Much has been said and written about the state of nonprofits in Connecticut and the impact on services being provided to many of our must vulnerable citizens. Nonprofits providing human service exist to partner with government – the one of the people and by the people and for the people– to look out for those most in need, helping government and our society to fulfill one of its most basic obligations. I know we can parse around the edges about what being “in need” means. Some have more restrictive definitions than others, but in the end it’s our collective sense of common humanity that brings most of us together in solidarity and collaboration to be there for folks who, often through no fault of their own, turn to nonprofits for help.
Everyone is familiar with the definition of a monopoly. But who has heard of a monopsony? A monopsony is where there is a single purchaser of a service from a pool of many sellers. The State of Connecticut’s purchase of service contracting system, particularly its purchase of human service related programs, is a monopsony. It means the state (the sole purchaser) can set limits on how much it will pay nonprofits (the sellers) for a service. In a monopsony environment, the state basically runs a “take it or leave it” business model. It matters little to the state how much providing that service actually costs.