Public-private partnerships for social and human services: a case study of nonprofit organizations in Alabama.
Xu, Hua ; Morgan, Karen
INTRODUCTION
Public-private partnerships (PPPs) have become a popular topic with
scholars and practitioners as increasingly more public services are
being jointly produced and delivered by various combinations of
governmental and non-governmental organizations (Bult-Spiering and
Dewulf 2006, Yescombe 2007, Grimsey and Lewis 2007, Hodge, Greve and
Boardman 2011). PPPs have taken center stage as a vitally important
mechanism used to finance, build, operate and maintain public
infrastructure for many social and economic development projects
worldwide (Hodge and Greve 2005, European Commission 2004, Rubin and
Stankiewicz 2001, Grossman 2008, Hill 2003). The New Public Management
(NPM) movement has played a major role in the upsurge of PPPs through
encouragement of private sector involvement in privatization,
outsourcing and other market-oriented solutions for issues such as
administrative inefficiency and managerial control (Savas 2000). The
prevalence of PPPs has resulted in a "hollowing" state
(Milward, Provan, and Else 1993) and a reduction in the
"publicness" of public organizations (Bozeman 1987). Some
believe that the end result of PPPs has been a blurring of the
boundaries between the public and the private sectors (Rainey 2009).
While a large body of research on PPPs for capital programs has
been conducted (Akintoye, Beck and Hardcastle 2003, Grimsey and Lewis
2007, Vining, Boardman and Poschmann 2005), PPPs in the social and human
services areas are understudied. There are only a few comprehensive
studies that address both types of PPPs (Rosenau 2000). One may see that
the major advantages of using PPPs for public infrastructure are risk
transfer and the leverage of private financing. In contrast, PPPs for
health and human services are created to take advantage of the expertise
of private and nonprofit sectors in producing services and their
networks for delivering services. Successful capital program PPP models
do not travel well when attempts are made to transplant them in health,
human, and social services (Shaoul 2005). Some analysts argue that PPPs
are not appropriate for the public sector as these arrangements are
beset with a number of problems and often fail to deliver the benefits
promised at the outset (Wang 2009, IMF 2006). Others have recognized a
full range of problems with PPPs to include "the inapplicability of
the partnership model to most commercial transactions between government
and business, the risks of uncontrollable circumstances, the impact of
local resource constraints, and barriers to transparency in long-term
contracts" (Bloomfield 2006). In spite of such deep-seated
reservations, these arrangements are as popular as ever; this piqued our
curiosity. Why do PPPs continue to be created? What makes them so
enduring in so many cases? How do collaboration and networks fit into
the equation?
LITERATURE REVIEW
PPPs, Intersectoral Networks and Collaboration
The PPP concept evolved over time (Wettenhall 2005). Generally,
PPPs can be regarded as arrangements in which "different parties
who see different aspects of a problem can constructively explore their
differences and search for solutions that go beyond their own limited
vision of what is possible" (Gray 1989: 5). Other schools of
thought considers the "ideal type of partnership" to be
characterized by mutually agreed objectives; a shared understanding of
the most rational division of labor based on advantages for each
partners; mutual respect; equal participation in decision making; mutual
accountability; and transparency (Brinkerhoff 2002). In addition, Kanter
(1994) offers another perspective by creating a hierarchical typology of
PPPs which includes, from the lowest to the highest, "strategic
integration", "tactical integration", "interpersonal
integration", and "cultural integration". From an
economic perspective, the pursuit of comparative advantages of different
sectors is the key motive for forging intersectoral PPPs (Osborne and
Gaebler 1992). Yet, public-private partnerships mean different things to
different people; over time, PPPs have gradually come to be associated
with a diverse array of related concepts such as networks and
collaboration. For instance, Hodge and Greve (2007) define PPPs with
both loose financial and loose organizational relationship as
"issue networks". In this case, these two concepts share a
number of similarities which have enabled analysts to use them
interchangeably. In another case, collaboration is regarded as one form
of partnership (Schlechty and Whitford 1988). Some would argue that they
are not, however, synonymous (Vigoda-Gadot 2003).
In fact, despite these differences in nomenclature and emphasis, it
will be enlightening to incorporate pertinent literature on networks and
collaboration as a lot of work that has been done on these topics is
closely related to PPPs (Kickert, Klijn, and Koppenjan 1997, Mandell
2001, Agranoff and McGuire 2003, Rethemeyer 2005). From a network
perspective, partnerships and networks are utilized simultaneously in
inter-organizational relations (Hannan and Freeman 1989). In a public
management context, a network may be defined as a "structure of
interdependence involving multiple organizations or parts thereof, where
one unit is not merely the formal subordinate of the others in some
larger hierarchical arrangement" (O'Toole 1997: 45). Through a
network perspective, governmental, private and nonprofit partners can be
seen as both interdependent and as independent components of networks.
