The Effect of Government Contracting on Nonprofit Human Service Organizations: Impacts of an Evolving Relationship

Never, Brent; Leon, Erwin de

doi:10.1080/23303131.2014.896300

Cited by 15 publications

(7 citation statements)

References 26 publications

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“…Their results indicate that government funding reduces organizational autonomy among these particular organizations. In a study of human service nonprofits, Never and de Leon () find similar results with regard to the relationship between government funding and financial autonomy: the presence of government funding seems to limit financial autonomy with respect to decisions about how to allocate revenues, particularly decisions about increasing salaries and spending organizational operating reserves.…”

Section: Nonprofit Cash Holdingsmentioning

confidence: 78%

Nonprofit cash holdings and spending: The missing role of government funding

Lee

Woronkowicz

2018

Nonprofit Mgmnt & Ldrshp

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Charitable nonprofit organizations have long been under scrutiny with regard to how they manage excess funds, particularly cash holdings. Given previous empirical evidence, agency problems have been treated as an effective lens to explain the consequences of cash holdings among nonprofits. That is, nonprofit managers spend cash holdings for their own interests as opposed to the social interests of the organization. This study revisits the question of how charities manage extra cash and further examines the role of government funding in nonprofits' spending decisions. The results suggest that nonprofit managers make decisions on how to manage extra cash in accordance with the level of cash holdings; therefore, agency problems do not effectively explain how nonprofits manage extra cash. Furthermore, the results illustrate two contrasting roles of government funding in nonprofits' financial behavior: government funding may be used to monitor unscrupulous behaviors among managers, but it may also restrain nonprofits from investing in human capital.

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Section: Nonprofit Cash Holdingsmentioning

confidence: 78%

Nonprofit cash holdings and spending: The missing role of government funding

Lee

Woronkowicz

2018

Nonprofit Mgmnt & Ldrshp

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“…This type of partnership is common in some Western welfare states. For example, some local governments and NGOs in the USA have set up reform task forces or cabinet-level non-profit liaison groups to improve the contracting systems and address relevant issues (Never and Leon, 2014).…”

Section: Discussionmentioning

confidence: 99%

Contracting social services in China: The case of the Integrated Family Services Centres in Guangzhou

Chan

Lei

2017

International Social Work

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“…Government grants and contracts have been the foundation of nonprofit financing in the United States (Guo, 2007; Salamon, 1987, 1995), and an indispensable resource for NHSOs in particular (Garrow, 2011; Grønbjerg, 2001). Government grants and contracts provide the highly needed financial safety net for NHSOs to conduct their mission‐oriented activities (Cho & Gillespie, 2006; Never & de Leon, 2014; Norris‐Tirrell, 2014). Research suggests that government provides funding in areas where critical human services are needed such as underdeveloped regions where the traditional market mechanisms fail to improve life conditions (Garrow, 2011; Joassart‐Marcelli & Wolch, 2003).…”

Section: Socioeconomic Factors and Nhso Densitymentioning

confidence: 99%

Need‐resource indicators and nonprofit human services organization density

Sevak

Baker

2021

Ann Public Coop Econ

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The challenges facing the US nonprofit human services organizations (NHSOs) in securing philanthropic resources and the resulting pressure for increased commercialization are well‐known in the nonprofit literature. However, there is still limited research on how such financial challenges are likely to affect their location choices, particularly in a post‐recession context. Using organizational ecology theory, we conducted a nationwide longitudinal study covering the period of the US 2008 recession to examine whether resource availability is more likely to predict the density of NHSOs than human needs. We used secondary data on a variety of socioeconomic variables from the National Center for Charitable Statistics and the US census survey in a linear multivariate regression analysis. The findings supported a majority of hypotheses, suggesting that NHSOs pursuing earned income are less (versus more) likely to be established in regions where the socioeconomic factors indicate a high (versus low) level of human needs. These findings suggest a counterintuitive trend in the establishment of NHSOs and present cautionary information on pursuing commercial activities in the human services sector.

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The Effect of Government Contracting on Nonprofit Human Service Organizations: Impacts of an Evolving Relationship

Cited by 15 publications

References 26 publications

Nonprofit cash holdings and spending: The missing role of government funding

Nonprofit cash holdings and spending: The missing role of government funding

Contracting social services in China: The case of the Integrated Family Services Centres in Guangzhou

Need‐resource indicators and nonprofit human services organization density

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