Is Government Policy a Barrier or Facilitator to the Work of Place-Based Community-led Nonprofits?

1 Introduction

Over the last few decades, relationships between the non-profit sector and government policy have become increasingly understood (Bassi 2023). Many of the actions of nonprofits, of their management and trustees, are enabled or constrained by legislative requirements specific to where they operate, and nonprofits regularly advocate for government support, often in the form of funding, to further their social mission and local impact (Fyall 2016). It has therefore become increasingly axiomatic to state that it is “impossible to understand the formation, operation, and management of nonprofits without a commensurate understanding of the public policy context they inhabit” (Vaughan and Arsneault 2013: 2). While international cross-comparative studies of nonprofit organizations exist – indeed was the focus of the seminal Johns Hopkins Comparative Nonprofit Sector Project^[1] – studies that adopt a granular “street level” perspective (viz. Lipsky 1980) of the direct interactions between nonprofits and their ‘clients’ – on whether (and how) the work of government supports or inhibits such work – are still relatively scarce, particularly outside of the United States (de Morais Holanda, Kim, and Appe 2023). Empirical studies which draw upon data from nonprofits across different policy jurisdictions from such a granular perspective, especially in relation to the post-COVID environment, are rarer still (although see Rees et al. 2023).

This paper focuses on the notion of policy context, extending knowledge of how and why it matters, and how policy inhibits or supports the work of nonprofits engaging in place-based activities focused on improving the health and wellbeing of their immediate communities. For the purposes of this paper, we define policy broadly as government action, including what policymakers say they are going to do, as well as what they actually do. We are concerned with both elected and unelected policymakers, as well as the individuals, groups and organizations that help influence and deliver policy outcomes, including at the ‘street level’ (Cairney 2019). Thus ‘policy context’ is understood as the ‘complex environment’ in which such government action plays out, particularly as a result of interactions between stakeholders “where decisions about policies are discussed and, most importantly, where they are implemented” (Echt 2017). Our study is part of a larger project called Common Health Assets,^[2] focusing on the role of local ‘community-led organizations’^[3] and their health and wellbeing impacts. In this project (see Baker et al. 2023) realist evaluation (Pawson and Tilley 1997) has been adopted. Over the last decade or so realist evaluation method has become increasingly common, especially in public health research, to assess particularly complex forms of ‘intervention’ (Craig et al. 2019; Skivington et al. 2021). However, it is still far from commonplace in policy research. We can conceptualize nonprofits, and the activities they deliver, as highly complex forms of ‘intervention’ since they are dependent on interactions between many component parts, both internal and external to the organization (Roy et al. 2014), operate in open, rather than closed, systems, and regularly involve a variety of feedback loops. Moreover, complexity is also a key property of the community context (or system) in which the nonprofit is embedded (viz Hawe 2015).

This study constitutes an analysis of the issues viewed from the ‘ground up’ in organisations in various parts of the UK to feed into a realist understanding of context and the ‘contextual mechanisms’ at work (see Porter 2015). We did not undertake a comparison of the non-profit experience in three of the devolved nations of the UK; it was not a systematic comparative investigation. We focus attention on nonprofits working in so-called ‘deprived’ communities (according to indices of multiple deprivation) with a particular focus on place-based community-led nonprofits working on improving community health and wellbeing, based in England, Scotland, and Northern Ireland. Many aspects of policy that impinge upon nonprofits are devolved from Westminster to the parliaments in Edinburgh and Belfast respectively, and there is evidence of policy divergence in a significant number of areas (Keating et al. 2003; MacKinnon 2015), including in relation to the COVID response (Acheson et al. 2022).

We were guided by the following research questions: (1) How does policy act as a barrier or facilitator to the work of nonprofits? and (2) In what ways do different policy contexts influence the work of nonprofit organizations, if at all? Our paper is organized as follows: after a discussion of the relevant background literature, we turn attention to the methods that guided the study, including our analytical processes. We then discuss the findings in the context of extant literature, before reflecting on our contributions, both from the perspective of scholarship, and for policymakers. First of all, however, we consider: why does government policy matter to the work of nonprofits? And what do we know about how policy context can positively or negatively influence their work?