Such arrangements are often described as informational, developmental,
outreach or action networks (Agranoff 2007). Alternatively, they are
called issue, policy or collaborative networks (Helco 1978, Rethemeyer
and Hatmaker 2008). Some network theories certainly seem applicable for
instance. Berry, et al. (2004) identified three network traditions:
social networks, policy change and political science networks, and
public management networks. Effectiveness in network governance occurs
as the result of such elements as "shared governance,"
"lead organizations" or "network administrative
organizations" (Provan and Kenis 2008). As might be expected, there
are significant differences in management orientation for different
types of networks: nonprofit networks are invariably community-oriented
just as governmental networks are generally bureaucratic-oriented while
private commercial networks are almost always entrepreneurial-oriented
(Herranz 2007).
According to Merriam-Webster (2011), collaboration simply means
"to cooperate with an agency or instrumentality with which one is
not immediately connected." In a PPP context, collaboration means
cooperation with external organizations or parts. In other words,
collaboration is two or more organizations working together toward a
common goal. In studying collaborative family services in Georgia and
Vermont, Page (2003) identified five key elements in collaboration:
"(1) agreeing to work together, (2) planning, (3) assessing
progress, (4) improving performance, (5) allocating and mobilizing
resources". Effective collaboration is the goal in both simple
partnerships and complex networks of partner organizations. In response
to a high degree of environmental complexity and uncertainty,
organizations become highly differentiated and highly integrated.
According to this conceptual framework constructed by Axelsson and
Axelsson (2006), only a high degree of vertical and horizontal
differentiation requires a high degree of integration; under such
conditions, collaboration is required, rather than a lesser-encompassing
strategy such as cooperation, coordination or contracting. Multisectoral
involvement complicates collaboration and can determine the extent of
collaboration.
Meanwhile, it is noteworthy that PPP theories are drawn from
several disciplines. Certain economic theories may also apply to PPPs.
Such concepts include transaction costs (Williamson 1981, Boardman,
Poschmann, and Vining 2005, Vining and Boardman 2008) and decision
making (Simon 1976). Agency theory assumes that parties are rational and
opportunistic; contracts may be used to overcome misalignment of
interests and to reduce information asymmetry (Jensen and Meckling
1976). Economic perspectives offer important insights for the practices
of PPPs (Sadka 2006, Grimsey and Lewis 2005). In addition, several
schools of organization theory also seem applicable to the study of
PPPs. For instance, institutionalism and theories related to
organizational environments, such as open systems theory and resource
dependence theory, can inform our understanding of PPPs (Shafritz, Ott
and Jung 2010).
Past Empirical Research on PPPs
Like PPP research on capital projects, past studies of health and
social services PPPs often make use of qualitative methods to include
case studies and in-depth probing (European Commission 2004, Vining,
Boardman and Poschmann 2005, Smith and Wohlstetter 2006). Many studies
focus on government and nonprofit organizations at the local level
(Gazley 2008). Smith and Wohlstetter (2006) developed a typology in
order to provide a framework for the ongoing study of PPPs and networks
in California charter schools. These researchers sorted interview data
across four categories: (1) origin refers to the circumstances under
which PPPs are created; and (2) form is defined according to whether a
formal agreement exists for the partnership. Gazley (2008) found a large
proportion of government-nonprofit collaboration in Georgia operating
without a formal agreement; (3) content pertains to the resources
provided by each partner and can be financial, human, informational or
managerial; and (4) depth which concerns the level of shared governance
and is determined through identification of organizational members
actively involved in the PPP. Just as Sowa (2008) classified interagency
collaboration into "shallow collaboration", "medium
collaboration", and "deep collaboration," similarly, PPPs
can be classified according to the typological criteria outlined above.
In other words, resource-sharing, information-sharing, power-sharing and
even profit-sharing can be important criteria for PPPs.
Radically different from the leadership in a closed system,
hierarchical structure, some research suggests that PPP leadership
requires shared governance, "consensus-oriented decision
making" (Ansell and Gash 2008: 543), "depersonalized
leadership techniques" (Page 2003), and "soft guidance"
(Agranoff 2007). PPPs, as in network settings, require collaborative
leadership. "It is conceivable that the collaborative leader must
exhibit behaviors that are substantively different than practices in a
hierarchical setting." Such differences relate to teamwork,
resources, understanding, stakeholder support, and trust (Silva 2011).
