The growing interest in private solutions like CSR initiatives, non-profits, and public-private partnerships for addressing social issues such as poverty alleviation, disease eradication, or education provision poses a critical question: Are these solutions Pareto improving, or do they benefit recipients while disadvantaging non-recipients? This concern is particularly pertinent when private providers compete with public actors, potentially reducing the latter’s effectiveness. In this paper, I examine how private solutions to social issues might negatively impact existing public providers. First, the entry of private providers could diminish support for public providers, leading to fewer resources. Second, private providers, often profit-motivated, might serve more economically viable segments, leaving less viable ones to public providers, thereby increasing the latter’s production costs. I explore these mechanisms in the context of US public education, where charter schools (private providers) coexist with traditional public schools (public providers). I find that the entry of charter schools reduces local support for traditional public schools (TPS), evident in decreased per pupil local revenues and fewer successful school referenda for additional funding. Furthermore, using a quasi-natural experiment, I demonstrate that traditional public school grades exposed to charter schools see an increase in the proportion of economically disadvantaged and disabled students. Additionally, I find these effects are more pronounced following the entry of for-profit private providers than non-profits, providing evidence on the comparative efficiency of the non-profit organizational form in addressing social issues where a service must be provided indiscriminately.