The Effectiveness of Nonprofit

NONPROFIT MANAGEMENT & LEADERSHIP, vol. 20, no. 4, Summer 2010 2010 Wiley Periodicals, Inc. 405Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/nml.20002

The Effectiveness of NonprotLead-Organization Networks

for Social Service DeliveryBin Chen, Elizabeth A. Graddy

Public agencies increasingly contract with nonprot organiza-tions to lead community-based networks for social service deliv-ery. We explore the role that partnership characteristics play inthe effectiveness of these networks. Using data on children andfamily services in Los Angeles County, we consider the impactof both the motivations for forming partnerships and the nature ofthe resulting partnerships on perceived outcomes for clients,interorganizational relationships, and organizational learning.We nd that client outcomes and interorganizational relation-ships are enhanced when partnerships are formed to meet cer-tain programmatic and organizational goals. Organizationallearning, however, is affected only when partnerships are formedto enhance organizational legitimacy. Partners selected becausethey share common vision increase effectiveness, while thoseselected because there are few alternative partners decrease effec-tiveness. Finally, when partnerships use an interorganizationalcoordination mechanism, client outcomes are improved. Themanagerial implications of these impacts for the nonprot sec-tor are developed. The results lend considerable support to therole of partnership motivation and partner selection in the effec-tiveness of nonprot lead-organization networks, and specicityabout the nature of that role.

BOTH THE PUBLIC AND NONPROFIT management literatures havefocused considerable attention on formation of interorganiza-tional partnerships for delivery of publicly funded social ser-vices (Kettl, 2006; Bingham and OLeary, 2008; OLeary and

Note: We appreciate the helpful comments of three anonymous reviewers. Weare grateful for the cooperation of the Los Angeles County Family PreservationProgram, and especially Rhelda Shabazz and Walter Yu-lung Kiang for theirconsiderable help and expertise. This paper was supported by a research grantfrom the Professional Staff Congress of the City University of New York.

Bingham, 2009). By any measure, there has been a large increase insuch alliances (OLeary, Gerard, and Bingham, 2006; Gazley andBrudney, 2007; Agranoff, 2007). Different types of collaborative ser-vice arrangements can be distinguished on a continuum of cooper-ation, coordination, collaboration, and service integration (Selden,Sowa, and Sandfort, 2006). One increasingly popular model ofinterorganizational partnership is the formation of lead-organizationnetworks, in which public funding agencies develop a single con-tracting relationship with a lead organization and then encourage ormandate creation of a community-based network of service providers(Graddy and Chen, 2006; Poole, 2008; Johnston and Romzek, 2008;Chen, 2008; Provan and Kenis, 2008). Just as it often makes moresense to hire a general contractor to build your home than to try tohire and manage a slew of contractors yourself, it is often in the bestinterests of a public agency to hire a lead organization to manage thenetwork (Goldsmith and Eggers, 2004). Many nonprofit social service providers are selected by public funding agencies to lead increating community-based service delivery networks. These net-works can facilitate information sharing, mobilize resources, andreduce gaps and overlaps in service delivery (Poole, 2008). Yet we are only beginning to explore the effectiveness of these lead-organization network arrangements.

In this article, we seek to understand the effectiveness of dyadicpartnerships created within the nonprot lead-organization networksto deliver publicly funded social services. In particular, we explorethe role played by the lead organizations motivation for forming apartnership and by the characteristics of the resulting partnershipon collaborative effectiveness. Understanding the associationbetween partnership characteristics and effectiveness should informa nonprofits decision to form dyadic partnerships within the net-work and enhance the likelihood of its survival.

The key question for network effectiveness is effectiveness forwhom? (Provan and Kenis, 2008). The effectiveness of service deliv-ery networks can be assessed from several perspectives: those of theclients, the organizational partners, the service industry, and the community. The specic network outcomes should be assessing thenetworks functioning (Provan and Milward, 2001). Agranoff (2007)suggests that ex post judgments of key players be used to evaluate col-laboration outcomes. In a hub-and-spoke arrangement that containsdyadic ties of a single organization, the lead agency is ultimately heldaccountable for overall network maintenance and functioning(Provan and Kenis, 2008). We focus here on how effective the dyadicpartnerships within the network are perceived by its lead organiza-tion in terms of achieving service goals, improving interorganizationalrelationships, and improving organizational learning.

