Part One
Political Interests and Political Symbolism
1
The Political Language of the Nonprofit Sector1
Robert R. Alford
Murray Edelman has pursued a single major theme through several books: the way political language is used to mystify ordinary people about the actual workings of our political economy, and how the rhetoric of political language contradicts the reality of who benefits. Edelman's writings are eloquent testimony to a continuing tradition of quiet debunking of the celebration of American democracy.2
My argument is based upon a pervasive perspective in Edelman's work, which is developed most explicitly in his 1988 book: Constructing the Political Spectacle. The basic premise is that political language constructs both political subjects (such as leaders or enemies) and political objects (such as social problems or news). But, unlike some contemporary poststructural analysts of discourse, he does not reduce all political language to text and to interpretation. Nor does he reduce language to ideology and mere rationalization of interests. As he says, "ideology and material interests are part of the same transaction."3 What this means more concretely is that there is no such "thing" as a political subject or object. "The language that interprets objects and actions also constitutes the subject."4 Such an argument undermines the "premise, itself constructed very largely by the term leader,' that identifiable officials are originators of coherent courses of action."5 That premise is found in much discourse which blames or praises individuals such as Presidents Bush or Yeltsin for the origins or outcome of political events.
More generally, accounts of political issues, problems, crises, threats and leaders now become devices for creating disparate assumptions and beliefs about the social and political world rather than factual statements."6 Consequently, "the political entities that are most influential upon public consciousness and action, then, are fetishes: creations of observers that dominate and mystify their creators."7
This paper is a critique of the political language used to distinguish the "nonprofit" sector from the "public" and "private" sectors as a "third" or "independent" sector, or as composed of "voluntary associations."8 The political entity which "dominates and mystifies its creators" is the "nonprofit sector." Substitution of a different language will show how the conventional categories mystify the social world, although they may have positive consequences for some economic and political interests.9
The Political Language of the Nonprofit Sector
The tripartite distinction between public, private and nonprofit is highly problematic, even for scholars committed to the goals identified with voluntarism and independence. Paul DiMaggio, discussing the ambiguity of the tripartite distinction, has suggested that legal incorporation as a nonprofit entity be the only criterion used for classification, leaving all issues of purposes, goals, values or intentions of the founders, participants, beneficiaries and constituents to be either independent or dependent variables. This is a legitimate procedure, if the empirical criteria are not overlaid with political symbolism.10
Other writers make the same point. Stuart Langton, in an essay on "developing nonprofit theory," says that there is still no commonly accepted way to refer to the types of institutions which are the foci of the field . . (whether the "institutional entities" are to be called voluntary, nonprofit, or third, or independent). Furthermore, "we do not have adequate language to describe the actual roles and preferred relationships between nonprofit and other institutions... Above all, this calls into question the most essential concept that has been used to describe and distinguish nonprofit institutionsāthe metaphor of sectors."11 And Lester Salamon says in the same volume that
our failure to perceive the reality of extensive government-nonprofit ties is ... in substantial part a product of the limitations of the conceptual lenses through which this reality is being perceived. Both the theory of the 'welfare state' and the theory of the voluntary sector ... have been at fault. Neither leaves much conceptual room for a flourishing public-private partnership.12
Robert Wuthnow's introductory essay, in yet another volume of essays on the theme of "between state and market," is a good example of how easy it is to slide from a general concern with voluntary associations as examples of non-state, non-market organizations with Tocquevillean democratic functions, to the nonprofit sector as the embodiment of all of the positive functions of voluntary associations. Wuthnow distinguishes between "state," "market" and "voluntary" sectors, but acknowledges that the line between state and voluntary sectors is often "blurred" because of "cooperative programs between the two, government chartering of voluntary associations, and governmental financing." Moreover, the "boundary between voluntary and market sectors is sometimes vague as well, especially in instances of complex organizational schemes that bring for-profit and nonprofit activities under the same administrative umbrella."13 Similarly, "government agencies concerned with social welfare programs have sometimes taken over the activities once performed by voluntary organizations ..." and "market principles" have been extended into the "service sector."14
The mystification introduced by using the tripartite distinction while acknowledging overlap and "hybridization" is indicated by an observation by economist Burton Weisbrod regarding changes since 1980: "Supporters of both the nonprofits and the proprietary organizations agree that cutbacks in federal funding (beginning around 1980) have led an increasing number of nonprofits to seek new revenue by engaging in profit-making activities; as a result, the two forms of institutions have come into growing conflict."15 If nonprofit organizations (NPOs) are "nonstate" and "nonprivate," following the image of support by voluntary activity and funding, what are they doing being funded by the state and, worse, engaged in profit-making? Surely something is wrong with these categories, if used as more than legal descriptions.