The empirical literature also suggests that PPPs should emphasize
accountability and transparency. PPPs may cause what is called
"diffusion of accountability" (Agranoff 2007). Establishment
of performance measures and implementation of performance management in
a partnership setting is challenging. As in a network setting,
performance evaluation criteria should be made at different levels and
for each different partnership program. PPPs present a different set of
transparency issues from programs administered by individual
governmental and nongovernmental agencies. Information disclosure and
audits may not be required for less formal PPPs. On the other hand,
parties to contractual PPPs are increasingly expected to have contract
management expertise.
In her survey of local governments in Georgia, Gazley (2008) noted
that PPPs tended to be concentrated in several service areas including
social, health, and human services, public safety, emergency response
and economic development. Further, she found a trend toward informal
agreements which resulted in "more frequent exchange of
information, sharing of volunteers, joint recruitment of staff and
volunteers, and nonprofit service on a public board." Formal
contractual agreements for activities involved government funding,
information exchange and equipment which would certainly make sense in
terms of compliance with federal accountability regulations. Government
agencies overall provided the bulk of financial, material and human
resources in almost all PPPs studied; public managers maintained a
fairly high level of control within all PPPs. Gazley emphasizes that
staff are much more likely to be shared in the context of informal,
non-contractual arrangements, a large number of which have been in place
for many years and are characterized by many respondents as
"longstanding relationships." Indeed, these seemingly
institutionalized arrangements range from nine to twenty-four years and
are treated as "implied contracts." Gazley's detailed
study indicates that factors such as trust, a certain level of
environmental stability, institutional capacity, shared governance and
quality of leadership all matter in a collaborative network setting.
An Integrated Framework
Based on the above literature review, it is clear that a more
comprehensive framework of PPPs should incorporate the intersectoral
network and collaboration perspectives and the findings from the
empirical research. To synthesize these different perspectives,
apparently, one assumption is needed. It is assumed that PPPs are those
networks and collaborations that involve both public and private
sectors. A tentative integrated framework for better understanding of
PPPs will include the following dimensions and elements that are
summarized in the following table:
A comprehensive model of PPPs should examine the characteristics of
PPPs, organizational factors of PPPs, characteristics of individual PPP
organizations, key management issues and major complicating factors that
bring additional complexity to PPPs. It is clear that characteristics of
PPPs include origins and motivations of creating and sustaining PPPs,
forms, content, depth, and durability/length of PPPs. Organizational
factors include the leadership, governance, and social capital in the
PPPs. The characteristics of individual participants in the PPPs,
including goals of participating organization's operations and
organizational strategies, also matter. Complicating factors for PPPs
are types of services provided through PPPs, number of participants and
stakeholders, degree of differentiation and integration, and
environmental variables. Management issues such as accountability and
transparency are constant challenges for PPPs. Additional insights can
be gained through borrowing from other fields, including economics,
sociology, and organization theory.
RESEARCH QUESTIONS AND RESEARCH DESIGN
Though there are various types of PPPs for various services and
programs in Alabama, there is a dearth of research on PPPs in social and
human services. In fact, there is far more literature available on PPPs
for large infrastructure projects in Alabama than for smaller scale
partnerships. As an example, the Alabama Department of Transportation
funded an extensive survey on large scale partnerships in other states
when exploring the possibility of using PPPs to fund highway projects.
(Cui et al. 2010) It is interesting to note, however, the wide variety
of arrangements that call themselves PPPs in Alabama. Among these are a
power company that provides interest-free loans to small businesses to
be used for investing in energy-saving technologies and a private
company that operates the water and sewage system for a city government.
(DSIRE 2011, Seven Trent Services 2011)
We focused our research on Alabama partnerships established between
government agencies and nonprofit organizations. Applying the framework
developed by Smith and Wohlstetter (2006) and knowledge culled from
relevant theories of intersectoral networks and collaboration, we seek
to answer the following research questions:
--What are the forms and content of PPPs in Alabama?
--How "deep" are these PPPs?
--What are the motivations in creating and sustaining these PPPs?
--What role did organizational factors such as leadership play in
PPPs?
--How important are some key managerial factors such as
accountability, shared governance, and performance measurement to the
success of PPPs?
--How have the current economic condition and other environmental
factors affected the strategies and operations of these PPP
organizations?