In the next section, we develop the theoretical connectionbetween partnership characteristics and effectiveness. Then we exploreour model with data on the delivery of family preservation services

406 CH E N, GR A D D Y

Nonprot Management & Leadership DOI: 10.1002/nml

collected in Los Angeles County. We conclude with a discussion of theimplications of our ndings for nonprot lead agencies.

Partnership Characteristics and EffectivenessEfforts to understand the determinants of effectiveness in thebroader set of partnerships suggest that partner reputation, priorrelationships (an indicator of trust), shared decision making, andsimilarity between partners are positively associated with allianceoutcomes (Saxton, 1997). Arya and Lin (2007) found that organi-zational characteristics, partner attributes, and network structureare related to collaboration outcomes in nonprofit service net-works. Thomson, Perry, and Miller (2008) and Chen (2008)linked some collaborative processes with outcomes. A small num-ber of studies looked at the impact of interorganizational collabo-rations and networks on improved perceived and actual clientoutcomes of social service programs, such as mental health(Provan and Milward, 1995), early child care and education (Selden,Sowa, and Sandfort, 2006), and welfare-to-work programs (Ewalt,2004). This stream of research suggests that network integration,centralization, and stability and the intensity of the collaborativerelationship are related to positive client outcomes.

It is plausible that the outcomes of a partnership between twoorganizations will be inuenced by the reasons the partnership wasformed. The purpose of the relationship should suggest the areas inwhich it is likely to be effective. But partnerships formed for thesame general purposes may differ substantially in how well the part-ners can and do work together. This suggests that the nature of thepartnership is also likely to inuence its ultimate effectiveness.

In this section we develop the relationship between the leadagencys motivation for partnerships and their expected outcomes,and then we consider how the nature of those partnerships can mit-igate this relationship.

MotivationThe literature suggests two broad categories of benefits that leadorganizations seek from strategic partnerships (Guo and Acar,2005; Cho and Gillespie, 2006): resource exchange, where theyseek a resource needed for their activities that they do not possess(Gazley and Brudney, 2007; Arya and Lin, 2007); and organiza-tional legitimacy, where they seek associational advantages from awell-respected or well-connected partner (Provan, Kenis, andHuman, 2008). More specifically, in the public service deliverycontext, we develop two broad motivations that explain formationof strategic partnerships between lead agencies and their partner-ing organizations: to obtain resources to meet programmaticneeds, and to achieve organizational goals.

TH E EF F E C T I V E N E S S O F NO N P R O F I T LE A D-OR G A N I Z AT I O N NE T W O R K S 407


Partnershipsformed for thesame generalpurposes may

differsubstantially in

how well thepartners can anddo work together.

Programmatic Needs. Complex programmatic needs in social ser-vice delivery can drive formation of partnerships. Individual orga-nizations are constrained by technological, political, and cognitivelimits in the face of complex, many-sided problems. Establishingstrategic alliances may afford an organization access to tacit knowl-edge and complementary skills, new technologies or markets, andthe ability to provide a wider range of products and services beyondits organizational boundaries (Dyer and Singh, 1998).

Through qualitative interviews with lead-organization execu-tives, we identify ve types of resource acquisitions that are likely tobe important in helping lead providers of social services meet theirprogrammatic needs: extra provision capacity for case overload, spe-cific service expertise, geographic coverage, local knowledge andclient access, and cultural and linguistic competence. A single socialservice agency may not have the capacity to handle growing case-loads alone. An individual agency is constrained in the number andtypes of services it can provide to clients because of agency traditionand specialization. There may be spatial restrictions on a social ser-vice providers ability to serve clients scattered over a large geo-graphic area. An organization may lack local knowledge and accessto targeted clients. Therefore, some partnerships will be strategicallyformed for their ability to furnish such complementary resources.We can also explore what specic kinds of resources lead organiza-tions find most useful in managing collaborative partnerships (Gazley, 2008).

