One of the many roles that the non-profit sector plays in our society is to replace or supplement governmental functions. The organization I currently work for, the Grand Central Partnership, is a good example of an organization that plays this type of quasi-governmental role as it provides supplemental sanitation, public safety, and streetscape improvement services. While my organization does not completely replace the activities of the Department of Sanitation, NYPD and Department of Transportation, it does leverage investments from Midtown East property owners to relieve some of the city’s burden in these service areas. Broadly, the role that non-profits play in relieving the government’s service burden is a justification for why the government grants tax-exempt status to non-profits.

On the other hand, the role that non-profits play in replacing governmental functions raises a fundamental question of accountability. That is, when the government fails in providing a public service, citizens can hold elected officials accountable by organizing or voting those officials out of office. When non-profits fall short in performing these functions, how and by whom are they held accountable?

Primarily, non-profits are accountable to their Boards that ensure organizations are operating ethically and in compliance with their missions. As a funder, regulator and granter of tax-exempt status, the government also maintains significant oversight over non-profit activities. Other non-profit watchdog groups, such as Charity Navigator, play a role in ensuring accountability as well.

Despite concerns about accountability, non-profits that replace governmental functions provide services that the government is either unable to provide (due to budgetary constraints, for example) or services around which there is need but no political consensus to ensure those services are consistently provided by the government. Also, due to the immense scale of many social problems, non-profits often provide services that supplement and exist alongside governmental services.