Efficiency vs. Equality in the Social Sector

eqaulityWarning: This post is adapted from one of my papers for my cross-sector collaboration and management class. It is quite theoretical and may only be only interesting to nerds like me. If you believe yourself to be a nerd like me, read on.

In the last few decades, there has been an increased focus on “efficiency” in the social sector. Efficiency in the social sector can mean a lot of things–sometimes its about cutting costs, sometimes its about using business practices to better deliver social services (here I’m using “social sector” to refer to both nonprofit and government sectors), sometimes it’s about both cost reduction and business processes unified under the mantel of “entrepreneurship.” In the “entrepreneurial” model of the social sector,  public servants fill the role as service providers for citizens (consumers) that react to market forces. This approach to governance is exemplified by Al Gore’s mid-90s National Performance Review that recommended reforms on how to get better results out of our government.

In this entrepreneurial social sector, public servants use efficient means to deliver better and more responsive services to their constituents. Basically, the role of a government/nonprofit employee is to deliver better services in a more timely manner for less money. Everyone’s happy, right? Well, unfortunately, researchers have shown that this bottom-line-focused approach to public service excludes vulnerable members of our society. By looking only at efficiency, they ignore the promise of equality that our government promises.  This tradeoff between efficiency and equality is well established in social science literature–and it makes common sense: If you’re focused on costs and the best way to provide services, you are going to ignore the most disadvantaged, because they have the most problems and are usually the hardest to reach.

But, the tenants of entrepreneurship and equality are by no means inconsistent. In fact, there is a growing movement to encourage civic engagement through entrepreneurship. The Points of Light Foundation has started a “civic incubator” that supports enterprises focused on building community wealth and citizen engagement. They have supported organizations such as Fuse Corps, which connects professionals with city governments for a one-year fellowship aimed at solving a large-scale challenge, as well as Moneythink, which teaches financial literacy to urban high schoolers. The Rockefeller Foundation launched a “100 Resilient Cities” challenge for cities around the world to compete for resources to strengthen their civic infrastructure. Of course, all of these examples fit into to the broader “social enterprise” movement, and social entrepreneurs around the world are using businesses practices to serve some of the most vulnerable.

One could argue that these social enterprise leaders are themselves public servants, using the tools of efficiency and entrepreneurship to engage with citizens and serve their needs. I believe this is the case, but I’ll save that for another post. Instead, I will focus on the role of “classic” public servants. Classic public servants (that is, those working in government agencies*) can also use the tools of social entrepreneurship to serve the public. By harnessing the power of these social entrepreneurs and serving their needs, the public servant is employing the tools of entrepreneurship through the method of service to create stronger communities, and therefore increase equity. (This assumes that a public servant has some degree of accountability and would not support social enterprises actually end up hurting the community more than they help. I think this “do no harm” assumption is a fair one.)

Taking this view of entrepreneurship, equity and service morphs the public servant’s role to one of facilitator and social infrastructure developer. The public servant works with on-the-ground social entrepreneurs to grow their programs and solutions, through connections as well as resource support. This leads to stronger communities and a more engaged citizenry. In this way, public servants can serve, be efficient through entrepreneurial means, and create a more equitable society. There is no need to make a tradeoff between any of these concepts.

And everyone is happy!

Photo credit: Emily Hoyer

*The role definitions here can get confusing when you realize that both nonprofits and for-profits can be social enterprises.

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2 thoughts on “Efficiency vs. Equality in the Social Sector

  1. Jeff, Interesting post. I feel somewhat confused about your use of the word equality. Equality – where everyone is treated equally and given the same service – is actually pretty aligned with efficiency. It’s equity – providing for people’s needs so that equal outcomes are produced – that creates the difficult tension. I also am not sure that any of the examples provided actually guarantee that the most disadvantaged are served (for example, MoneyLink isn’t serving the most disadvantaged teens, because they’re not in school!). Maybe I just need to read the entire paper you wrote, but I’m not sold that entrepreneurship – especially when sustainability and scale are regularly placed on a pedestal – has a friendly relationship with equity. And, in the end, it seems that that’s the social good conversation we’re trying to have. – Mark

    • Thanks for reading Mark! Appreciate your comments. Glad you enjoyed.

      To your first point: I actually did use the term equity in my original paper, not equality. I felt like equity was too wonky of a term, and there was enough overlap between equity and equality that it was ok to use them interchangeably. I may have been mistaken in their synonymousness. However–I do think that equality, as the way you define it, can have some tradeoffs with efficiency. Transaction costs alone will make it difficult to provide the same services for those individuals that are harder to reach if you take the traditional view of efficiency that I discuss in the opening paragraphs here.

      For your second point–while my examples may not create equity completely on their own, I do think there is potential for entrepreneurship to be used to create equity. I see entrepreneurship to be used as a tool–Moneythink may not reach the neediest, but it is developing a model that is reaching those that were not reached before. Ideally, Moneythink would then be able to expand their work to other populations. Obviously, we have no idea if they can or will do that (I actually don’t know much about their internal operations or goals), but the point is that they theoretically could, using entrepreneurial tools. My point with this post is that by fostering entrepreneurship as a tool in many different areas, public servants can create a more equal (equitable) social system.

      Hope this clarifies a few things–thanks again for reading!

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