Organizational Goals. Lead organizations may seek partnershipsthat enhance their legitimacy. Legitimacy is dened as actions and be-haviors of a network or an organization that are perceived as desir-able and appropriate by key external and internal stakeholders(Provan, Kenis, and Human, 2008). We identify three such motiva-tions: to meet funding agency expectations or requirements, to en-hance organizational reputation, and to build future relationships.Local funding agencies are increasingly promoting a partnership planas a condition for receiving service delivery contracts. If public fund-ing is, or appears to be, contingent on a collaborative plan, then so-cial service agencies, which depend on public contracts, will comply.

Partnerships can convey legitimacy in other ways. Institutionaltheory suggests that strategic alliances can originate from an organi-zations motives to improve its reputation, image, prestige, or congru-ence with the prevailing norms in its institutional environment. A nonprot social service organization may thus choose to afliate witha reputable organization to enhance its own reputation (Galaskiewicz,Bielefeld, and Dowell, 2006). This in turn may make it more com-petitive for public funding. Organizations may also seek partnersbecause they want to build future relationships with them, either toenhance their ability to gain future contracts or to achieve otherorganizational goals.



OutcomesIt is reasonable to expect that the motivation for forming partner-ships will affect their effectiveness. We consider three dimensionsof effectiveness: client goal achievement, enhanced interorganiza-tional relationships, and improved organizational learning. Thesedimensions reect the types of goals sought by lead agencies fromservice delivery partnerships. The rstclient goal achievementrefers to the primary purpose of most public-sector efforts to en-courage interorganizational partnerships: to gain resources thatwill improve public service delivery. The secondenhancedinterorganizational relationshipscaptures both potential collec-tive and organizational benefits of partnerships. If partners workwell together, this may enhance the social capital in the commu-nity served. Better working relationships among organizations en-hance the opportunity for community problem solving and pavethe way for better future relationships (Gazley and Brudney, 2007).Organizations themselves may also benefit if these relationshipsenhance their legitimacy.

The third dimensionorganizational learningmost directlybenets the lead organization. If the partnership enhances the orga-nizations learning, this may increase its capacity to compete effec-tively for future contracts and improve its ability to achieve itsmission and goals. The mechanism for such learning often comesfrom working with another organization in developing a sharedunderstanding of the problem and reaching a consensus on how toaddress it (Gray, 2000; Agranoff, 2008).

When partnerships within the network are formed to meet pro-grammatic needs, we expect a strong positive association with clientgoal achievement. Because the partnership is viewed as supplyingprogrammatic components that are necessary for successful servicedelivery, the expectation is that the resulting service provision willbe enhanced. If lead organizations come to rely on the specic exper-tise and capacity of their partners, this can lead to better collabora-tive processes and thus better outcomes (Doz and Hamel, 1998).Strong collaborative processes should enhance interorganizationalrelationships; therefore, we also expect a positive association withthis indicator of effectiveness. However, organizational learning maynot be correlated with partnerships formed to meet programmaticneeds. Therefore, we do not expect partnerships motivated by pro-grammatic needs to necessarily promote organizational learning.

When partnerships are formed to enhance organizational legiti-macy, we expect a positive effect on organizational learning and onimproved interorganizational relationships. Lead organizations seekto build their collaborative relationships with a respected organiza-tion not only to enhance their own reputation and gain greater legit-imacy but also to develop a foundation for future collaboration. Giventhese expectations, this motivation should be positively associated



We do not expectpartnershipsmotivated byprogrammatic

needs tonecessarily

promoteorganizational

learning.

with these measures of effectiveness. However, when a lead organiza-tion seeks a partner to position itself to receive funding rather thanbecause it views the partner as necessary to meet client goals, the part-nership is presumably less likely to yield effective client outcomes.Therefore, we do not expect an impact on client goal achievement.

To summarize, partnerships formed to meet programmatic needsare expected to produce improved client outcomes and improvedinterorganizational relationships. Partnerships formed to achieveorganizational goals are expected to produce improved organiza-tional learning and improved interorganizational relationships.