2 Background: Why Does Policy Matter to the Work of Nonprofits?

The groundbreaking work of Lester Salamon and many others since has shown that there is an ‘interdependence’ between nonprofits and government (Salamon 1995). Contrary to a widespread belief that with the development and scaling up of modern welfare states the voluntary and community sectors would be ‘crowded out’ and shrink in size to accommodate, in fact the sector has grown in size and importance commensurately (Salamon and Anheier 1996; Salamon and Toepler 2015). The state not only makes extensive use of the nonprofit sector to deliver services, but also finances a great deal of nonprofit activities (Salamon 1995). However, as Shafiq, Albrecht, and LeRoux (2023) has recently pointed out, the vast majority of work that has utilized Salamon’s theory of interdependence has depended upon government data on partnerships between nonprofits and the state, rather than data from the nonprofits themselves. These data also tend to be at a significantly higher level of abstraction than the ‘street level’ perspective of direct nonprofit and client interactions we adopt in this study.

We acknowledge that there is a voluminous literature on various forms of partnership working between nonprofits and the state (Bode and Brandsen 2014; Zimmer 2010) including a recent focus on collaborative forms of governance (Ansell and Gash 2008) and – most relevant to this study – the role of nonprofits within those (Brandsen and Johnston 2018; Calò et al. 2024). The literature on ‘co-production’ processes that involve both users and public sector professionals in the design and delivery of public services (Nabatchi, Sancino, and Sicilia 2017) tells us that close and effective working relationships between nonprofits and policymakers can result in positive outcomes for communities (Bovaird 2007; Brandsen and Pestoff 2006). However, there is not only considerable ambiguity and contestation on what constitutes ‘co-production’ (Nabatchi, Sancino, and Sicilia 2017) but too close a relationship between government and nonprofits can potentially lead to isomorphic tendencies (viz. DiMaggio and Powell 1983) where nonprofits can come to resemble – for better or for worse – government bodies (Leiter 2008; Rees, Taylor, and Damm 2024).

There is also an emerging literature on how the nonprofit sector worked to support communities during the COVID crisis and the nature of their relationships with government during that time. Rendall et al. (2022), for instance, drew upon Young’s (2006) important work which noted that relationships between the sector and the state were complementary, supplementary, and/or adversarial at various times throughout the crisis. Recently acknowledging the ‘adaptive entrepreneurial culture’ of many nonprofits during this time, Young (2023: 237) reminds us that:

The view of nonprofits as resilient institutions has been reinforced since by their performance in recent crises including the COVID pandemic beginning in 2020 and the financial crisis of 2008–2009, though not without exception or assurance that nonprofits would necessarily be resilient in future crises.

Cullingworth et al. (2024) expressly go further than Young’s schema, emphasizing a potential ‘co-pilot’ role of the nonprofit sector. In fact, during the COVID pandemic the state was almost completely dependent upon the nonprofit sector for a time, even for the provision of statutory services. We know that during crisis situations – during wars, as well as pandemics – (see Kabalo and Almog-Bar 2023) close working between the state and nonprofits is seen as vital, but without clear appreciation of the local contextual factors that facilitate or inhibit close working, it is difficult to understand what needs to be in place to allow this to happen. We recognize too that traditional theories of state-nonprofit relations are generally presented as relatively stable, or static. The COVID-19 pandemic upended this idea: Bennett et al. (2024) have argued for a more dynamic and nuanced understanding of state-nonprofit relations in their examination of smaller nonprofit human service organizations operating in England and Wales during the pandemic.

