Two months ago, the provincial government where I live asked some of its disability service providers to help pay the provincial deficit – by returning a portion of money from previously signed government contracts. It was a particularly callous move being two weeks before Christmas. In Canada, like other countries, many services that are labeled “governmental” are often provided by non-profit and charitable organizations – who in return receive contracts and payment from the governments. When this funding is cut (or asked to be returned) it hurts beneficiaries and non profits alike – and begs the question of whether intermediaries are being asked to do the job of government?
Rick Cohen addresses this question in the current NonProfit Quarterly by asking, “NonProfit Intermediaries: An Untenable Situation?” Though he addresses an U.S. context, his concerns hit the same notes: governments offloading essential functions onto non profit organizations and through their funding, driving the sector’s agenda. And Cohen shows that burdens are not just in government funding cut situations, but in emergency situations when large amounts of government funding need to be delivered – and the vehicle is a nonprofit.
But the scope of intermediary life is larger than nonprofits delivering government services, with the Social Innovation Fund we expand our understanding of intermediaries to foundations and other funders who may be able to best identify replicable and scalable nonprofit innovations? Do these intermediaries add another layer of bureaucracy – or do they perform an unique and essential function? Can intermediaries build the bridges?
If we view intermediaries from the social innovation side of the sector, there is a strong feeling that they can connect the supply and demand for social investment. Matthew Bishop and Michael Green mention this in The Capital Curve, but caution that these “good brokers” are too often underfunded themselves because they do not directly impact needy beneficiaries. When specialized in research, funding, evaluation, capacity building and so on, intermediaries may provide the ability for both nonprofits and funders to do their work better. (Karim Harji of Social Finance does a great summary of the article’s main points.)
As I was trying to bridge the idea of the role of intermediaries, a memo crossed my desk that showed me the incredible impact that intermediaries can have. The teamwork of foundations, local funders, and investment bankers to propose solutions to government and for government – to expand the spectrum of possibilities for nonprofits working in innovative spaces. Intermediaries can ally together and can use their voices to move the government forward.
Where is the balance between bridging sectors and creating bureaucracy? Finding that balance needs to be our goal or at least remain top of mind. But think of all of the for-profit intermediaries we use that are effective, efficient, and make our lives more innovative….Facebook to connect me efficiently to long distance friends…brokers to invest my money better than I could… agents advocating for authors to publishers…grocers sourcing food that I’d like to eat…
We’re too connected now to go back to our silos. Let’s build the right intermediaries – and build the bridges strong.