Volume 8, Issue 2 - 2016 ARNOVA Symposium on Public Policy for Nonprofits, Guest Editors: Steven Smith and Rachel Laforest

We have entered a period of turbulent economic and political change. Internationally, slower growth coupled with youth unemployment and rising inequality have driven a renewed interest in social policy. In the US, the preferred policy approach since the 1990s has been to move away from cash assistance to direct service provision spurring demand for nonprofit services at the local level (Smith 2015, “Managing Human Service Organizations in the 21 st Century.” Human Service Organizations: Management, Leadership, & Governance 39 (5):407–411). Recently, however, we have observed a power backlash against trade, immigration and economic insecurity that is reshaping politics and bringing about significant cuts in social service programs and health care at a time when the need is high. Fiscal scarcity will no doubt create an additional burden for nonprofits working with communities in need. In Canada, the federal government is moving in the opposite direction with greater investment in the social policy fields, including healthcare, childcare, housing and poverty reduction initiative. These investments will mean a greater flow of resources to the nonprofit sector, but the government has been clear that in exchange they want to tie funding to results and performance.

The smart partnership framework introduced in this article is derived from extensive, on-site interviews with nonprofit and public contract managers conducted in several grounded research projects between 2011 and 2015 and from the research literature on contracting. The framework demonstrates the continuing explanatory power of resource dependence theory that disentangles the formidable influence of the public policy environment on organizational action. It is intended to provide a coherent guide for practice by enabling nonprofit managers in the social services field to navigate the current intense environmental uncertainty in which cross-sector contracting relationships between government agencies and nonprofit organizations are embedded. By providing an accessible way to understand an extraordinarily complex set of inter-organizational dynamics, the model offers a research-based definition and clear visualization of what it means to be a smart partner. It highlights the necessity of understanding the norms, expectations, structures, processes, and culture within which sector counterpart contract managers operate. Fundamental to the range of managerial strategies that the framework calls for is the need explicitly to attend to relationship building, to patterns of variation in relationships over time, and to their probable consequences. The integrative model consists of three inter-related organizational competencies and a number of secondary competencies. Competency 1: understand the dynamic nature of contracting relationships; secondary competencies: recognize predictable variations in relationships; comprehend the importance of multiple institutional logics. Competency 2: develop and sustain capacity for strategic adaptation; secondary competencies: build external and internal learning capacity; discern power shifts in inter-organizational relationships; maintain capability for strategic repositioning. Competency 3: participate proactively in shaping policy change; secondary competencies: attend to relationship development and nurturance; build trust and credibility.

Collaborative governance is an increasingly popular form of governance. In theory, collaborative governance processes should be inclusive and value the perspectives of multiple stakeholders, including nonprofit organizations. In practice, this may not be the case. Recent work on representation in collaborative governance has found asymmetry in the way actor groups are descriptively and substantively represented in the collaborative governance process. We extend this line of work by employing network methods to create a diagnostic tool to identify which individual actors are substantively represented in collaborative governance processes over time. This tool is designed to systematically evaluate whether individual actors are under or overrepresented in collaborative governance. It provides a starting point for groups to discuss whether they are functionally inclusive and to understand whether non-inclusion is random or systematic. We apply the tool to collaborative governance in a regional food system and find variance in substantive representation by actor, indicating the collaborative governance process diverges from its inclusive design in practice. In particular, nonprofit organizations who are formally part of the collaborative governance process are not substantively represented in formal meetings to the same degree as city and county agencies.

Place matters, particularly when one considers human services. Proximity to individuals served is particularly important in those human services dedicated to people with low mobility or elevated fears of difference. Our project aims to explore the location decisions of job placement and training nonprofits at a national level. Relying on four separate data sets - 990 data from the National Center of Charitable Statistics, federal contracting from the Federal Audit Clearinghouse, and American Community Survey data at the census tract level - we analyze nonprofit movement from 2008–2012 and assess the impact of federal contracts on the prevalence to move. This analysis finds that federal contracts played a powerful but double-edged role in redistributing job placement and training agencies. First, federal contracts seem to have helped nonprofits move to ‘better’ neighborhoods post-recession. Second, and somewhat contradictory, we also find that post-recession these same agencies were located in far worse neighborhoods than non-contracted counterparts that also moved during the recession.

Nonprofit overhead is a prevalent and controversial topic in the nonprofit and philanthropic sector. Online raters (such as Charity Navigator) point to the overhead rate as a key indicator of nonprofit worthiness. Different government entities use wildly different indirect cost rates when contracting with nonprofits, which translate into billions of dollars of funding being gained or lost. Foundations rarely have explicit guidelines, but most have informal rules of thumb that affect how a nonprofit can use grant funds. Meanwhile, nonprofit executives struggle to make sense of it all as they manage their operations amidst the conflicting requirements of their funding sources. To gain insights into how overhead costs are handled in nonprofits, the California Association of Nonprofits (CalNonprofits) conducted a survey of 451 California nonprofit executives, as well as interviews with elected members of county boards of supervisors and their staff throughout California in the spring of 2016. This paper reports on both of these, which were part of a larger initiative of CalNonprofits called The Nonprofit Overhead Project .

In the USA, the regulatory framework for fundraising by charitable organizations has been described as a “50-state mix of fees, registration, auditing, and financial reporting requirements” (Irvin 2005, “State Regulation of Nonprofit Organizations: Accountability Regardless of Outcome.” Nonprofit and Voluntary Sector Quarterly 34 (2):161–178). However, little is known about how differences in state fundraising regulations might affect the ability of organizations to raise funds from donors. State charities regulation is intended to cultivate an environment that incentivizes giving and reduces fraud, where donor dollars are maximized for the mission to which they are given. Whether current charitable solicitation regulations actually succeed or impede this regulatory goal is the subject of this paper. For this research, we create an index of fundraising regulatory breadth, based on the presence or absence of key components of state charitable solicitation regulations. We use a nationally representative, longitudinal database to examine the impact of state fundraising regulations on fundraising performance. The database, which contains details of over 110 million gift transactions recorded by charities between 2006 and 2016, permits the creation of several organization-level metrics used by professional fundraisers. These metrics serve as dependent variables in multivariate models, where the control variables characterize the charitable environment of the states where the organizations are located. Although space does not permit a complete description of our results, we suggest that further research will add to the understanding of how to construct effective regulation of these and other transactions. The analysis compares state-level measures of fundraising performance, which summarize the organization-level metrics calculated from the multivariate analysis, with the state-level values of the regulatory breadth index. The results of the analysis suggest that organizations tend to have lower values for these fundraising metrics, controlling for the characteristics of the state’s charitable environment, in states that have more robust regulatory regimes (where more activities are covered). However, these results appear to be largely a result of the influence of those states where both (1) regulatory breadth is greater and (2) the oversight system is bifurcated : that is, oversight of fundraising is located in both the state attorney general’s office and another state agency, such as a secretary of state’s office.