Partnership CharacteristicsThis expected relationship between the goals of partnerships andtheir effectiveness is likely to be mitigated by the characteristics ofthe partnership. How well partners work together will have an im-pact on their effectiveness. Although the potential benefits forpartners are always elaborated, research on interorganizational col-laborations tends to overlook the cost side. Partners involved inany collaborative endeavor should also be assumed to assess thetrade-off of cost and benefits (Graddy and Ferris, 2006; Gazley,2008). Given the transaction and coordination costs of interorga-nizational collaborations, partnership characteristics that reducethese costs should enhance effectiveness. Key characteristics fallinto two categories: specific partner relationships and partnershipgovernance. Organizations that have prior knowledge of eachother, or that have similar missions, should be viewed as moretrustworthy, and trust lowers the transaction costs of partnerships.Coordination costs should be lower if there are formal agreementsthat define the nature of the partnerships and if there are interor-ganizational groups or mechanisms that facilitate joint decisionmaking.

Partners. A partnership is an inherently risky endeavor. The inte-gral characteristic is mutual interdependence, and this interdepen-dence implies vulnerability to the behavior of ones partner. Thisvulnerability can be mitigated by selecting partners the organiza-tion views as trustworthy (Snavely and Tracy, 2002). Such trustcan be viewed as incorporating both the intentions of a partnerand its competence (Das and Teng, 2001). Can and will the poten-tial partner behave as expected?

If lead organizations can identify such partners, they can reducethe informational and monitoring costs associated with collaborationand signicantly enhance the chance for effective partnerships. Weinclude four proxy indicators of the informational costs associatedwith identifying desirable partners and monitoring costs with man-aging successful partnerships. First, organizations should seek part-ners that share their organizational vision or mission. Shared vision



represents a cognitive dimension of social capital that was found tofacilitate knowledge transfer between partners (Li, 2005). Partner-ships between organizations with differing visions are difcult to ini-tiate and sustain because fundamentally different missions can createinterorganizational conicts. The expectation of shared mission maybe based on knowledge of a specic partners goals and values, or onmore general expectations of the sector within which the organiza-tion operates. For example, nonprot service delivery organizationsoften distrust the prot motives of business organizations.

Second, lead organizations have the best knowledge of partnerswith whom they have collaborated in the past. Thus lead organiza-tions should be more willing to form future partnerships with suchorganizations, especially if the past experiences were successful. Gazley and Brudney (2007) nd that a managers past collaborativeexperience increases partnership activities. In the contracting liter-ature, trust derived from previous working relationships is found toimprove outcomes (Brown, Potoski, and Van Slyke, 2006). In addi-tion, prior partnering experience allows an organization to buildexpertise in effective management. This expertise reduces transac-tions costs and thus increases the willingness of an organization toform more partnerships.

Finally, there are search costs associated with finding partners.Social network theory introduces an organizations relationships withother organizations as facilitating or constraining its internal and exter-nal capacity to join an alliance (Guo and Acar, 2005). Gulati (1995,1998) argued that an organizations external capacity to form an allianceis constrained by its social network, and Van Slyke (2007) called itsupply-side imperfection. In their study of network formation,Graddy and Chen (2006) found that even if lead organizations werewilling to comply with a funding requirement to form a provider net-work, they were constrained by the availability of potential partners.In some cases, a lead organization may select a particular partner sim-ply because they are not aware of alternative service providers.

When a lead organization seeks to reduce partnership costs byidentifying trustworthy partners, lower monitoring costs, easier com-munication, and more joint decision making should result. All ofthese should enhance partnership performance and thus improveclient goal achievement and interorganizational relationships. Suchwell-performing partnerships are also likely to provide spillover ben-ets to organizational learning. Thus all dimensions of effectivenessshould improve.

If, however, the lead organization has high search costs becauseof capacity limitations in the community, its own lack of a social net-work, or its high expectations and standards on partners, then all mea-sures of effectiveness should suffer. If lead organizations select partnerssolely on the basis of their availability, the resulting partnership isunlikely to be associated with improved client outcomes, strongerinterorganizational ties, or enhanced organizational learning.



If leadorganizationsselect partnerssolely on thebasis of their

availability, theresulting

partnership isunlikely to be

associated withimproved client

outcomes,stronger

interorganiza-tional ties, or

enhancedorganizational

learning.

