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Abstract

This article raises the question of how the influx of federal money during the New Deal affected nonprofit organizations (NPOs) operating in the social welfare sector. Using data on the number of NPOs operating in six service categories in New York City, we demonstrate three distinct trends—some types of organizations fared very poorly, other types remained relatively stable, and a third set actually experienced significant growth in numbers. We hypothesize that two factors explain these variations—the extent to which NPOs were perceived to be doing work that was explicitly related to the immediate crisis appears to have influenced their success in sustaining charitable support. More importantly, the extent to which a class of organizations was excluded from participating infederal relief programs appears to have significantly influenced the overall success and failure rates. Those organizations that were included as partners in the federal relief efforts experienced significant growth.

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The Effect of State Intervention in the Nonprofit Sector: The Case of the New Deal

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