American charity and social services have traditionally been provided by a complex blend of private organizations and public agencies. Despite this fact, many conservatives propagate the myth that welfare traditionally has been provided by private individuals and organizations, especially religious ones. In fact, in the early years of the United States, the majority of social welfare services in small communities was provided by private individuals and/or organizations. In cities, where problems such as disease, homelessness, poverty, hunger and infirmity were more common in a proportional absolute sense, aid was more often provided by the government. However, there was still a mix of both public and private provision of welfare services in both rural and urban areas.

During the New Deal of the 1930s and the Great Society programs of the 1960s, there was a drastic increase in the provision of services by the federal government. This included the establishment of Social Security, AFDC, and public housing provision. However, beginning in the 1970s and through to the present, there has been a backlash against federal provision of social services in particular and government provision of social services in general. In some cases, the government has completely cut funding for services and hoped that private entities would fill the void. In other instances, such as in the case of health-care aid and homeless shelters, the government has partnered with private organizations who provide the services and receive at least partial funding from the government. For the remainder of their needs, these organizations depend on donations and/or volunteerism, which are not dependable and often inadequate.

Many social services have been delegated to religious groups. In many cases, churches have proven inadequate at providing social services because they do not have expertise in the area, or may proselytize rather than provide services, or face declining membership and money and cannot afford an expanded social role.

Katz concludes that non-profits cannot substitute for the state.