Governance. Network governance in a lead-organization model isbuilt around a collection of dyadic ties between a lead organizationand its partners (Provan and Kenis, 2008). Even with the mostcompatible partners, there are coordination costs associated witheffective partnerships. Working together to meet programmaticneeds requires some investment in mechanisms for coordination,management of information, and accountability. We expect suchprocesses to be facilitated by a written agreement defining the nature of the partnership. A written contract or memorandum ofunderstanding (MOU) reduces ambiguity around roles and expec-tations. Moreover, the process of writing such an agreement canhelp develop an effective working relationship among the partners.Therefore we expect formal partnerships, evidenced by a writtencontract or MOU, to be more effective in meeting client goals andto have better interorganizational relationships and organizationallearning.

The effective ongoing management of partnerships requiressome relationship-specic governance structure. There is evidencethat partnerships with central mechanisms of control are more effec-tive in meeting service delivery goals (Provan and Milward, 1995).Therefore we expect partnerships that rely on interorganizationalcommittees to coordinate activities across the partners to be moreeffective in achieving client goals. Moreover, as these relation-specific assets develop, partners establish trust and thus improvetheir working relationship (Cohen and Levinthal, 1990). Thereforewe also expect a positive impact on improving interorganizationalrelationships. We do not expect an effect on organizational out-comes. Our model is summarized in Figure 1.



OUTCOMES

Client GoalAchievement

Enhanced Inter-organizationalRelationships

ImprovedOrganizationalLearning

MOTIVATIONS

Programmatic Needs (+)

Organizational Goals (+)

PARTNER CHARACTERISTICS

Shared Visions (+)

Same Sector (+)

Prior Experience (+)

Limited Choice ()

GOVERNANCE

Formal Governance (+)

Interorganizational Coordination (+)

Figure 1. Hypothesized Determinants of Nonprot Lead-Organization Network Effectiveness

Empirical SpecicationsThe population for this study is the social service agencies in theFamily Preservation (FP) program administered by the Los Ange-les County Department of Children and Family Services (DCFS).The aim of FP service interventions is to improve family function-ing when children are at imminent risk of placement in foster care,and to prevent this placement. The FP program in Los AngelesCounty is the largest of its kind in the United States in terms ofnumber of clients and funding.

Los Angeles County has a population of ten million living in aboutninety incorporated cities and numerous additional neighborhoods,many of which are multiethnic communities. Children and family-related social services are both substantial and diverse. DCFS createdthirty-eight Community Family Preservation Networks (CFPNs) indened geographic areas throughout the county. For each area, DCFScontracts family preservation services to a lead agency through arequest for proposal (RFP) process. The lead agency receiving the con-tract, which can be either a public or a nonprot organization, is askedto partner with one or more additional service providers to deliver arange of services to children and families. Such a lead-organizationmodel is typical of many social and human service collaborative networks sponsored by state and local governments (Poole, 2008;Johnston and Romzek, 2008). The model is designed to address theproblems of fragmented, disjointed programming and uncoordinatedservices offered by specialized providers while also ensuring account-ability for results (Page, 2004). We study here the dyadic relationshipformed when lead agencies form these partnerships.

Data CollectionWe collected the data for this study from late 2004 to early 2005.From our review of program documents and interviews, we devel-oped a survey instrument to collect data.

As many as thirty-four lead agencies were slated for study. Thesurvey was mailed to the executive director or the FP program man-ager in each of the lead agencies or networks. The response rate was76 percent, with twenty-six of the thirty-four lead agencies com-pleting the survey. One lead agency is not involved in any partner-ship and was dropped from the study. All the lead agencies arenonprot social service providers.

The unit of analysis for this study is the dyadic relationshipbetween a lead agency and each of its network partners. The twenty-five nonprofit lead agencies formed 132 partnerships to deliver upto eleven family preservation services.

Variable MeasurementThe variables are measured from lead agency responses to our sur-vey questions. Our dependent variablesthe three measures of



partnership effectivenesswere measured with the three questionsthat assess to what extent collaboration helped achieve client goal,enhance interorganizational relationships, and improve organiza-tional learning.

Respondents were asked to select the number from a seven-pointLikert scale (with 1 representing not at all and 7 representing veryeffective, very high quality, or to a great extent) that best indicatestheir assessment for each partner on each outcome. Table 1 presents thedescriptive statistics of their responses. On average, the partnerships wereviewed as effective in achieving these outcomes. Client goal achievementhas the highest overall mean (and the lowest variance in responses), indi-cating that on average this was the most successful outcome. Our measure of organizational developmentimproved organizational learningwas on average the least successful outcome (with the largestvariance), but even this outcome was rated highly.

