Building Service Networks: The Impact of Funding On Partnerships Among Non-Profits
Especially in tough economic climates, non-profit human service organizations are encouraged to partner to maximize administrative efficiency and integrate services. However, the funding environment may differentially shape how organizations develop administrative and service delivery partnerships. While resource scarcity may stimulate agencies to share administrative resources like space or funding, their front-line workers may be have limited time for coordinating services. New funding may stimulate service delivery partnerships (referrals and information sharing) as agencies expand programs, hire staff, and spend more time coordinating services (Provan & Milward, 1994), but reduce their dependence on their partners for administrative resources. This paper examines how administrative and service delivery partnerships evolve over time in response to funding increases. We expected that an influx of new funding will be associated with formation and strengthening of service delivery partnerships but will have no association with formation or strength of administrative (shared funding and space) partnerships. This study contributes to the emerging literature on network evolution, and policy strategies for integrating human service systems.
Capitalizing on a natural experiment, quantitative data were collected from 23 non-profit organizations in a single urban area that receive funding from a new county government-based fund for children’s behavioral health services. Data were collected at two time points, once in 2009 before the introduction of $40 million in new service funding and again in 2011, one year after. Network surveys were administered to executive directors to assess two types of service delivery partnerships (client referrals and information sharing) and two administrative partnerships (shared space and funding). We replicated the analytic approach used by Provan & Huang (2012) in UCINET 6. To test hypotheses about growth in the number of partnerships, the densities of the networks in 2009 and 2011 were compared using a paired samples t-test and a bootstrap procedure for estimating standard errors. To test hypotheses about partnership strength, we used the quadratic assignment correlation procedure.
The density of the referral network increased significantly from 44% to 72% (t = 4.22, p<.001) and the information sharing network density also increased significantly from 21% to 43% (t = 3.43, p<.01). The strength of referrals (r=.376, p<.00) and information sharing (r=.243, p<.00) partnerships in 2009 and 2011 were positively correlated. There were no significant differences in the densities of shared space and funding networks, but at the dyadic level, shared space (r=.623, p<.01) and funding (r=.223, p<.01) partnerships in 2009 and 2011 were positively correlated.
New funding differentially impacts service delivery and administrative partnerships. Service delivery partnerships increased and strengthened with new funding. New administrative partnerships did not form, but existing partnerships strengthened. Findings support emerging evidence that not all partnerships are the same (Provan & Huang, 2012) – and therefore do not respond similarly to policy strategies intended to promote partnerships. Increasing funding for services may lead to greater integration of service delivery functions, and deepen existing administrative partnerships. However, to spur the formation of new administrative partnerships as well, additional incentives may be needed.