One important element of policy context relates to funding. Since at least the New Public Management reforms of the 1980s (Dunleavy and Hood 1994), the nonprofit sector has become increasingly central to the delivery of government programs, with a noticeable shift in recent times from grant funding to the state procuring goods and services from the nonprofit sector under contract. Nonprofits are increasingly expected to submit competitive tenders and, in many cases, vigorously compete with the private (for profit) sector for such work (Barraket, Keast, and Furneaux 2015; Roy et al. 2024). The implications, including unintended consequences, of introducing market behaviors into the nonprofit sector has concerned academics for some time. While evidence on whether government funding suppresses the important political advocacy role of nonprofits (for instance) is mixed at best (Chavesc, Stephens, and Galaskiewicz 2004), it is clear that the marketisation of the nonprofit sector (Alcock and Kendall 2011; Carmel and Harlock 2008; Dayson and Wells 2013) has had a transformational role on the sector as a whole (Evans, Richmond, and Shields 2005; McKay et al. 2015; Roy, Eikenberry, and Teasdale 2022). The closeness of the nonprofit sector to the state – its relative inability to ‘bite the hand that feeds it’ (Cullingworth et al. 2024) – has raised questions over the independence of the sector, potentially placing the important role of civil society to place checks on both government, and the market, at risk (Dart 2004; Egdell and Dutton 2017; Eikenberry and Kluver 2004).

Another contextual factor, and a key consideration for this study, is the policy contexts in which nonprofits operate. These landscapes can differ significantly across countries, regions, municipalities, and communities. As this study is focused on the UK and compares England, Northern Ireland and Scotland, several factors influence the political/policy landscape that are worthy of note. Despite the UK ostensibly being a ‘union’ of four different countries, the devolution arrangements are highly uneven and ‘asymmetrical’ (MacKinnon 2015) with different countries having different powers to varying degrees. While power is still highly concentrated in Westminster (Curtice 2006; Keating, Cairney, and Hepburn 2009); the constituent countries of the UK have less autonomy than most states in the US. Nevertheless, the devolution of powers that began in the late 1990s has created different policy landscapes for England, Wales, Northern Ireland and Scotland (Acheson et al. 2022; Alcock 2012; Chaney and Wincott 2014) and policy divergences occur quite regularly. In the devolved administrations, nonprofit leaders regularly talk of feeling comparatively close to government decision-makers, and thus better placed to influence policy. The shared borders between Northern Ireland/Republic of Ireland and England/Scotland complicate the policy landscapes further. These policy landscapes are complex and continually evolving. One other complex political aspect that emerged during our study and thus deserves mention, was the outcome of the Northern Ireland Assembly elections of 2022. This was the first occasion that a nationalist party (Sinn Féin) became the largest in Stormont, but during the period of our fieldwork there was no power-sharing arrangement and thus no sitting government in Northern Ireland. This was ostensibly due to a disagreement between parties over a post-Brexit trading issue. Northern Ireland was essentially run by civil servants until February 2024, when the impasse was broken, and the Northern Ireland Assembly was able to reconvene.

For additional insight into the contemporary policy landscapes across England, Northern Ireland, and Scotland (our study did not include Wales, which has its own Assembly), we constructed a framework of nonprofit-relevant policies in each jurisdiction (which is not exhaustive), which can be found online.^[4] We next turn attention to the methods employed during our study.

3 Methods

We had previously identified nonprofit organizations located in each of our study locations, namely Northern Ireland, Scotland, and England, who were willing to work with us for the three-year duration of the wider Common Health Assets project. For this phase of the research, we approached managers within each organization and conducted in-depth semi structured interviews (n = 12) and two mini focus groups involving four people each at their place of operations, thus we were able to draw upon comments from 20 individuals in total. Interviews varied in length from 34 min to 1 h 20 min in length, and our sample breakdown is shown at Table 1.

As such, this represents a form of ‘purposive’ sampling (Mason 1996) given that they were both willing to work with us, and that we were confident of rich, relevant data from all. As this was a multi-site project involving a range of different research partners, ethical approval was sought from the relevant ethics committee at each of the four universities involved at the start of the project. To expand our understanding of policies as they impact at ‘street-level’, the interview questions framed ‘policy’ in an open-ended manner in line with our broad definition set out above, allowing participants scope to reflect on the impact of policies at both a general and more specific level, as they apply to and are experienced within their area of practice. We focused on the experiences of relationships with policymakers, whether they had to adapt their delivery based upon changes in local or national policy, and the relationship – if any – between policy and funding. We recorded each interview ‘intelligent verbatim’ (see McMullin 2023) and imported the raw data into the computer-assisted qualitative data analysis program NVivo 12 (Bazeley and Jackson 2013) to help structure our coding and analysis.

