This analysis examines the capability of the nonprofit sector in comparison to government intervention to reduce housing problems for the poor. Past government efforts have generally failed to improve housing, resulting in disastrous unintended consequences. While the government sector has the ability to affect the quantity of available housing, its efforts are fraught with efficiency problems. Conversely, even though nonprofits face some of the same limitations as the government, they have the ability to adapt different learning, feedback, and implementation mechanisms which provides unique and decentralized options for those seeking adequate housing.
A case study approach was conducted on the Birmingham, Alabama Habitat for Humanity (Birmingham Habitat), a nonprofit attempting to alleviate inadequate housing through homeownership. The research findings show that Birmingham Habitat outperforms government housing programs in producing lasting improvements in housing conditions; yet, Birmingham Habitat faces potential burdens and limitations through its ever-increasing participation in government-funded programs. The findings suggest that nonprofit organizations should be aware of, and adjust for, the challenges connected to continued interaction with the public sector. While general grants and government-sponsored volunteer programs may enable organizations to expand their capacity without changing their basic structure, involvement in more-specific government programs will likely do more harm than good.