fragments of neoliberalism and its tendencies within the sector. The effect of a fragmented approach is lack of coherent guidance for moving beyond the reductive neoliberal paradigm (Seda & Ismail, 2019). Neoliberal accountability mechanisms reinforce emphasis on short-term, individualized outcomes as opposed to accountability outward toward deeper, messier community needs that are inherently impossible to measure (Ebrahim, 2016).

Methodology

Through domestic and international case examples, as well as synthesis of primary and secondary sources from diverse disciplines including anthropology, political science, economics, and social work, we document neoliberal influence on the third sector both among nonprofit providers as well as within communities and populations directly affected by modern forms of exploitation and extraction.

Arguments

The paradigm of neoliberalism operates at three levels–ideology, practice, and theory–to impede directing of energy and resources toward broad-based collective action. At the theoretical level, market-based perspectives advance the notion of “gaps” being “filled” by nongovernmental entities. In the practice realm, competitive contracts and grants reinforce Darwinian thinking already favored in capitalist systems. This thinking also amounts to an ideology, whereby human value is assessed according to productivity and economic metrics. A second argument put forward is that neoliberalism should be understood as a foundational, first-order barrier to social and economic change rather than as an ancillary or context-specific consideration. With its extractive, market-based ontology informing education, science, and professional facets of the third sector, neoliberalism constitutes a threat to the essential purpose of nonprofit organizations. Third, pockets of uncoordinated critique are too easily co-opted within dominant systems. We argue that nonprofit stakeholders therefore should redirect social, intellectual, and financial resources toward alternative structures for effecting change.

Conclusions

Current dominant nonprofit and nongovernmental models are grounded in enlightenment- and market-based assumptions. Discourses and concepts associated with climate, labor, and racial justice movements are useful in transcending neoliberal disciplinary silos. Examples include degrowth, doughnut economics, mutual aid, basic income, grassroots unions, employee ownership, and ecopsychology.

References

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Brady, S., Schoeneman, A., & Sawyer, J. (2014). Critiquing and analyzing the effects of neoliberalism on community organizing: Implications and recommendations for
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Broucker, B., & De Wit, K. (2015). New public management in higher education. In: Huisman, J., de Boer, H., Dill, D.D., Souto-Otero, M. (eds) The Palgrave International Handbook of Higher Education Policy and Governance. Palgrave Macmillan, London. DOI: 10.1007/978-1-137-45617-5_4

Ebrahim, A. (2016). The Many Faces of Nonprofit Accountability. In The Jossey-Bass Handbook of Nonprofit Leadership and Management (pp. 102–123). John Wiley & Sons, Ltd. https://doi.org/10.1002/9781119176558.ch4

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Seda, A. & Ismail, M. (2019). Challenges facing social entrepreneurship: The implications for government policy in Egypt. The Review of Economics and Political Science, 5(2). Retrieved from https://www.emerald.com/insight/content/doi/10.1108/REPS-03-2019-0036/full/html

Authors

• Andrew Charles Schoeneman, University of Richmond

• Bob Spires, University of Richmond