Nonprofit Contractors Research Articles

Partners or Providers? An Analysis of Nonprofit Federal Contractor Performance

As competition over grant funding increases, nonprofit organizations (NPOs) are increasingly likely to enter into contracts with government agencies to ensure funding stability and accomplish organizational goals. Public agencies seek to reduce the possibility of contractor performance problems. Unlike profit-seeking firms that may need constant monitoring, NPOs could be more likely to serve as stewards of public resources, delivering services consistent with shared goals. However, few empirical studies have assessed the comparative performance of private and nonprofit contractors to determine whether there are meaningful differences in practice. This study analyzes nearly 25,000 U.S. federal definitive contracts that concluded between 2005 and 2015. Using predictive statistical analyses, findings indicate that nonprofits deliver more complex work than their for-profit counterparts, are less likely to be terminated early, do not require additional contract modifications, and are treated similarly to other vendors. Taken together, the results suggest that there are mutual benefits when governments and nonprofits engage in contracts.

Engaging Citizens in Government Contracting: A Theoretical Approach for the Role of Social Service Nonprofits

AbstractOutsourcing may lead public administrators to regard service recipients as customers to be satisfied rather than as citizens demanding access and empowerment. This research investigates the extent to which social service nonprofits might bridge the gap between citizenship and customer service to advance shared values and reinforce public institutions. Due to unique institutional and organizational features, such as value-driven commitments, restrictions to financial distribution, and special knowledge of under-represented groups, social service nonprofit contractors may offer distinct advantages over for-profit firms in contract management. We begin by analyzing the conflicting and complementary aspects of citizenship and customer service in democracy and identify the advantages of nonprofit contractors. Then, using the lenses of transaction cost economics and agency theory, we explore how nonprofits can mitigate contract risks while bolstering citizenship. We present several suggestions to guide public agencies and future scholarship on reasserting the importance of public values in modern governance.

The Cost of Accountability for Small Human Service Contractors

ABSTRACTHuman service contractors are an integral part of producing public services. Performance contracting over 30 years has increased accountability measures in order to mitigate transaction costs. Here we address whether the focus on accountability increases unreimbursed costs, something that is particularly harmful to small nonprofit contractors. Using a national survey of the government-nonprofit relationship, conducted by the Urban Institute in 2010, along with lagged financial indicators, we find that nonreimbursed costs associated with accountability harm human service nonprofits.

Social Service Contracting-Out in Korea and Japan: Municipal Governments, Nonprofit Contractors, and Local Residents

Focusing on the role of local residents` participation in nonprofit social service contracting-out, this research has three aims. The first is to reveal the commonalities and differences in the relationships among municipal governments, contractors, and local residents in Korea and Japan through the use of survey data. We observed several common elements between the two countries regarding the relationship between municipal governments and nonprofit contractors. However, the relationships between nonprofit contractors and local residents were quite different in each country because of their different local self-governing environments. The second is to identify the current types of local residents` participation in contracting-out, and to categorize them into inclusion of local residents as members of contractors, participation of local residents in governance mechanisms, open meetings, and involvement of local residents as volunteers. The final aim is to ascertain whether there are statistical differences between the respondents` perceptions in the two countries regarding the effects of local residents` participation on service responsiveness. Using an independent sample t-test analysis, we verified that Japanese municipal managers had more positive and statistically significant perceptions regarding the effects of open meetings, and Korean nonprofit managers had more positive and statistically significant perceptions regarding the effects of involvement as volunteers.

Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from “Work First”

Temporary-help jobs offer rapid entry into paid employment, but they are typically brief and it is unknown whether they foster longer term employment. We utilize the unique structure of Detroit's welfare-to-work program to identify the effect of temporary-help jobs on labor market advancement. Exploiting the rotational assignment of welfare clients to numerous nonprofit contractors with differing job placement rates, we find that temporary-help job placements do not improve and may diminish subsequent earnings and employment outcomes among participants. In contrast, job placements with direct-hire employers substantially raise earnings and employment over a seven quarter follow-up period. (JEL J22, J23, J24, J31, J68)

Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from 'Work First'

Temporary-help jobs offer rapid entry into paid employment, but they are typically brief and it is unknown whether they foster longer-term employment. We utilize the unique structure of Detroit's welfare-to-work program to identify the effect of temporary-help jobs on labor market advancement. Exploiting the rotational assignment of welfare clients to numerous nonprofit contractors with differing job placement rates, we find that temporary-help job placements do not improve and may diminish subsequent earnings and employment outcomes among participants. In contrast, job placements with direct-hire employers substantially raise earnings and employment over a seven quarter follow-up period.

