The Relationship Between Perceived Interorganizational Competition and Public Funding Dependency Among Private Child Welfare Agencies
This paper examines two research questions concerning interorganizational competition (IOC): (1) What level of IOC (for public funding, private funding, staff, and clientele) is perceived to exist among private child welfare agencies?; and (2) What factors related to agencies’ demographic characteristics, community contexts, and reliance upon government funding are associated with perceived IOC? Despite anecdotal suggestions that levels of IOC in the human service sector have risen over the past few decades due to decreased public funding and increased entry of for-profit firms (Smith, 2010; Smith & Gronbjerg, 2006) and that IOC in child welfare may influence nonprofits’ ability to deliver community programs, retain staff, and public advocacy efforts (Mosley & Ros, 2011), no study has identified the sequelae of IOC in the private child welfare sector.
These questions were examined through analyses of data from the National Survey of Private Child and Family Serving Agencies (NSPCFSA), which provides multi-state data on the organizational constructs under investigation. NSPCFSA gathered data from 446 nonprofit and for-profit agencies currently serving child welfare populations; agency directors completed an online survey between May-June 2011. The current study sample was restricted to 367 agencies with full information available for analysis. The dependent variable (IOC) was an average of four Likert-type survey items pertaining to directors’ perceptions of the degree of competition for public funds, private funds, staff, and clientele with other local private child welfare agencies (alpha = 0.78). Multivariate ordinal logistic regression models with robust standard errors were used to examine the relationship between IOC and factors pertaining to organizational demographics (e.g., age, staff size, budget size), community context (e.g., rural, suburban, urban), and involvement with public contracting (e.g., revenue from public service contracts).
Descriptively, the average level of IOC was 3.36, corresponding with a rating between “some competition” and “frequent competition”. Multivariate analyses determined that the level of perceived IOC was negatively associated with agency location in a suburban area (OR=0.65, p=0.04). In contrast, perceived IOC was positively associated with agency age (OR=1.01, p=0.004), the percentage of revenue from government child and family service contracts (OR=1.01, p=0.019), and the number of programmatic areas in which the agency had contracts with the public child welfare agency (OR=1.13, p=0.002).
Drawn from a political economic theoretical framework emphasizing the influence of public funding patterns on IOC (Hasenfeld, 2010), this paper finds that perceived levels of IOC are principally associated with private agencies’ dependency upon and involvement in different forms of contracting to provide child and family services. These findings reinforce expectations derived from resource dependency and network theory (Garrow & Hasenfeld, 2010), and imply that levels of IOC in any private human service market may be influenced as much by agencies’ shared reliance upon a particular funding stream (and shared institutional niche space) as by organizational characteristics or location. These results highlight the need for research concerning the consequences of public resource dependency and IOC on private agencies’ ability to deliver effective child welfare services and attain desired client outcomes.