All of this suggests that the distribution of the perceived out-come measures may be skewed to the higher end. However, thisskewed distribution should not affect the unbiasedness of the ordi-nary least squares (OLS) estimator since the property of unbiased-ness of OLS is not conditioned on any assumption about thedistribution of the dependent variable. Yet the distribution of the



Table 1. Descriptive Statistics (n 132)

Mean Std. Dev. Min Max

OUTCOMESClient goal achievement 6.45 0.75 4 7Enhanced interorganizational relationships 6.36 1.03 3 7Improved organizational learning 5.63 1.56 1 7

MOTIVATIONProgrammatic needs

Extra caseload capacity 2.27 2.07 1 7Specic service expertise 5.28 2.44 1 7Geographic coverage 4.08 2.65 1 7Local knowledge and client access 3.93 2.51 1 7Cultural and linguistic needs 3.83 2.75 1 7

Organizational goalsFunding agency preferences 3.30 2.47 1 7Reputation enhancement 5.02 2.13 1 7Building future relationships 4.87 2.34 1 7

CHARACTERISTICSPartners

Shared vision 4.98 2.37 1 7Same sector 0.80 0.40 0 1Successful past collaboration 3.92 2.61 1 7Few available partners 2.97 2.36 1 7

GovernanceFormal governance 0.77 0.43 0 1Interorganizational coordination 0.17 0.19 0 1



outcomes measures, and that of the error terms of our models, mayaffect the statistical inferences regarding our coefficient estimates,because P-values of the estimated coefcients are based on the nor-mal distribution of the errors. What researchers usually do is to runthe regression, save the residuals from the model, and look at theempirical distribution of the residuals (Bryk and Raudenbush, 1992).After we did that, we saw that the residuals were normally distributed.Therefore, we do not think the skewed distribution of the outcomevariables is a serious threat to the validity of the statistical inference.

Motivation and some partnership characteristic variables wereformed by lead-agency responses to questions about the importanceof programmatic needs, organizational goals, and partner charac-teristics in their decision to form specic dyadic partnerships on aseven-point Likert scale (with 1 representing not at all and 7 rep-resenting very important).

Among programmatic reasons to choose a particular partner,specic service expertise was the most important. For those seekingorganizational goals, reputation enhancement was the most impor-tant motivation. Gaining capacity to cope with case overload wasthe least compelling rationale for forming a partnership.

The governance and sector variables were formed on the basisof direct questions about the nature of the partnership. Formal gov-ernance is a dummy variable that assumes a value of 1 if there is awritten contract or MOU governing the relationship between thepartners. Same sector is a dummy variable that assumes a value of 1if the lead agency and the partner are in the same sector (public, sec-ular nonprofit, faith-based organization, business). Interorganiza-tional coordination is the percentage of how often interorganizationalcommittees are used to coordinate activities between the lead agencyand its partner. The summary statistics are presented in Table 1,which shows that the majority of dyadic partnerships govern by for-mal governance (77 percent), 80 percent of partners are in the samesector as the lead agency, and on average 17 percent of the time aninterorganizational committee is used as a coordinating mechanism.We performed a test of the variation ination factor (VIF) and didnot detect any multicollinearity problems.

Estimation and AnalysisRecall that the 132 dyadic relationships in our study are clusteredin twenty-five networks. Relationships in the same network arepresumably more similar than those in different networks. Thus itis not reasonable to assume independence across pairs within a net-work. Dyadic partnerships operating in the same network are likelyto share values on several variables. Some of these variables willnot be observed, and their presence in the error term would violateestimation assumptions in the classical multivariate regressionmodel (Bryk and Raudenbush, 1992).

Amongprogrammatic

reasons to choosea particular

partner, specicservice expertise

was the mostimportant.