Thinking About Stakeholders of Public Agencies: The Georgia Department of Transportation Stakeholder Audit

Practitioners and scholars have grown increasingly interested in recent decades in how public administrators should and can work with the constituencies they serve. To date, most of this conversation has focused on citizens and broader communities rather than on stakeholders more generally, but these other stakeholders, ranging from oversight policy-making bodies to private sector and nonprofit contractors to governmental partners, are no less important than the general public. The purpose of this paper is to propose a first step that many agencies might take in thinking about their range of stakeholders, a step that we term a “stakeholder audit.” A stakeholder audit entails (1) mapping the universe of an agency’s stakeholders, (2) assessing the agency’s perceived needs for additional information relative to various stakeholder groups, and (3) developing suggestions on how to obtain that information. After first discussing the more general idea of stakeholder analyses, we describe the stakeholder audit technique, and illustrate how it has been applied to a particular agency, the State of Georgia’s Department of Transportation. We conclude by considering how a stakeholder audit could represent a first step for an agency in improving relationships with its stakeholders.

Collaborative Performance Measurement: Examining and Explaining the Prevalence of Collaboration in State and Local Government Contracts

Viewing collaboration as an imperative for public managers, scholars are calling for a better understanding of its origins, prevalence, and impact on organizational performance. The objective of this study is to explore the prevalence and the determinants of collaboration pursued in the course of monitoring government contracts. The theoretical framework proposed in this study explores the effect of several categories of collaboration determinants pertaining to government agencies, contractors, contractual relationships, services, and markets. Data were collected using semi-structured interviews administered to 69 state and local contract managers as well as nonprofit and for-profit contractors in five jurisdictions. Qualitative analysis identifies a variety of collaborative strategies used by agencies seeking vendors’ input and by vendors proposing and negotiating performance monitoring arrangements. Regressions analysing the determinants of collaboration suggest that the latter is more often pursued by nonprofit contractors and vendors with a unique expertise and higher resource dependency. Governments with advanced in-house professional capacity and willingness to collaborate are also more likely to rely on the contractors’ input. Meanwhile, high service measurability, long-term relationships, and dynamic markets reduce the likelihood of collaboration. This study suggests that collaborative performance evaluation presents both challenges and opportunities for effective contract implementation. The responsibilities of monitoring officers appear to extend beyond specifying and enforcing performance standards—they require the skills and motivation to empower contractors and to learn from their input and the professional capacity to evaluate their

Agents or Stewards: Using Theory to Understand the Government-Nonprofit Social Service Contracting Relationship

Using agency and stewardship theories, this study examines how public administrators manage contracting relationships with nonprofit organizations. Interviews were conducted with public and nonprofit managers involved in social services contract relationships at the state and county level in New York State. The use of trust, reputation, and monitoring as well as other factors influence the manner in which contract relationships are managed. The findings suggest that the manner in which nonprofits are managed evolves over time from a principal-agent to a principal-steward relationship but with less variance than the theories would suggest. This results in part from the contextual conditions that include the type of service, lack of market competitiveness, and management capacity constraints. The intergovernmental environment in which social services are implemented and delivered presents complex challenges for public managers responsible for managing contract relationships. The findings from this study document those challenges and the corresponding management practices used with nonprofit contractors.

Society for Range Management Certified Programs: “Symbol and Substance”