Qualitative methods were utilized in this study, to include both
case studies and archival research, so as to expand our understanding of
the issue. Given the exploratory nature of the study, the case study
approach, which is popular among social scientists, is a suitable
approach. (Yin 2009) The research process is divided into two stages.
First, we developed a questionnaire which we sent via electronic mail to
representatives of organizations identified as members of Alabama social
and human services PPPs. Individuals from seven government
organizations, eight nonprofit organizations and three private companies
received our communique. However, there were only a total of five
organizations that responded to our survey. The survey was not as
successful as we expected in view of the fact that these returned
surveys were mostly incomplete. During the survey, however, four
nonprofit organizations expressed their interest in participating in an
in-depth study. We subsequently conducted four follow-up case studies in
an effort to gather more detailed data on these PPPs. The data were
obtained through the correspondence with some of the staff members in
these organizations and are supplemented by the archival research
including the information and documents posted on their websites.
We believe these nonprofit organizations, though limited in number,
are fairly representative of the public-private partnerships for health,
human and social services in Alabama. Among these four nonprofits
organizations in our sample, two are engaged in providing vocational or
recreational services to disabled individuals, one deals with the
education and services on early childhood care, and the fourth one
provides care for family violence victims. These organizations have
different lengths of history and the establishment of these
organizations took place under varied circumstances. Each organization
is over four decades old except for one that is relatively young. Two of
them were independent, although they were originally established as a
local chapter under the umbrella of a national organization. The other
two were established locally and only operate in the confines of
Alabama. Moreover, they are of different organizational sizes and
provide a range of services. Two are medium-sized with branches
statewide, whereas the other two are relatively small and provide only
very limited types of services to local communities.
FINDINGS AND DISCUSSIONS
In this section, we first present a brief profile of each of the
four nonprofit organizations, followed by an analysis of these
organizations applying the integrated framework that incorporates
intersectoral network and collaboration perspectives, and then we
discuss the findings in terms of research questions and theoretical
relevance on PPPs based on these case studies.
NPA in PPP 1
NPA was established in 1926 as the local chapter of one of the
leading national nonprofit organizations specialized in assisting
individuals with autism, developmental, physical and mental
disabilities, and special needs. Compared to the other three
organizations included in this study, NPA has the longest history. Over
the past eighty-five years, it expanded to provide a wide range of
services to adults and children with disabilities and special needs,
including medical rehabilitation, job training and employment, child
care, camping and recreation. In 2008, it served over 20,000
individuals. It is headquartered in Montgomery with eight community
rehabilitation program sites throughout Alabama and one in the panhandle
of Florida. It is governed by a board consisting of 20 members. Its
Birmingham office, probably its largest branch, has 19 employees. In
view of this, one estimate of its total number of employees is between
50 and 100, making it a medium-sized nonprofit organization. It main
sources of funding include contracts and grants from federal, state and
local governments, contracts and grants with state and local private
organizations, private donations, and product sales. It partners with
other programs such as Senior Community Employment Program and Certified
Nurse Assistant Program. Essentially, it bridges the gap between
government funding and private companies in providing training
opportunities for the handicapped.
NPB in PPP 2
NPB was incorporated in 1968 as a 501(c)(3) organization. It is
mainly funded by sales of donated goods and government contracts on job
training and workforce development. Its mission is to "provide
training, vocational rehabilitation and employment opportunities for
people with disabilities or other vocational problems which result in
barriers or limitations to competitive employment". It is governed
by 20-member board of directors and a four member executive committee.
It employs over 200 people, with seventy-five percent of its work
performed by persons with disabilities. It has several contracts with
local federal government agencies and with Alabama Department of
Rehabilitation Services (ADRS). It owns nine retail stores across the
state. The revenue from retail sales represents about 60% of its total
revenue. Relatively speaking, NPB is more financially independent of
government and enjoys a high degree of autonomy because it does not
heavily rely on government contracts.
NPC in PPP 3
NPC was created in the late 1970s as the result of a merger of two
organizations that provided similar social services in Alabama. Its
primary mission is to assist abused and neglected children and protect
battered women against family violence. NPC is one of the organizations
that rely heavily on federal grants such as funds from Department of
Housing and Urban Development (HUD) and Department of Justice. It is a
medium-sized nonprofit organization with 46 full-time and part-time
employees. Some of NPC grants are obtained through partnerships with
state agencies such as Alabama Department of Public Health. NPC
implements grant projects through partnerships with other
community-based organizations.
