Financial Performance of Private Child Welfare Agencies in Relation to Knowledge Sharing

Background/Purpose: The current study concerns the financial performance of private child welfare agencies (PCWAs), a topic of high policy/practice significance given fiscal-institutional and market pressures to enhance service quality and organizational effectiveness (Mosley & Smith, 2018). Research on public and nonprofit organizational performance has focused upon executive leadership and governance factors (e.g., performance measurement, strategic planning, cross-sector program innovation) (Lee & Nowell, 2015; Herman & Renz, 2008). However, little research on PCWAs has examined organizational knowledge sharing (i.e., structures and processes to enhance staff improvement, learning, and service delivery) as a determinant of organizational effectiveness and performance. Specifically, we hypothesize a positive agency-level relationship between knowledge sharing and financial performance.

Methods: A 2016 electronic survey was administered to executive-level managers of 414 PCWAs in six states. Administrators from 219 agencies responded (53%). Measurement of the dependent variable of financial performance involved a single Likert of agency financial performance in the previous year (1=Poor, 5=Excellent; Mean=3.3). The key predictor reflected 3 5-point Likerts concerning knowledge sharing in management and program practices (1=Strongly Disagree, 5=Strongly Agree; items included “We provide employees with information about best practices related to their jobs”, “We provide regular opportunities for staff to share knowledge about effective service delivery”, “We encourage staff to use research as part of their ongoing work” (Bryan, 2011). Given the high proportion of 4=Agree and 5=Strongly Agree responses, the key predictor was dichotomized, then recoded into a count of the number of Agree/Strongly Agree responses (Mean=1.9, Range=0-3). Multivariate ordinal logistic regressions with agency-clustered standard errors were conducted, controlling for fiscal-institutional (i.e., revenue predictability, involvement in performance-based contracting, involvement in capitation/managed care, nonprofit status, accreditation status) and organizational (i.e., agency revenue, staff size, service range) factors.

Results: Bivariate correlations demonstrated that relationships between variables were generally < 0.2. Multivariate estimates suggested that, as hypothesized, agency knowledge sharing was positively associated with financial performance (OR=1.7, p=0.001). Additionally, fiscal predictability was inversely related to financial performance: executives who assessed their PCWAs as less predictable over time were also those who suggested that their agencies were performing better financially (OR=0.7, p=0.02). Finally, greater revenue was positively associated with financial performance (OR=1.03, p=0.001). No other factors were statistically significant at p=0.05.

Conclusion/Implications: Acknowledging the cross-sectional study design and self-perceived executive-level survey measures, study findings suggest that financial performance in PCWAs is associated with (a) greater use of performance information and agency-based research and (b) less predictable fiscal environments. Concerning (a), findings suggest that organizational learning and quality improvement strategies may enhance service programming, thereby contributing to organizational effectiveness and accountability (McBeath & Austin, 2015). Implications for management/macro practice concern the importance of ensuring that evidence-informed practitioners are supported to engage consistently in knowledge sharing to promote service quality and program improvement. The finding in (b) suggests the need for future research concerning the possibility of “boom-and-bust” cycles in resource munificence, as different PCWAs adapt to service contracting contingencies over time and in different institutional settings (e.g., child welfare, behavioral health, heath care).