Another article by two scholars of public administration recognizes the interaction between the nonprofit sector, the state, and capitalāparticularly changes taking place toward "increased government dependency and commercialization. As nonprofits increasingly resort to the traditional revenue sources of the public sector (grants) and the for-profit sector (fees for services), they tend to mirror them."16
A recent analysis by British political scientist Alan Ware provides a comprehensive treatment of these issues.17 The book's very title, Between Profit and State, and the subtitle "intermediate organizations" makes the fundamental assumption, also stated explicitly by Weisbrod, that "three major forms of institutions are available to every society: proprietary, governmental, and nonprofit."18 Ware is concerned with the "boundaries between these organizations and the liberal democratic state, on the one hand, and the market system, on the other."19 He acknowledges immediately that "the boundaries with the market are difficult to define, and many organizations that pass as IOs are partly or wholly, commercial enterprises... [and] similarly, the boundaries with the state are often imprecise."20
For descriptive purposes it may be adequate to call such entities "hybrid" if they combine nonprofit and profit components. Ware cites the example of Roanoke Memorial Hospital in Virginia which owns a collection agency, a warehouse, a conference center, a motel, and the Roanoke Athletic Club. And Voluntary Hospitals of America is an example of such a "complex intertwining of for-profit and non-profit concerns ... that, while the legal status of each individual organization is necessarily either for-profit or non-profit, it is much more difficult to classify the entire complex as being one or the other."21
Ware is finally critical of the assumption that there is in fact a relatively homogeneous "third" (or voluntary, or independent, or nonprofit) sector. Although at the "core" there may be some organizations which exhibit the prototypical qualities of responsiveness to social needs, volunteerism, and participation, "it is far from evident that the 'third sector' is not merely an amalgamation of disparate organizations."22 But, despite this criticism of the core concept of a "third" or "independent" sector, Ware uses phrases which imply an arms-length relationship between nonprofits and the other two institutional forms. Chapter 7, for example, deals with how the "state ... has sought to regulate the activities of these organizations."23 He then lists "seven purposes the liberal democratic state might have when introducing and reevaluating mechanisms for regulation,"24 as if "the state" was an entity which could have rational purposes and implement them through laws and policies. Such a usage can be subjected to the critique that Murray Edelman makes of such terms as "leadership" or "social problem."
Jon van Til's "map" of the third sector is a good example of an analysis which uses the conventional distinctions for descriptive purposes, but overlays them with the ideological categories associated with the logic of democracy. The subtitleā"voluntarism"āand the view in the introduction that the nonprofit sector is equivalent to the "independent" or "voluntary" or "third" sector indicates his position. Van Til assumes that there are "three separate institutional worlds": "business," "government," and the third (or voluntary or independent or nonprofit) sector. Van Til says that his book "aims to explore the interrelationship of the three sectors" as if they are separate institutions related to each other in various ways. This is legitimate if one is investigating the empirical correlateĀ» of legal status, but too often such statements are coupled with inferences which presume the "independence" of the "sector."25
The multiple and conflicting interests at stake in the formation and operation of NPOs is indicated by the extent of legal battle over their role and the accusations of "corruption" and "abuse," a sure sign of contradictory roles. For the IRS, "nonprofits are an endless source of litigation..."26 In 1985, nonprofits were the subject of "six cases before the Supreme Court and sixteen before the United States Court of Appeals." And Weisbrod gives numerous examples of "the potential for utilizing nonprofits as for-profits in disguise."27 Using economists' language, he notes that the "'currency' of nonprofit trustworthiness" is "debased." Furthermore, "the information required to detect abuses is itself costly."28
To summarize, comprehensive reviews of the nonprofit literature simultaneously accept the legal distinction between "public," "private," and "nonprofit" organizations as important for empirical and descriptive purposes, but question the "independent," "intermediate," "voluntary" and "third sector" character of NPOs.29 My argument accepts both aspects of this literature as important, and asks: what are the symbolic politics associated with the multiple linguistic images of "nonprofit"?
The Institutional Logics of Capital, State and Democracy
My basic point is a simple one, but my theoretical standpoint requires brief elaboration. The societal uses of NPOs are not fully understood if only the legal status of "public," "private," and "nonprofit" is used to describe these organizations. Many legally NPOs are neither voluntary, independent, intermediate, nor a "third" sector, and none of these labels follow logically or inevitably from their legal status. These symbols are drawn from the logic of democracy, but conceal the links of some "nonprofits" to the state and capital.
In this paper I am dealing with institutions which function within the multiple constraints of what Cohen and Rogers call "capitalist democracy."30 In such societies, three sets of institutional arrangements have both interdependent and contradictory relations: capitalism, the state and democracy. Each set of institutions is shaped and penetrated by the others; each is both necessary for and undermines the other's survival.31
Capitalism is a short-hand word for the fundamental social relations which constitute the rights of "ownership," "accumulation," "hiring of labor," "investment," "buying and selling." Those words refer to powers and privileges enforced by the state, but they exist independently of the state. The structural interests of capital are embodied in specific organizational formsābanks, firms, corporations, trustsāand have the power (under some legal and political conditions) to change those forms.32
If one's categories of analysis focus only on economic organizations and do not recognize the underlying structural interests which control their existence and forms, one cannot understand such innovations as junk bonds, leveraged buyouts, and the capacity of corporations to drain off the resources of others (as has recently happened with Texas Air, Eastern Air Lines, and many savings and loan associations). Such actions were neither recognized nor sanctioned by the state in advance, but became "legal" because they were not successfully challenged in the courts or the political arena. Under current political circumstances, the symbols associated with the logic of capitalāprivatization, competition, social choice, efficiency-enjoy considerable power.
The state is a collection of organizationsāthe Presidency, Congress, courts, operating agencies such as the FAA, CAA, Department of Agricultureāwhich oper...