NPD in PPP 4
NPD, which was created in 2000, is a relatively young nonprofit
organization. NPD is an organization funded largely through contracts
with the state government. NPD has seven paid staff. It has gained the
support from a wide range of stakeholders including "government
officials, service providers, advocates and business leaders" since
its inception. With a state and local focus, its 27 member board of
directors includes nine state agency heads serving as ex-officio and a
number of community-based partners and business leaders. To secure its
support from the state government, the agency has 17 board members
appointed by the Governor, Speaker of the House of Representatives, Pro
Tempore of the Senate, and the NPD Executive Committee. Its mission is
to "work in partnership with other public and private entities to
maintain an effective state and local system of resources and support
that enables parents, families, and others who care for young children
to ensure that they are healthy, protected, nurtured, and offered every
opportunity to succeed in life". NPD has four major programs,
including the Teacher's Education and Compensation Program, Family
Community Partnerships, State and Local Initiatives, and Public
Awareness. Most of its funding comes from government, particularly from
the state government in form of contracts and grants (78%).
Analysis and Discussions
Despite of the funding from government, these four nonprofits in
the PPPs enjoy a high degree of autonomy, while securing resources and
support through their boards of directors. These organizations tend to
work with community-based organizations in providing services. Our
research indicates that the United Ways are the common funder for many
of these local nonprofit organizations including NPB and NPC. Faced with
shrinking revenue from government contracts and grants, increasing
private donations have become an important measure to maintain revenue
stability and alleviate the revenue shortfalls. In the meantime, these
nonprofit organizations tend to diversify their revenue and business.
It is apparent that these nonprofit organizations are embedded in a
network that consists of funders, governmental and non-governmental,
service providers, and clients/beneficiaries. Take NPB for example. If
applying the network perspectives, the NPB is embedded in a network
which is composed of administrative and regulatory agencies,
professional associations, funders, and partners. Through the network,
NPB is not only connected to ADRS, but also several other organizations
including Commission on Accreditation of Rehabilitation Facilities, the
United Way, National Industries for the Severely Handicapped, Goodwill
Industries International, Inc., and the Better Business Bureau. Its
pair-wise links to these organizations in its network vary considerably,
from grantee-grantor, to regulatee-regulator and to peer-peer. Some of
these links are tight partnerships and are bound by contracts and
regulations, while others are loose partnerships, or simply
relationships that are not formalized. In terms of content, its
partnerships with other organizations are rather limited if applying the
framework developed by Smith and Wohlstetter (2006) as the only
substantive partnership it involves is the exchange of financial
resources with ADRS. In fact, we can see the limitations of this
partnership framework, making the network perspective a more
comprehensive framework that captures various kinds of content exchanged
among multiple organizations. In addition, the "issue network"
perspective is relevant in this case study. Our evidence suggests that
NPA has been actively lobbying and advocating for the welfare of its
beneficiaries. It is apparent that the two organizations, NPA and NPB,
may compete in some areas for government contracts and grants, and are
in the same "issue network" in promoting the interests of
their beneficiaries in the state government. Nevertheless, the focus of
our study is on the public-private partnerships.
Forms, Content, Depth, and Motivations of PPPs
These three questions are discussed collectively as they are
closely interrelated. The discussion of content of PPPs can hardly be
separated from the discussion on the depth of PPPs. The motivations for
creating and maintaining PPPs are directed related to the content of
PPPs or the different types of resources shared through PPPs. Based upon
the returned questionnaires and case studies, we offer the following
tentative general findings on these questions. As we expected, Alabama
PPPs in areas of social and human services are created for a range of
purposes including the dearth of critical financial, human,
informational, referral and other organizational resources. As Osborne
and Gaebler (1992) posit on the comparative advantages of the public and
private sectors, the resources and strengths of these PPP nonprofit
organizations complement government. In all cases, there were evidently
financial resources exchanged between the public sector and the
nonprofit sector via contracts and grants. Most of these
resource-sharing is unidirectional. That is, the state government
provides funding to nonprofit organizations through contracts and
grants. In one case, there was more than just sharing financial
resources. For some of the state grants, "not only does the state
financially support these contract services but state and non-profit
employees provide them side by side." For instance, NPC family
violence assessors and housing and independent living specialists share
the same building as Alabama Department of Human Resources.
Another example is its One Stop Family Justice Station where
NPC's employees and state employees including police personnel,
district attorneys, and state legal services work jointly to provide
one-stop integrated services to the victims of family violence.
Partnerships proved to have helped achieve better results by sharing
physical and organizational resources such as facilities in order to
provide more convenient services to customers and achieve cost savings.
