Handing over the Keys: Nonprofit Economic Development Corporations and Their Implications for Accountability and Inclusion

ABSTRACT

Public organizations have explored service-delivery with nonprofit organizations to help alleviate the strain on their long-term fiscal sustainability. This interdependence has ramifications for fairness and responsiveness in service-delivery that are poorly understood. One area where government-nonprofit collaborative activity has not been explored is within the context of sustainable development. This study utilizes surveys of U.S. cities at multiple time periods to examine the comparative use of nonprofit economic development corporations and their performance on smart-growth and social equity policy activities. This study first explores the roles played by the two most common types of local nonprofit organizations—nonprofit Local Development Corporations (LDCs) and Community-Based Development Organizations (CBDOs)—in use of performance information and accountability mechanisms in local economic development activities. In turning to policy outcomes, the use of LDCs is negatively associated with land use policies intended to advance social inclusion.

KEYWORDS:

• local economic development
• nonprofit governance
• organizational theory
• social equity
• strategic management
• sustainability

Notes

“Municipal Use of Local Development Corporations and Other Private Entities: Background, Issues and Recommendations.” New York Office of the State Comptroller, April 2011. https://www.osc.state.ny.us/localgov/pubs/research/ldcreport.pdf.

For a robustness check, this probability drops to 88% when we include only LDCs that are 501(c)(6) organizations.

Additional information

Notes on contributors

Aaron Deslatte

Aaron Deslatte is an assistant professor in the Department of Public Administration at Northern Illinois University, DeKalb, IL.

Alicia M. Schatteman

Alicia M. Schatteman is associate professor in the Department of Public Administration at Northern Illinois University, DeKalb, IL.

Eric Stokan

Eric Stokan is assistant professor in the Department of Political Science at Towson University, Towson, MD.