After an initial round of open coding (viz. Saldaña 2013), we coded and organized our data thematically (Braun and Clarke 2006). We did not construct our themes a priori, nor purely inductively. Instead we undertook a form of abductive (Peirce 1932; Timmermans and Tavory 2012) inference, where explanations for findings are generated “by moving backward and forward among empirical data, research literature, and emergent theory” (Dey and Teasdale 2013: 255) thus allowing any unexpected or divergent results to emerge. This ‘emergent’ form of analysis has been presented according to the various themes we identified and structured around our research questions; our researchers generated an initial list of first-order codes from the dataset that had a reoccurring pattern, then searched for recurring patterns, linkages, categories, and subcategories within the first-order codes relating to each research question. The whole process continued in parallel with data collection until theoretical saturation occurred and no further themes emerged. Instances of disagreement were resolved through discussion, a process that continued until we had agreement and confidence in the theoretical validity of the emergent themes.

We next turn attention to our findings, organised into five main themes, namely: (i) Disconnect between policy and the realities of context; (ii) Sustainability and funding; (iii) Tensions between the pursuit of mission and alignment to government policies; (iv) Implications for policy innovation; and (v) Relationships between nonprofits and policymakers/commissioners.

4 Findings

5 Discussion

Our findings extend existing scholarly understanding of the engagement of nonprofits with policy in several ways. First, nonprofit leaders reflected upon policies from the perspective of what they saw as their organization’s core mission to serve the needs of a given community (however defined and located) and reflect its interests. The common attribute of policies that were seen by our research participants as facilitating their work were those perceived to be furthering their connection to, and work for, their communities. Nonprofit leaders spoke of the vital role of nonprofit organizations within communities and the need for policies and policymakers to understand community needs and highlighted the role of the nonprofit in facilitating this dialogue to take place. Similarly, those nonprofit managers who felt that they were trusted to influence policy development also tended to view it more positively facilitating their work; a good example being the trust and greater degrees of freedom that nonprofits seem to have been granted by policymakers and funders to respond quickly to local need and develop support for communities during the COVID-19 pandemic. Where nonprofits could readily align their work with policy objectives, they were better positioned to benefit from financial support. In terms of specific policy areas - nonprofit managers saw specific policy areas such as ‘social prescribing’ and ‘health and social care integration’ as positive policy developments they could influence directly, since their success critically relies upon the expertise and connections that nonprofits have with communities. That said, there is an argument that many nonprofits feel the need to align with government policy initiatives to survive, potentially at the risk of stifling local innovation, responsiveness, and effectiveness.

By the same token, nonprofit managers tended to define policies as barriers in instances where those policies failed to take account of the interests or needs of communities, at least as understood by them. Policies designed without consulting the nonprofit or the wider community they represent, or which take no account of local circumstances or the resources available to nonprofits to deliver outcomes required, were identified as barriers. Equally, the short-term nature of funding, as well as the non-availability of funding for the core work of some nonprofits, were seen as important obstacles to their work.

Second, our study shows that policies not directly related to nonprofits nonetheless can have a profound impact on their work and can be experienced as a facilitator or a barrier. Cuts to mental health budgets or social security benefits can result in rapid increases in need within communities and demands on nonprofits for social, emotional, and financial support. Public sector austerity has had a profound impact on the nonprofit sector in the UK. Although austerity bleeds through everything in terms of social inequalities, devolved governments and local authorities could, arguably, work more flexibly across public health and the nonprofit sector than they have been to date. They could work to deliver more stable, multi-year funding arrangements, for instance.