The partnership between NPC and state agencies embodies the
"operational integration", with a "formal agreement"
and "multi-level involvement". (Kanter 1994, Gazley 2008,
Smith and Wohlstetter 2003) In another case, the organizational
spokesperson indicated that the partnership "was established to
serve as a referral source for families looking for resources for those
with disabilities. Relationships have been established to enable
training opportunities for various programs offered at the many
facilities like Senior Community Employment Program, Certified Nurse
Assistant Program that requires public-private cooperation to provide
real-world experience and benefits to those with
'disabilities' (both physical and social)." Another
example is from NPA and NPB both of which receive referrals from state
agencies, e.g., ADRS. This partnership clearly involves the sharing of
informational resources. However, there are some differences. NPA
collaborates more extensively with many other organizations that provide
training opportunities; NPB collaborates more closely with state
agencies in executing its contracts with them. NPD and NPC directly work
with state agencies.
The results of our research appear to highlight the importance of
environmental factors, especially community need and the scarcity of
resources for creating PPPs. One of the nongovernmental organizations
indicated that "those partnerships can in part be attributed to the
social environment and the demands of the community. Many affiliate
locations, however, have historically offered on-the-job training and
placement programs and collaborate with community business to place
individuals with disabilities." In fact, it seems that the level of
need and the availability (or lack) of resources dictate both the
service to be provided as well as the form of the partnership itself.
Fiscal stress provides further impetus for the creation of PPPs. We also
found that long-term and in-depth partnerships are the key to growth and
expansion of PPPs. One of the respondents explained that a
well-established partnership allows agencies to create "satellite
offices" to be "housed at the various affiliate locations
across the state."
Leadership, Goals, and Culture of PPP Organizations
As suggested earlier, PPP leadership requires collaborative
leadership that is characterized by shared governance,
"consensus-oriented decision making" (Ansell and Gash 2008:
543), "depersonalized leadership techniques" (Page 2003), and
"soft guidance" (Agranoff 2007). Our research found that the
leadership of these nonprofit organizations largely determines the types
of PPPs and sets the directions for these PPPs. For example, prior to
her job at NPD, the Executive Director of NPD worked for Department of
Human Resources on similar programs related to child care. Undoubtedly,
her experiences and connections in the state government in human
services have directly benefited the organization. Unlike several other
nonprofit organizations, she particularly emphasizes sharing governance
with the state government by including nine state agency heads as
ex-officio board members. Shared governance, which is critical for
effective PPPs, is mainly realized in joint decision-making and
consultative process in strategic planning and program management.
Without exception, shared governance is achieved through representation
in board of directors in our case studies. Our case studies indicate
that having government officials serve on boards of directors in
nonprofit organizations in the PPPs is a common way to achieve shared
governance. This approach is not only an effective way to promote
understanding of the stakeholders in the public sector and win their
support and, but also is important for building mutual trust in PPPs.
In addition, regardless of the disparities in organizational size
and history, the leadership in the participating organizations of the
PPPs we studied appeared to be rather stable, which is a favorable
condition for maintaining and fostering PPPs. It is found that nonprofit
organizations in PPPs consciously delineate its goals and mission
broadly. In grant applications, NPD ensures its goal is shared by the
government agencies and its program procedures meet the requirements of
the grants. Apparently, one of the strategies of NPD is to make its
mission flexible enough so that it can mobilize maximum amount of
resources in achieving its goals.
Organizational culture is another variable that are indirectly
related to PPPs. Like many other nonprofit organizations, the
organizations in the case studies often prefer family-friendly policies
such as flexible schedules. The nonprofit sector seems to require a
different personnel as our research suggest that the majority of the
staffs of these organizations are women. The application of information
technology is found in these organizations websites. One of the staff
members of NPD admits that there is great potential benefit from
applying more information technology in its operations and fund raising
activities. For instance, an online donation link can be added to its
existing website at minimal cost. However, this is a tentative idea,
which will need a more comprehensive cost-and-benefit analysis before
being adopted.
Environments and Strategies of PPP Organizations
The current prolonged economic recession resulted in reduced
government funding for social and human services, which in turn created
financial difficulties for those PPP nonprofit organizations that rely
heavily on government funding. The current dire fiscal condition in the
state government and several budget reductions over the past three years
posed economic hardships to many nonprofit organizations. In fact,
discretionary spending on social services was prone to budget cuts in
many state governments. For instance, NPD suffered a loss of $33,000 in
funding from Alabama's Children Trust Fund in 2010 due to the
state's tightened budget. To adapt to these challenges, NPD started
to seek for more non-governmental resources such as private donations.