The Society for Range Management (SRM) Denver office receives regular calls and contacts regarding our two certification programs: There is an encouraging and gratifying level of interest and activity in them. Answering repeated questions asking about the differences between the programs, and assisting applicants who were wondering whether one of the programs was for them, led us to write this article for Rangelands. There appears to be some confusion about the two certification programs that SRM administers. The Certified Range Management Consultant (CRMC) is very different from the Certified Professional in Rangeland Management (CPRM). Let us explain the definition and purpose of each program to clear up any misconceptions. The CRMC is an individual who generally serves as a paid consultant or who serves with private or nonprofit contractors. The general well being and quality of our rangelands depends on the level of professional competence brought to bear on their use and management. Range consultants are called on to provide a variety of services associated with rangelands and their use. This certification program was established to designate qualified professionals whose standard of consultation is in the best interests of the public and our environment. SRM has 62 CRMCs. The CPRM is an individual who plans and implements sound management of public and private rangelands and who is generally a person working for a local, state, or federal agency. The overall objective of the program is to provide the means of improving the standards of professional expertise used in managing public and private rangelands. The specific goals of the program are to provide rangeland professionals, government agencies, and the public with minimum education and experience standards and to ensure that practicing rangeland professionals meet such standards; to improve public confidence that our rangeland resources are managed by professionals who pledge to uphold the Code of Ethics and the Standards of Conduct and who act in the best interest of the rangeland resources and the public; and to evaluate professionals through a critical peer-review process based on minimum educational, experience, and ethical requirements. SRM has 532 (and 15 more in process) CPRMs. Although the purpose of both programs is to benefit the rangeland resources, each program is different and is designed according to the type of rangeland professional who is interested. As of the Kansas City SRM Annual Meeting, new applicants for CRMC must first meet the requirements of a CPRM, including the examination, before proceeding. The CPRM program of SRM functions both as a symbol and as a thing of substance. Just as the SRM works to strengthen professional standards for activities related to rangeland management, certification is a symbol of this noble effort. Certification is also a symbol of the continuing professional development that characterizes so many of our members, and the certificate on our wall is a further symbol. There is also substance: the screening of references, work history, and college transcripts are complemented by the need for continuing education and training that we carefully document, both for the benefit of our certified members and to answer any questions that may arise. Newly certified members are also subject to our thorough examination. Those who have obtained a graduate degree in range may feel that the advanced degree is warranty and symbol enough, yet SRM has many certified members with PhDs. We have used an analogy before, relating our certification to those observed in health care. We rely on and look for certification and registration among the doctors, nurses, and other health professionals we inevitably visit. In this and other realms in which we

Punishing not-for-profit

While a lively debate rages over the role of the private sector in the administration of punishment, this debate focuses nearly exclusively on for profit corporations, excluding the role that nonprofit organizations play. A study of the famous Massachusetts experiment in juvenile decarceration (in the early 1970s) and its aftermath provides information about how the nonprofit sector operates in juvenile justice. This information allows for an analysis of how reform rhetoric, and specifically the idealized concepts of ‘community-based’ and ‘nonprofit’, works in practice. ‘Community’ remains an under-theorized notion in criminology, and community-based treatment in Massachusetts often clones the disciplinary regimes of secure custody rather than play setting to less coercive forms of control that then link up informal with formal modes of social control. ‘Nonprofit’ evokes a number of positive images. However, the nonprofit contractors to the Massachusetts juvenile justice system behave in more complicated ways, displaying some characteristics in common with the for profit sector and some in common with the state bureaucracy. All of these qualities combine to create a unique dynamic of nonprofits, which I describe as ‘entrepreneurial bureaucracy’.

Does government funding alter nonprofit governance? Evidence from New York City nonprofit contractors

AbstractGovernment contracting has raised a collection of issues with respect to adequate oversight and accountability. This paper explores one avenue through which contracting agencies may achieve these tasks: through the governance practices of the contractor's board. Oversight and monitoring are a board's key responsibilities, and influencing a board's practices is one way a governmental agency can help to insure quality performance. Agencies could thus use both their selection process and their post‐contracting power to influence board practice. Using a new, rich data set on the nonprofit contractors of New York City, a series of hypotheses were tested on the relationship between government funding and board practices. Significant differences were found to exist in board practices as a function of government funding levels, differences that mark a shift of energy away from some activities (i.e., traditional board functions, such as fund‐raising) towards others (financial monitoring and advocacy). This suggests that government agencies may indeed use their contracting choices with an eye to particular governance practices. This increased emphasis on such activities appears to crowd out other activities, and is not unambiguously to the benefit of nonprofit board governance. © 2002 by the Association for Public Policy Analysis and Management.

Does Government Funding Alter Nonprofit Governance? Evidence from New York City Nonprofit Contractors

This paper explores the relationship between nonprofit board governance practices and government contracting. Monitoring by a board is one way a governmental agency can help to insure quality performance by its contractors. Agencies could thus use both their selection process and their post-contracting power to influence board practice. Using a new, rich data set on the nonprofit contractors of New York City, we test a series of hypotheses on the effects of government funding on board practices. We find that significant differences exist in board practices as a function of government funding levels, differences that mark a shift of focus or energy away from some activities, towards others. Trustees of nonprofits which receive high government funding are significantly less likely to engage in the traditional board functions, such as fund raising, while more likely to engage in financial monitoring and advocacy.