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1. Aminata Sillah, Ph.D.
Towson University
General Essay on Nonprofit Organizations
The nature, magnitude, and type of problems that nonprofit organizations deal with
sometimes transcend boundaries making it necessary for them to collaborate. These types of
problems often referred to as wicked problems (natural disasters, poverty) means that a single
organization will not put a dent in solving the problem. However, there are times, when the
problems are not wicked, but because nonprofits see a shift in the preferences of their
constituents, collaboration is needed to respond to the needs of the people they serve especially if
they lack the capacity and resources to do so alone.
With this in mind, several theories have been put forth on why nonprofit organizations
will choose to collaborate. One theory that has often been associated with collaboration is
resource dependency theory (RDT). This theory assumes that nonprofit organizations need
resources to maintain and sustain themselves, and will therefore look to their environment to
select partners to gain resources from. Their idea is that there is some of sharing going on.
Another theory; Institutional theory posits that certain rules and norms that affects the behavior
of an organization forces them to seek collaborations in order to overcome these institutional
constraints. Implicit in this theory is the idea of principals and agents, where the government is
the principal and the nonprofit the agent. The assumption is that both parties are self‐interested
and seek to maximize their utility. There is also the problem of information asymmetry, in which
one party has the upper hand, because they have more information on the actual cost of
producing and delivering a service. The issue with principal agent theory is that it focused on the
behaviors of the actors and not so much on the actual transaction. In order to fill this void,
transaction cost theory was put forth so that the focus is on the cost of transaction, in this case
collaboration. It assumes that when the cost of producing a service alone/in‐house is too high, an

2. organization will decide to either contract out or collaborate. On the other hand, when transaction
cost is low, they may decide not to collaborate.
Even though there are theories explaining collaboration, none has explicitly being defined
as the one best way to collaborate. The concept collaboration itself is froth with definitional
problems. However, Gazely (2008) using the definition provided by Sink notes that
“collaboration is a process in which organizations with a stake in a problem seek mutually
determined solutions by pursuing objectives that they may not otherwise do alone”. Inherent in
this definition is the idea that collaboration is an organic process, it takes time to formulate and
set up, and it goes beyond just coordinating efforts to solve a problem. Lending credence to
Sink’s definition, Foslar (2002) in Gazely (2008), indicates that collaboration is the mutual
coordination of resources and management by peers; it involves strategically aligning resources,
capacities, skills, knowledge, and activities, it also means assuming shared risks, and benefits.
Based on these definitions, collaboration can therefore take the form of a network where you
have organizations coming together to sharing ideas, and resources with the outcome being a
transformational one. The main idea is that the structure of the network should be based on the
type of issue being pursued or the problem that needs to be solved. In order for a network to be
successful, partners have to understand that there are certain elements that need to be met. The
organizations should have a common goal (they should be pursing the same ends/outcome), they
should have shared resources (each party has to bring something to the table), and they should
have a common purpose or at least share some similarities in their missions. The partners should
also have organizational cultures that complement each other, there should be strong leadership
support, trust, decisions should be shared (no party can arbitrarily make decisions), and
membership in the organization should be voluntary with each party maintain their autonomy,

3. and finally equity in how we treat members. An important ingredient is the commitment to
sustaining the network, because implicit in the definition of a collaboration is the notion that
collaborations are long term commitments. Networks have been presented by Agranoff (2003) as
group of organizations that are formally and informally organized made up of representatives
from public organizations and nonprofit organizations seeking to solutions to identified
problems. Thus, networks are an embodiment of more than one organization.
As with anything, there are perils and benefits to network and collaboration. Gazely and Brudney
as well as several of the authors from the readings listed a host of benefits as well as cautionary
words to nonprofit organization wanting to form collaboration.
Though the notion of network and collaboration sounds exciting, it comes with
significant perils such as the loss of autonomy (you lose your independence), organizations can
also lose the ability to effectively evaluate their programs because evaluation is done for the
group not necessarily for individual organizations, the organization’s mission may also become
shaky as a result of being part of the network, there is also the possibility of losing specialized
services as well as student body who may vote with their feet as a result of the collaboration.
These are just a few of some of the downfall to network and collaboration.
Based on the type of goals being pursue, there are several types of networks that organizations
can pursue as noted by Milward and Provan. Information diffusion networks are set up to share
information regarding problems. Though these types of networks are often set up in disasters to
facilitate information sharing, they can also be used by these organizations based on what the
goals they are pursuing are. Problem solving networks as the name denotes are set up to identify
and solve a public problem, while community capacity building takes the grass roots approach
by involving select organizations who are involved in building social capital. Service

