Indiana Local Government Officials' Contracting with Nonprofits

Abstract

While most local governments provide services directly, many also routinely contract with other institutions to provide services to their constituents—even for the same service the local government provided. Local government officials (LGOs) have limited capacity to provide such services as mental health, substance abuse prevention and treatment, emergency relief services, and free and low-cost health care. Moreover, revenue collected through local, state, and federal government funding usually cannot meet all service demands, In addition to lacking resources, LGOs may also lack the capacity to meet particular community needs. In such cases, they may access the expertise and capacity of nonprofits and other institutions to provide these essential services. Almost one-fourth of Indiana nonprofits receive some form of government funding, accounting for nearly two-fifths of their revenues. Based on a study prepared by Dr. Kirsten Grønbjerg and graduate student Eric Schmidt, of the O’Neill School of Public and Environmental Affairs, with data collected by PPI on behalf of the Indiana Advisory Commission on Intergovernmental Relations (IACIR), this policy brief updates data from a previous analysis of the extent to which LGOs contract with nonprofits as part of a series on nonprofit-government relations in Indiana from the Indiana Nonprofits Project: Scope and Community Dimensions. The brief examines the services arrangements LGOs used to provide a range of specialized services and how services have changed over time. While focusing primarily on service arrangements with nonprofits, the authors also compare them with contracts awarded to other government units and private business firms. The brief highlights the need for LGOs to have the skills and capacity to coordinate different service arrangements as well as manage services provided directly.