Either fixed-effect or random-effect models can be used whenobservations are clustered into groups (Bryk and Raudenbush, 1992;Singer, 1998). We estimated both models in STATA. The results ofthe two models are almost identical in terms of the estimated direc-tion of the relationships and the statistical signicance of the coef-cients. This suggests that our estimates are good across specicationsand lends some condence in our ability to make inferences. We alsoran a Hausman test to compare xed with random effects in STATA.The results indicate that the xed effects are preferred over the ran-dom effects (signicant P-value, Prob Chi2 smaller than 0.05) fortwo dependent variables (client goal achievement and improvedorganizational learning), and random effects are preferred over thexed effects for the dependent variable of improved interorganiza-tional relationship (insignificant P-value, Prob Chi2 larger than0.05). Yet the random-effects models impose more restrictiveassumptions on the variance-covariance structure of the error terms,namely that the individual observations in the clusters are indepen-dent. In our study population, some organizations partner with multiple-network lead agencies, and thus the assumption of indepen-dence between the networks is violated. Therefore we present theresults from the xed-effects models in the next section.

ResultsThe results in Table 2 reveal that the model is a good fit for thedata for all three outcomes, thus supporting the importance ofpartnership characteristics in perceived effectiveness. The impactof the variables varies with the outcomes.

Programmatic Needs. As expected, partnerships formed to meetservice delivery needs are positively associated with improvedclient outcomes and better interorganizational relationships. Part-nerships formed to increase caseload capacity and obtain desiredgeographic coverage yield better client outcomes. Forming part-nerships to improve geographic coverage and obtain specific ser-vice expertise also improved interorganizational relations.Obtaining specific service expertise from a partner requires inter-action and learning, and this may promote communication and co-ordination across organizations. Communication and some jointdecision making is normally needed to coordinate geographic cov-erage, and this may explain the positive impact of these partner-ships on interorganizational relationships and organizationallearning.

Organizational Goals. As expected, forming partnerships to meetthe expectations of the funding agency was positively associatedwith improving interorganizational relationships and organizationallearning. The other two organizational motivations, however, did



not affect these two perceived outcomes. Therefore the impact of thismotivation was less than expected. We did not expect partnershipsformed to enhance organizational goals to improve client out-comes, but the results suggest they do. Partnerships formed to en-hance the reputation of the organization are positively associatedwith client outcomes. Perhaps lead agencies formed these partner-ships at least in part on the basis of the expertise of the partnersand there were associated spill-over benefits to service provision.Partnerships formed to lay the foundation for future relationshipsare negatively associated with achieving client goals. There is noreason to expect this motivation to have a positive effect, and thenegative impact may simply reflect the presence of multiple goalson the part of the organization that may undermine its focus onservice delivery.

Partner Characteristics. Partners selected because of a shared visionhave the expected positive impact on interorganizational relationships



Table 2. Fixed-Effects Regression of Partnership Motivation and Characteristics on Outcomes

Outcomes

Improved ImprovedClient Goal Interorganizational OrganizationalAchievement Relationships Learning

MOTIVATIONProgrammatic needs

Extra caseload capacity 0.103** 0.058 0.022Specic service expertise 0.040 0.073** 0.030Geographic coverage 0.127*** 0.10** 0.097Local knowledge and client access 0.020 0.060 0.025Cultural and linguistic needs 0.020 0.044 0.050

Organizational goalsFunding agency preferences 0.025 0.11** 0.196***Reputation enhancement 0.12** 0.067 0.029Building future relationships 0.074* 0.015 0.003

CHARACTERISTICSPartners

Shared vision 0.007 0.083* 0.22***Same sector 0.167 0.119 0.120Successful past collaboration 0.025 0.067** 0.019Few available partners 0.049 0.09* 0.213***

GovernanceFormal governance 0.033 0.309 0.55*Interorganizational coordination 0.60* 0.49 0.248

Number of observations 132 132 132Prob F (38, 93) 0.00 0.00 0.00R-squared 0.74 0.74 0.82

Note: *p 0.1; **p 0.05; ***p 0.01.

and organizational learning. Such partners appear to reduce transac-tion costs and thus improve the operation of the partnerships. Theimpact of successful past collaborations, however, was not as expected. These partners had a negative impact on interorganizationalrelationships. Perhaps multiple collaborations with the same partnerraise concerns about dependency. This relationship may be a nonlin-ear one, reducing transaction costs up to a point and then raisingother concerns that undermine the relationships effectiveness. Finally,partners selected because the lead agency believed there were fewavailable qualied partners had the expected negative impact on bothinterorganizational relationships and organizational learning. Not sur-prisingly, partners selected largely because they are the only alterna-tive do not produce effective relationships. None of these variableshad an impact on client outcomes.

