PRIVATE MANAGEMENT OF PUBLIC SPACES: NONPROFIT ORGANIZATIONS AND URBAN PARKS

Abstract

This paper argues that a theoretical account of the formation and operation of the nonprofit organizations (NPOs) that increasingly manage public property must have a place for the way in which nonprofits manifest responsibility. The current nonprofit models, therefore, must be extended and refined in order to explain the private management of public space by nonprofits. NPOs take responsibility in two ways that reduce the cost of monitoring their performance and, consequently, help to create positive outcomes for public spaces with respect to funding and maintenance. First, NPOs as a single entity assume responsibility for public space in a way that contrasts strongly with the diffuse accountability of governmental managers and, more importantly, in a way that makes them easier to monitor. Second, the dependence of NPOs on their revenue streams – donations or user fees, depending on the type of NPO – makes them responsible for the success of the park in a way that both contrasts strongly with insulated civil servants and places the burden on the NPO, instead of on individuals outside the organization, to compile and communicate information about their operation for monitors. Private managers, therefore, are more accountable for their actions than governmental managers because they are more responsible and, thus, less costly to monitor. Several policy and legal reforms are helpful to fostering NPO responsibility that reduces monitoring costs.