Organizational form and performance: An empirical investigation of nonprofit and for-profit job-training service providers

Abstract

While research on the distinctions between for-profit and nonprofit organizations and their changing service sector shares is vast, there is comparatively little empirical evidence on the consequences of their differing attributes for social program outcomes. This article presents research on publicly subsidized for-profit and nonprofit job-training service providers, namely whether organizational form influences client enrollment, service delivery activities, or performance, as measured in terms of participant outcomes. The findings show that nonprofit providers were not more likely to serve more disadvantaged clients and that neither for-profit nor nonprofit service providers were consistently more effective in increasing participants' earn-ings and employment rates. When performance incentives were included in service providers' contracts, contractors of all forms performed significantly better across all participant outcomes examined. © 2000 by the Association for Public Policy and Management.