We saw evidence of the ability of government to be more flexible during the COVID crisis; indeed, another important finding was the substantively different relationship between government and nonprofits during the COVID-19 pandemic. Nonprofit organizations were recognized as partners who could deliver efficiently due to their agility and embeddedness in a given community (Bynner, McBride, and Weakley 2022). The level of cooperation and coordination between government and nonprofits increased substantially alongside the ability of the nonprofit sector to influence the way services were delivered (see also Kabalo and Almog-Bar 2023) and the bureaucracy involved in accessing funding was significantly relaxed for a time. Interestingly, respondents from across the three nations in question had similar experiences with government departments during this period, suggesting that during a period of crisis, the importance of working together across sectors to support the needs of communities should take precedence. This different relationship between government and nonprofit organizations was not just confined to the experience of respondents to this research, but was echoed in an evidence review (see Scottish Government 2022) which highlighted how lower bureaucratic burden and increased collaboration during the pandemic increased the flexibility and responsiveness of nonprofit organizations. This has also been recognized in the academic literature. Cullingworth et al. (2024: 104) explain that:

The sector’s ability to respond was, in part, enabled by the state, which made resources available, allowed organisations more agency in utilising resources and relaxed oversight measures. The state’s reliance on the sector highlights the importance of state funding, ensuring the sector is equipped to respond nimbly to emergencies. A secure third sector ensures that citizens have a safety net.

Although our respondents provided positive feedback about aspects of relationships between nonprofit organizations and government in Scotland, England, and Northern Ireland during the pandemic, the 2022 Scottish Government review expressed concerns about the ability of retaining such positive changes across sectors going forward. Furthermore, the disconnect or mismatch between policy expectations and outcomes, or policy rhetoric and practice reality – the so-called ‘implementation gap’ (Gunn 1978) – was highlighted by most respondents. This phenomenon in policy studies tries to explain failure in policy implementation, generally positioned as a fault of policy implementors rather than policymakers, and increasingly used as a ‘catch all’ concept for ineffective policy success and implementation at local or regional levels (Hudson, Hunter, and Peckham 2019). While disjuncture between policy rhetoric and reality where nonprofits are concerned is often pronounced (Mazzei and Roy 2017), the persistence of this ‘implementation gap’ idea perhaps indicates that governments across the UK do not always develop policies that are implementable in areas germane to nonprofits (such as those related to poverty, addressing social inclusion, and so on). It is clear from our study that a new way of doing politics and policymaking, which takes account of the highly complex, often hyper-localized, contexts in which many, if not most, nonprofits are embedded, is required.

Turning to our second question: In what ways do different policy contexts influence the work of nonprofit organizations, if at all? Our findings suggest that the devolved policy contexts did not always influence the day-to-day work of the non-profits across jurisdictions in clearly recognizable ways. An unexpected finding was that the overarching picture is exemplified by similarity across country level data rather than by difference. At first sight this is contrary to emerging evidence predicting that the policy divergence seen under devolution would have significant impacts on the day-to-day work of nonprofits (for example, as seen in the COVID response – see Acheson et al. 2022). But perhaps we overestimate the power of policy to shape the work of those nonprofits most rooted within their communities on a day-to-day level. And perhaps there is not enough policy divergence in the UK to see radically different practices at ‘street level’ between jurisdictions. Community-led nonprofits therefore seem to share consistent barriers and facilitators, regardless of policy divergence and jurisdiction, albeit we regularly see how successful partnerships between nonprofits and policymakers tend to be those that privilege the relational over the transactional, regardless of context (Lu 2015; but see also Brinkerhoff 2002).

Further evidence that some barriers and facilitators were independent of policy context was the similarity of issues in Northern Ireland with Scotland and England despite the lack of a stable working government there during the duration of this study. We emphasized from the outset of this paper the symbiotic nature of the relationship between government and the nonprofit sector, but nonprofits pragmatically get on with their ‘day job’ of supporting the communities they serve, in the absence of a sitting government (or at least politicians). Perhaps this is unsurprising given the roots of the nonprofit sector.

