Privatization Can Work

This article was originally published in the “CAPITOL BUSINESS : The Business-Government Connection” section of the Sacramento Union on June 6th, 1991.

If you are like most businesspeople, you like a good return on your dollar.  If so, then I have a success story to tell you.  I’m delighted to report about Francis House of Sacramento which demonstrates that the answer to all problems is not necessarily government funding and increased taxes.  Francis House is an agency designed to meet the needs of low-income or homeless individuals and families in the Sacramento area.  The primary difference between Francis House and typical government welfare programs is precisely that it is not a government program.  It is fully and totally supported by the private sector, and fulfills an important niche in serving the Sacramento community.

Located on 17th Street between Capitol and L in Sacramento (phone – 443-2646), Francis House operates seven days a week, rain or shine, in offering charity and counsel to those in need.  Be it meals, clothing or shelter, Francis House can provide it.  Furthermore, through its own initiative, Francis House has developed model, computer software to coordinate the resources of 208 agencies within the area to help the needy.  Previously, there was no comprehensive coordination of church, government and community-based agencies for helping the impoverished, be they single parent families parents or men living on the streets.

In the last eight months, Francis House has counseled over 1,230 different people in need, provided over 7,150 complete meals and given out over 17,800 servings of breakfast food.  In the month of April alone, they placed 28 people into permanent housing and 23 people into full-time jobs.  That’s fairly impressive, especially when you consider that it was primarily all accomplished by a core of 30 volunteers (6 of whom were previous clients) and another on-call group of volunteers/advisors also equaling about 30 people.  It is even more impressive when you realize that this was accomplished on a total monthly budget of $8,000 – which covers rent, insurance, food, maintenance, compensation of a full-time director and every other conceivable type of operating expense.

In the public sector, the monthly share of meals alone at a conservative $5.00 per meal would cost over $4,450.  The hours and hours of counseling time would cost public programs at least $15.00 to $25.00 per hour, which would have cost Francis House at least $7,000 per month in itself.

As you look at it, the benefits become obvious of private sector involvement over public sector operations.  Most apparent are the economic values.  Francis House is providing a great value for each dollar invested into it, especially since it is not constrained by the bureaucratic encumbrances of the public sector.  Relatedly, it is seemingly providing much greater productivity for the dollars invested into it.

Furthermore, there are some intangibles which must be considered.  As a completely private agency, it has much greater freedom and creativity in how to solve the problems of its clients, and attention is very personalized.  Its volunteers bring a degree of care and concern which cannot be purchased, or legislated or mandated in any way.  It is the true desire to serve others and to fill a need – it’s not just a job.  Therefore, it is true to say that Francis House not only serves the needs of the needy, but also helps those who need to serve.

It would cost a public agency hundreds of thousands of dollars to do what Francis House does on a fraction of the cost, and it doesn’t cost the taxpayers a dime.  As a taxpayer that makes me feel good, and as a person it makes me appreciate the fact that we don’t have to leave everything to government.  As a businessperson, I like the fact that privatization does work and that there is a place where I, as a responsible businessman, can help meet the needs of my community while knowing that I’ll get an excellent return on my dollar.  As the government budget crisis worsens, the need for private action will increase and Francis House can serve us well as a model.

Bruce Lee expresses the views of the California Business League, a trade association dedicated to restoring quality government.  His column appears Fridays in The Union.  If you have comments or an item for the column, write Capitol Business, P.O. Box 60267, Sacramento, CA  95860.

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