Public-private partnerships are formal arrangements between a public entity (a government organization at the federal, state, or local level) and a private entity (a nonprofit or for-profit) organization. Through this agreement, the government can support resources for the private organization to provide a service to the community.
Public entities benefit from a public-private partnership economically, administratively, and politically. Economically, it can be less expensive for the government to contract out services, avoiding costs for employees and allowing tax-payer money to be spent in other areas. Administratively, public organizations are more tied to checks and balances within the government infrastructure. By contracting out services through private organizations, public entities can avoid administrative overhead. Politically, through these partnerships, government entities can address problems in the community that it might not be able to address without financial assistance or additional manpower provided by the private organizations.
The nonprofit sector has historically bridged the gap between privatized, for-profit services and public, government-funded goods. In more recent history, the end of World War II increased the government financing of nonprofit organizations, strengthening public-private partnerships across the United States. Federal funding for nonprofit organizations increased through the end of the twentieth century, funding nonprofit programs for addiction treatment, mental health, construction of low-income housing, and work related programs such as job-training and child care for working, low-income families.
In the United States, two instances of public-private partnerships stimulating economic development include President Franklin Delano Roosevelt’s New Deal and President Lyndon B. Johnson’s Great Society. Following the Great Depression, the federal government created “the most thoroughgoing program of reform” the United States had yet to see, addressing market and industry failures that had in part led to the Depression. The New Deal created new agencies to administer a public-private partnership, or “government-by-contract,” (Aman) to provide services to the public that the government on its own could not. Similarly, President Johnson’s Great Society agenda emphasized the cooperation between government agencies and private actors to take on the war on poverty.
The evolution of these partnerships is evident through the U.S. Department of Housing and Urban Development (HUD). The New Deal created loan programs and provided federally funded loans to private developers to revive housing slums. President Johnson then used public-private partnerships to expand the government’s role in housing development by creating HUD to further develop housing programs.
In 2008, the Great Recession forced many state and local governments to cut budgets and reassess their ability to fund social services programs. This led to nonprofit organizations cutting programs, reducing salaries, and reducing their operations.
Importance and Ties to the Philanthropic Sector
Although the “private’ half of a public-private partnership can refer to both nonprofit or for profit entities, the nonprofit sector is uniquely able to focus on providing services over paying stakeholders. Nonprofit Organizations can utilize these formal partnerships to draw on resources from public entities. By working together, the organizations can create new community opportunities, or build upon existing resources, that might not be viewed as profitable by the for-profit sector. For example, nonprofit and public entities can partner in creating community parks that add an environmental and positive impact to the community that may be harder to justify for a for-profit organization.
Missoula spectrUM Discovery Area: Through a partnership between the Missoula Public Library, the Missoula Food Bank, and the University of Montana, the community benefits from spectrUM, a dynamic learning center. In one location, individuals can receive free meals and access the public library with support from the University. The various partners play off their strengths to provide benefits for children of Missoula.
Arizona’s Be Connected Veterans’ Services Program: The Be Connected program helps provide mental health services to Veterans and Military Families across the state of Arizona. Through a partnership with a number of community organizations, the state Department of Veterans’ Services is able to fund programs to provide more sufficient resources to veterans.
- What are examples of public-private partnerships in your community?
- What do nonprofit organizations gain from a public-private partnership?
- What do government entities gain from a public-private partnership?
- How do people in the community benefit from public-private partnerships?
Bibliography and Internet Resources
- Aman, Alfred C. and Dugan, Joseph C., "The Human Side of Public-Private Partnerships: From New Deal Regulation to Administrative Law Management" (2017). Articles by Maurer Faculty. 2550. https://www.repository.law.indiana.edu/facpub/2550
- Anheier, Helmut K. Nonprofit Organizations: Theory, Management, Policy. Routledge, 2014.
- “Be Connected: Help & Support for Arizona Veterans, Military, and Families.” Be Connected: Help & Support for Arizona Veterans, Military, and Families, beconnectedaz.org/.
- CARLTON, PAM1. “Together We’re Stronger: Helping Missoula’s Families All Under One Roof.” Children & Libraries: The Journal of the Association for Library Service to Children, vol. 16, no. 3, Fall 2018, pp. 24–25. EBSCOhost, doi:10.5860/cal.16.3.24..
- The Evolution of HUD's Public-Private Partnerships: A HUD 50th Anniversary Publication. The Evolution of HUD's Public-Private Partnerships: A HUD 50th Anniversary Publication, U.S. Department of Housing and Urban Development, 2015.
- Peet, Lisa. “360° Fund Raising.” Library Journal, vol. 141, no. 8, May 2016, pp. 32–34. EBSCOhost, search.ebscohost.com/login.aspx?direct=true&db=eue&AN=114996538&site=eds-live.
- Provan, Keith G. [email protected], et al. “The Use of Network Analysis to Strengthen Community Partnerships.” Public Administration Review, vol. 65, no. 5, Sept. 2005, pp. 603–613. EBSCOhost, doi:10.1111/j.1540-6210.2005.00487.x.