6 Conclusions

We set out to establish how policy acts as a barrier or facilitator to the work of community-led nonprofits concerned with place-based activities focused on improving the health and wellbeing of their immediate communities and the ways in which different policy contexts influence the work of nonprofit organizations, if at all. We have seen that policy can act both as barrier and facilitator in relation to a feeling of disconnection between policy and the realities of context; funding arrangements for nonprofits; tensions between the pursuit of mission and alignment to government priorities; in the implications for policy innovation; and in the relationships between nonprofits and policymakers and commissioners. However, our findings in relation to how differences in policy context influence the work of nonprofits in different ways are far less conspicuous.

There are probably at least two reasons for this lack of clear and unambiguous findings. The first explanation is that despite the presence of divergence in several areas of policy, the devolution settlement in the UK does not allow scope for enough policy divergence to provide for sufficiently different outcomes designed to cope with the entrenched spatial distribution of inequality and vulnerability that we see in the UK (Fransham et al. 2023). The design and implementation of highly localized responses that address the acute needs of communities, which support local nonprofits in such areas in unique ways, and which have clearly identifiable positive outcomes for communities, does not seem to happen to any great extent. The second explanation is that emergent ‘street level’ issues are, in fact, relatively similar across different jurisdictions and policy landscapes. Notwithstanding what was said earlier about how differences are likely to be highly constrained due to the nature of the devolution settlement in the UK, we did not find major differences in the day to day lives of non-profits between UK jurisdictions as seen from a ‘street level’ lens. Rather, where there is a relational disconnect between policymakers and nonprofits (e.g. poor communication/decision making; lack of co-production; poor personal contacts, and so on) these factors seem to cause the biggest ‘street level’ practice barriers. These do not seem to be unique to each jurisdiction but common across the different jurisdictions.

One of the main aspects we saw that influenced practice (positively) was the contextual factor of COVID-19, which saw a greater recognition for the interdependence between nonprofits and policymakers emerge in recognition of the shared goal of tackling the pandemic, often at a ‘hyperlocal’ level (Rendall et al. 2022). However, in the race to return to normal, clear and significant recognition of the role of nonprofits seems to have been passed over somewhat, at least in the UK. Relationships between nonprofits and government have returned to their pre-pandemic position where the power imbalance is clear and unambiguous, and with bureaucratic funding processes quickly being re-established. A ‘reset’ in the relationship between the nonprofit sector and government going forwards, which fully acknowledges and respects the role the sector played during the pandemic, has recently been called for (Roy, Bynner, and Teasdale 2023).

There are, of course, limitations to our study. There are not enough data to generalize experiences across nonprofits operating across the whole of the UK, but our work does provide an in-depth, and plausible account of views and experiences. Future research could include interviews with policy makers, and commissioners to reflect the views and experiences of people designing and delivering policies at the local, regional, and national levels. There was no attempt to achieve representativeness of each country, nor to account for significant differences within countries, and so the experiences of policy impacts on service delivery may differ greatly depending on location.

We have identified several policy implications for our study. The in-depth knowledge that nonprofits have of their communities can be beneficial for effective policy development if their involvement is valued and correctly resourced. Participants stated that barriers emerge when these are designed without consultation from those working directly with individuals experiencing the effects of these policies. Co-production should not feel like a ‘tick-box’ exercise, but an essential component of policy development, from the beginning of the design to the analysis of outcomes relating to funding, nonprofit service delivery, and the everyday realities of community members. Nonprofits should be provided with the necessary support to be fully engaged in the process of coproduction, including resources. And personal relationships matter a great deal to success.

Finally, the COVID-19 pandemic highlighted the importance of meaningful relationships between government and the nonprofit sector, and the positive impact of transferring power to community organizations to operate with much reduced bureaucratic oversight. This experience demonstrates that nonprofits can deliver quickly and effectively in times of crisis, but, with some imagination and a willingness by government to cede at least some power to nonprofit partners, such an approach could easily become the ‘new normal.’