In fact, these organizations have been taking measures to cope with
these challenges. Two of the organizations in the case studies adopted
different strategies. Faced with declining funding from the government,
NPC recognized the importance of increasing private donations and funds
and created a position of director of development to raise more private
funds. In addition, it made efforts to obtain more in-kind donations and
volunteers to achieve more savings. By contrast, NPA took different
measures. As described by one of its staff, "as federal and state
funding becomes limited, many [NPA] affiliate offices are looking for
areas of opportunity to provide a for-profit service that is in line
with the organization's mission."
Interestingly, our findings differ from the general view that
within PPPs, the nonprofit entities are dependent upon the public agency
for funding (Herranz 2007). Instead, we found that nonprofit
organizations are not only community-oriented but are also
entrepreneurial, often diversifying revenue sources and exploring
opportunities. As one of the respondents explained, "The
relationship with [the state agency] is certainly important as the
referrals serve as a key funding source. However, many affiliate
locations have worked to diversify their funding sources by
incorporating 'for-profit' opportunities within their service
provision. Specifically, private corporations may outsource their work
to an affiliate location with workers needing 'work
experience' and pay those employees fair wage rather than hiring
full-time staff and incurring the cost of paying benefits, etc.
Additionally, the organization has an affiliate that operates a thrift
store that also provides an avenue for added funding." This
evidence not only suggests that PPPs involve multiple organizations from
different sectors but also confirms that PPPs are sometimes created
solely for the purpose of taking advantage of certain opportunities.
Lastly, we also found that some of the nonprofit organizations in
these PPPs build political coalitions with peers in advocating the
interests and agenda of the program beneficiaries. For instance, NPC
strategically formed alliances with other nonprofit organizations and
state agencies that share similar interests in order to cope with the
changed budget priorities in the government and secured continued
funding from the state government. This is especially important for
those organizations whose continued funding for programs and services
were threatened by budget cuts in government.
Accountability and Performance Measurement in PPPs
As predicted, PPPs create the intractable problem of
"diffusion of accountability" (Agranoff, 2007). Our research
found none of these organizations in our study has explicitly
implemented a comprehensive outcome-based performance management and
evaluation system for the PPPs to promote accountability. We did not
have access to the contract documents of these PPPs during the research.
But it is safe to assume that some forms of input or output performance
measures like cost and workload indicators are included as a part of the
contractual terms. In a PPP setting, performance evaluation criteria are
expected to be applied at different levels and for each different
partnership participants. PPPs present unique transparency issues from
programs jointly administered by individual governmental and
nongovernmental agencies. In our case study, the complex nature of the
programs at NPD made program evaluation and performance measurement
difficult. As in many other nonprofit organizations, NPD's records
show that past attempts such as a survey to determine its parenting
training program beneficiaries were not very successful due to lack of
user participation. However, having a serious performance measurement
and feedback system will be favorable to win more support from funders
and donors. A related issue is transparency in the PPPs. We did not find
much detailed information on the grants and contracts that are central
to PPPs. To enhance accountability and transparency, increased
information disclosure and audit requirements are warranted for these
PPPs.
CONCLUSION
Our analysis suggests that any quest to comprehend PPPs can benefit
from drawing on knowledge of network perspectives and intersectoral
collaboration. Careful attention to multiple theoretical frameworks
offers more avenues for understanding how multivariate PPPs work. A
review of past research emphasizes distinctive intricacies such as
shared governance and a very particular sort of leadership that are
unique to PPPs. Our research effort, while small in scope, serves to
advance our knowledge of Alabama PPPs through the suggestion that they
are both community-oriented and entrepreneurial, particularly when faced
with financial challenges. In particular, our research provides
important insights on the PPPs in key social and human services. Our
qualitative research seems to imply that long-term partnerships and
relatively stable operating environments foster both the depth and the
growth of PPPs.
One possible direction for future research would be to compare
capital and infrastructural PPPs with those developed in the social,
health and human services realm, particularly with regard to the
constitution of effective leadership. On the other hand, recognizing one
of the limitations of the current research that the focus is on
nonprofit organizations in PPPs, future research should investigate into
the role of management and leadership of the government agencies in PPPs
in order to generate more insights on PPPs by hearing "the other
side of the story". This will likely identify the key differences
concerning the motivations and concerns of stakeholders in the public
and private sectors and find effective ways to overcome these
differences and barriers in creating and sustaining PPPs.