Governance Characteristics. Finally, the formal partnership gover-nance affected improved organizational learning. Interorganiza-tional coordination affected only the outcome of goal achievementin our sample. Partnerships that rely more heavily on interorgani-zational committees to coordinate partnership activities are moreeffective in achieving client goals. The effect was as expected andpresumably reects the benets to clients of joint decision-makingmechanisms that can coordinate service delivery.

ConclusionIn an era that often necessitates working together, scholars havedevoted little attention to understanding the factors that promotewell-functioning lead-organization networks formed by nonprofitorganizations. Nonprofit organizations would benefit from moresystematic empirical investigation of the factors that influencepartnership performance of lead-organization networks.

Nonprofit lead organizations in the social service arena formpartnerships for a variety of reasons. In this study, we considered twobroad categories of motivation: programmatic needs and organiza-tional goals. Both motivations were found to affect outcomes, buttheir effects differed. The differences have policy implications forfunding agencies seeking to promote lead-organization networks,and for the nonprot lead organizations.

The public sector is usually interested in the ability of partner-ships to improve client outcomes or aid development of the socialnetwork of communities to enhance their problem-solving capacity.Our results suggest that both are inuenced by efforts to meet pro-grammatic needs and thus are likely to be affected by contractrequirements. The results suggest that RFPs covering larger contractsand broader geographic areas may encourage partnerships amongnonprots that ultimately benet clients, presumably through moreintegrated service delivery and richer service choices. Similarly, RFPs



that require multiple services and broader geographic coverageshould help communities, if the improved interorganizational rela-tionships produced by these partnerships create denser social net-works that can be tapped for community problem solving.

Partnerships formed largely to meet the requirements or prefer-ences of the funding agency enhance both interorganizational rela-tionships and the lead organizations own learning. Thus this policyinstrument seems to support the social network goals of servicedelivery partnerships. Unfortunately, it seems insufcient to improvedirect client outcomes.

The lead agency plays a critical role in effectively developing andsustaining community-based local networks. For public fundingagencies, a well-articulated process for qualification should be inplace when selecting lead agencies. It is important that the fundingagencies select nonprots with a proven track record of collaborat-ing with community stakeholders as the lead agencies (Poole, 2008).

For nonprot lead organizations seeking to enhance their ownlearning via such partnerships, our results suggest that seeking spe-cific partners with a shared vision is very important. For both thenonprofit lead organization and the funding agencies, efforts toincrease knowledge about available partners are likely to yieldimportant dividends, because partners of convenience do not pro-duce successful partnerships.

Finally, the results afford only limited support for the impact ofgovernance arrangements on effectiveness. Partnerships making moredecisions via integrated mechanisms were viewed as more effectivein client outcomes, but this was the only impact. More nuanced struc-ture variables may be needed to further explore this relationship.

Our results are interesting, but additional work is needed tounderstand the determinants of lead-organization network effec-tiveness. First, it is difcult to discern causality from cross-sectionaldata. Another concern is the self-reported nature of the data used toconstruct the dependent and independent variables. Nevertheless, itis important to understand the determinants of perceived effective-ness, because organizational perceptions will determine their will-ingness to enter and invest in such relationships. Organizations maytend to overvalue their collaborative outcomes, so there is also apotential social desirability bias in these self-reported data. Finally,our analysis is focused on a single type of service and a single loca-tion. The effectiveness of service delivery alliances may vary for ser-vices with substantially different characteristics. Los Angeles Countyencompasses a complex and diverse set of communities. This com-plexity may make partnerships more necessary and seen as morevaluable than in more homogeneous settings.

BIN CHEN is assistant professor in the School of Public Affairs at BaruchCollege of the City University of New York.



The lead agencyplays a critical

role in effectivelydeveloping and

sustainingcommunity-basedlocal networks.

ELIZABETH A. GRADDY is professor of public policy and holds the JeffreyJ. Miller Chair in Government, Business, and the Economy at the Schoolof Policy, Planning, and Development, University of Southern California,Los Angeles.

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