ABSTRACT
This entry addresses the issues associated with growth in government contracting for human services. Interest in the contracting relationship between governments and nonprofit organizations has increased since the 1980s. Political pressure to reduce the size of government has led states and municipalities to become more dependent on nonprofits to deliver public human services. This trend has been reinforced by deinstitutionalization of disadvantaged populations. Nonprofit organizations have stepped forward to design and deliver community-based services for the elderly, the mentally ill, abused and neglected children, and the developmentally and physically disabled. As a result, nonprofits have become increasingly dependent on government. Growth in the nonprofit sector and heavy reliance on tax-supported revenue have led to increased scrutiny and concerns about the management capacity of nonprofit agencies, particularly in human services where executive directors are typically promoted from line positions and lack training in finance and management. Therefore, the trend toward contracting raises important challenges for governments. Public officials have less control over contracted services than they do over directly produced services. This entry further discusses the need for government capacity to monitor the contracting relationship and to ensure accountability for public resources.