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HUA XU
KAREN MORGAN
Department of Political Science and Public Administration, Auburn
University at Montgomery
(1) The authors also appreciate the valuable suggestions from the
two anonymous reviewers and would like to thank the editors for the
opportunity to participate in the symposium and Tom Vocino for his
timely help with the editing of the manuscript.
Table 1
An Integrated Framework for Public-Private Partnerships (Part 1)
Dimensions Elements Scope and Variations
Characteristics Origins and i. How they were created: role of
of PPPs Motivations funders and founders, new
projects/grants/endowments, mergers,
etc.
ii. Motivations: fiscal exigency,
government mandates for privatization,
comparative advantages (Osborne and
Gaebler 1992) and complementary
organizational resources,
collaborations for win-win.
Forms i. Formal or informal agreements
("implied contracts") (Smith and
Wohlstetter 2006, Gazley 2008).
ii. Binding or non-binding;
Contractual or noncontractual terms
Content i. Exchange of "financial resources"
(funding), "human resources",
"physical resources", and
"organizational resources" (Smith and
Wohlstetter 2006); informational
(information exchange), and
managerial.
ii. Social networks, policy change and
political science networks, and public
management networks (Berry et al.
2004).
Depth i. "One-level involvement",
"multi-level involvement" (Smith and
Whohlstetter 2006)
ii. "Shallow collaboration", "medium
collaboration", and "deep
collaboration" (Sowa 2008);
iii. Collaboration, cooperation,
coordination, contracting (Axelsson
and Axelsson 2006);
iv. "Strategic integration", "tactical
integration", "interpersonal
integration", and "cultural
integration" (Kanter 1994)
v. Level of shared-governance:
information-sharing, resource-sharing,
power-sharing, profit-sharing;
vi. Depth measured by five key
elements in collaboration: "(1)
agreeing to work together; (2)
planning, (3) assessing progress; (4)
improving performance; (5) allocating
and mobilizing resources" (Page 2003);
vii. Substantive partnership,
superficial partnership.
Durability Long-term, stable, sustainable,
"longstanding" partnerships (Gazley
2008), short-term, unstable,
unsustainable, ad hoc partnerships.
Table 2
An Integrated Framework for Public-Private Partnerships (Part 2)
Organizational Leadership Leadership should be different
Factors of PPPs from that in hierarchical
organizations, "collaborative
leaders" (Silva 2011),
"depersonalized leadership
techniques" (Page 2003), "soft
guidance" (Agranoff 2007).
Governance i. Shared Governance (Provan and
Kenis 2008);
ii. Joint decision-making,
"consensus-oriented decision
making" (Ansell and Gash 2008);
iii. "Lead organizations" (Provan
and Kenis 2008).
Social Capital Commitment, mutual trust, etc.
Characteristics Goals of Governmental organizations,
of PPP Participant's nonprofit organizations, or
Participants Operations private companies.
Organizational "Community-oriented",
Strategies "bureaucratic oriented", and
"entrepreneurial-oriented"
(Herranz 2007).
Complicating Types of Public infrastructure and capital
Factors for Services projects (Boradman, Poschmann and
PPPs Vining 2005); health and social
services, public safety,
emergency management, economic
development (Gazley 2008).
Environments/ Social and economic conditions
Contexts
Number of Two organizations, or multiple
participants participating organizations.
and
stakeholders
Number of Two sectors, or multiple sectors.
sectors
Degree of Specialization, division of
Differentiation labor, coordination
and
Integration
Management Accountability i. Forms and elements of
Issues in PPPs and accountability--fiscal
Transparency accountability, process
accountability (legal and
procedural accountability or
compliance with laws and
regulations), program
accountability (efficiency and
economy) (Kettl 2011);
ii. "Diffused accountability"
(Agranoff 2007).
Key Perspectives iii. Performance measurement and
to Understanding evaluation, auditing, etc.
PPPs
Public Administrative reform, including
Administration market orientation,
privatization, and contracting
out: Reinventing Government
(Osborne and Gaebler 1992), New
Public Management and
"administrative values" (Hood
1991).
Economics Comparative advantages; agency
costs (Jensen and Meckling 1976),
transaction costs (Williamson
1981), etc. Social capital,
mutual trust, etc.
Sociology i. Rationality and decision
Organization making (Simon 1976)
Theory
ii. Institutionalism
iii. Open systems, the ecological
view, resource dependence theory,
and other environmental
perspectives of organizations.
