The Great Depression

The Great Depression

Introduction

In many ways, the Great Depression served as the groundwork for the contemporary nonprofit sector. During this time period, the government greatly increased its role in the provision of social services in the United States. Meanwhile, Nonprofits were forced to adapt their roles around a new actor. Nonprofit leaders took on greater advocacy roles within the government, and a public/private partnership was formed that lasts to this day. Knowing this history is critical in understanding why the Nonprofit and government sectors interact in the way that they do today. This history also yields useful suggestions on how the sector should respond to future economic depressions or recessions, as the Great Depression itself revealed both the limits of the nonprofit sector and what actions nonprofit leaders took to break these limits in the service of others. (Bureau of Labor Statistics)

The Great Depression and the Beginning of the Modern Partnership between the Government and Nonprofit Sectors

Today's provision of social services in the United States is marked by varying levels of competition and partnership between Nonprofit and governmental service providers. These levels of competition and partnership are often not clearly demarcated. Indeed, even within the same sector, like education, direct assistance to the poor, and so on, government and nonprofit entities both compete and partner in the provision of services. Today, Nonprofit leaders must not only ensure that their own projects are doing good work in their communities, but also be active in the governmental sphere: advocating for more or less government assistance, serving as a watchdog for government programs, and navigating their own Nonprofits through the ever-changing legal and funding landscape created by changes in government public policy. (Singleton)

This modern environment of government—nonprofit interaction finds its roots most directly in the tumult of the Great Depression. Certainly, there were instances of government involvement in the provision of social services before Franklin Delano Roosevelt instituted his New Deal. Nonprofit groups, more commonly known at that time as voluntary or private associations, were also active in government advocacy before the Great Depression. However, no previous occasion of nonprofit advocacy or government service provision equaled the extent to which both expanded during the Great Depression. (Rollins)

The Great Depression was the most severe economic disaster the United States had ever seen. In less than 3 years from its start, a quarter of the nation's population became unemployed. Private relief agencies, which we would refer to today as nonprofit organizations, collected and distributed millions of dollars in donations and provided aid to millions of impoverished families. In this environment, nonprofit leadership was critical in providing much needed relief to Americans across the country. The Depression also changed the way private agencies and the federal government interacted with one another. By the end of the decade, with the arrival of World War II, private agencies became active partners with the federal government in relief efforts.

The Philanthropic Environment Prior to the Great Depression

For the purposes of providing perspective to the poor-relief programs of the ...