The construct for how citizen's needs are met as illustrated through the three-legged stool emphasizes a purpose for each leg: corporate addresses demand in exchange of course for pay; government addresses the lowest common denominator of need (ok, not always so perfectly) via some taxation system; and, nonprofits address the gap of needs not addressed by corporate (not enough incentive to offer the product or service) or government (not enough "loud" enough or connected enough demand).
So when a municipality, like the City of New York creates a nonprofit to fill needs it is not otherwise called to meet, one wonders how well this can work. And the answer: not always so good. And the primary problem, drawing from a New York Times article: governance and in particular, the Board Chair. Check-out the article about the absentee Chair and a board without leadership and at minimum, appreciate, board chairs matter!