Monday, January 23, 2017

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Caring Communities: The Role of Nonprofits in Rebuilding the Gulf Coast

The idea of “social entrepreneurship”—innovation in the philanthropic sector to fill in the gaps left by both the market sector and the state sector—has become a hot topic in the last decade.  People increasingly wonder how nonprofit enterprises and social entrepreneurs can effectively mimic the successes of the market economy in increasing human welfare, choice, and dignity without either the profit-loss system of markets or the democratic and constitutional checks of the public sector.

Bereft of the anonymous mechanisms of self-governance that exist in a market economy, however, how do social entrepreneurs know if they are doing the right thing in choosing project A or project B? How do they calculate the use of scarce time and financial resources? How effective are their organizations, and how helpful are they to communities and society at large? David Prychitko and I discussed this question in 2004 in the inaugural issue of Conversations on Philanthropy. A year later, Hurricane Katrina reminded us of the import of these questions.

So wide is the field of social entrepreneurship and so broad the definition that it is helpful to have a lens through which to focus the study of the area. The recovery of the Gulf Coast following the destruction wrought by Hurricane Katrina in 2005 provides such a lens.  Since 2005, researchers from the Mercatus Center at George Mason University have studied how different social, legal, political, and economic institutions affected communities before, during, and after the hurricane, with an eye to learning what works in disaster preparedness and recovery.

Across the Gulf Coast, the voices of people affected by Katrina have showed us how people acquire knowledge and how people perceive government, businesses, and community efforts. Social scientific research, based on over 450 hours of interviews with people from the Gulf Coast, is critical to better understanding how people, businesses, and communities prepare for and rebuild after disasters and the role that the for-profit, nonprofit, and public sectors play in every day social and economic interactions.

Despite the immense scope of this disaster, individuals and communities found hope and help in the immensely generous philanthropic contributions of informal networks of voluntary social action, such as religious organizations, as well as in established nonprofits.  Thus, if policy makers want create “resilient communities” that can survive disasters, Lenore Ealy suggests that they implement policies that permit grassroots organizations to participate in disaster preparedness, response, and recovery rather than shutting these groups out.

After all, as Emily Chamlee-Wright and Virgil Storr point out, social entrepreneurs play a vital role in disaster-recovery efforts, providing the materials, services, and information that people need to rebuild their lives and filling in the (frequently immense) gaps left by government-provided services. These gaps were, and are, especially large in the area of information provision, Jerry Brito and Daniel Rothschild argue, where continued clinging to the traditional view of disseminating information through a centralized control—an antiquated model in the Internet age—hampers disaster response efforts.

Roxanne Alvarez and Veronique de Rugy consider why people even give money to nonprofits and whether and how nonprofits effectively use that money to fulfill their independent missions.  Jennifer Zambone explores the centralization of compassion and whether the continued growth in the size and scope of the state distorts, or even displaces, the self-governing properties of civil society.

In Democracy in America, Alexander de Tocqueville wrote,

Nothing, in my opinion, is more deserving of our attention than the intellectual and moral associations of America. The political and industrial associations of that country strike us forcibly; but the others elude our observation, or if we discover them, we understand them imperfectly because we have hardly ever seen anything of the kind. It must be acknowledged, however, that they are as necessary to the American people as the former, and perhaps more so. In democratic countries the science of association is the mother of science; the progress of all the rest depends upon the progress it has made.

Tocqueville’s observation holds true today. The nonprofit sector plays a vital role in a society of free and responsible individuals. The face-to-face forces of reputation and community membership not only coordinate highly effective small-scale projects that support those in need, but they provide a sense of community and identity to us all.

This issue of Local Knowledge seeks to pay attention to and increase our understanding of the necessity and vitality of such associations and the work of social entrepreneurs in society, both in normal times and in those that are most trying.

Peter J. Boettke
University Professor of Economics
, George Mason University
Vice President of Research
, Mercatus Center at George Mason University
, VA
August 2009