4. implementation networks are often funded by the government though they are not involved in the
actual delivery of the service. Thus the government contracts these services out. From the
typology of networks listed, these institutions now have an idea of not only what theories guide
collaboration, what the concept of collaboration is, elements of a successful collaboration, cost
and benefits of collaboration; they also have to know that forming the network is just the
beginning, there is also the managing and sustaining of the network.
The network manager has no make sure that they are managing accountability; who is
responsible for what, when is the deadline, was contributions made, did everyone contribute ,
and is everyone doing what they are supposed to be doing? These are some of the issue that the
network manager has to deal with. The network manager is also responsible for ensuring that the
network is considered legitimate in the eyes of important stakeholder, as well as making sure that
members are committed to the success of the network. Managers also have the added
responsibility of managing any potential conflicts that may arise between and within members.
Even before the all the above mentioned managerial tasks, the network manager has to decide on
the design and governance structure of the network, and the choice of partners‐ who to bring
together to form the network.
It behooves nonprofit organizations to ensure that before committing to a network, they
understand the elements to a successful collaboration such as trust, shared resources, leadership,
commitment, shared goals, as well as equitable treatment of members.
Also the cost associated with networks such as lose of autonomy, specialized services, loss of
resources if there is any free‐rider problems and the inability to effectively evaluate programs.
These cost can be weighed against benefits outlined above such as gaining expertize, resources,
specialize services and so forth based on the transition cost theory.

5. What’s in a name anyway?
In order to answer this question, it is first necessary to define nonprofit organizations; which is
no easy feat. The existence of nonprofit organizations has been explained by various theories
such as government failure, market failure, and to some extent voluntary sector failure.
Government failure occurs when the goods are services that the government produces is
insufficient to meet the needs of every citizens. There are some who are left out, with unmet
need, and nonprofits come along to pick up the slack. Government failure occurs because of
several reasons; when government caters to the median voter some people are left out because
preferences are diverse. When a government acts categorically by producing uniform goods and
services, those with different preferences from the uniformity of the goods and services are also
left out. When representatives pursue short term goals because of their short tenure, citizens re
left out. When government is inhibited by its size and structure to know its people, and reach
them, citizens are left out. In all these instances of failure, nonprofit organizations are left
providing voice and services to those who have been left out, marginalized and live on the
fringes of society. Market failure occurs when the market fails to produce services because there
is no incentive for them to do so. This means nonprofit organizations are now involved in the
economic market. The voluntary sector failure assumes that because nonprofits are too
paternalistic, amateur, inefficient, and particularistic that they may fail. All these theories assume
that nonprofit are independent entities.
However, the boundaries are not so clear. Even though nonprofit organizations claim
independence, they are in most instances reliant on government funding for their survival. This
reliance can be in the form of funding like subsidy, grants, and contract. Nonprofits also claim

6. independence but they depend on government to define what they are and what they are not. For
example, the IRS gives the legal definition of a nonprofit organization, and set the limit and
polices on their political activities. The reliance on government is also seen in the political
influence of nonprofits when they rely on the political environment to determine how to make
policies. For instance, a change in political parties from democrats to republicans can affect
nonprofits.
The name of a nonprofit therefore is influenced by societal context. The capitalistic
nature of the United States gives us the name nonprofits. That is, they are not in the business of
profit sharing. Whatever monies made is put back into the mission of the organization. In
developing countries, the term NGO or non‐governmental organizations denotes a strong desire
to dis‐associate from government and from under the control of government. Salamon and
Anheire therefore note that these organizations are formal, voluntary, private, self‐ organizing,
and nonprofit distributing. Frumkin added that these organizations are non‐coercive, membership
is voluntary, nonprofit distributing and that there is no clear ownership and accountability. The
issue of accountability poses a problem for nonprofits because of the fact that they have multiple
stakeholders, and each come with a clear idea of accountability means to them. Nonprofits have
difficulties in meeting the diverse accountability need of their various stakeholders.
It is clear from the above that defining nonprofits can be problematic because no one definition
really captures the spirit of the sector. However, what is clear from the above is the function of
the nonprofits; as service provides, value guardian, promoting a pluralistic society and giving
voice to the voiceless. Based on this Frumkin provides the following: the demand and supply
role of nonprofits as well as the justification.

7. Demand Supply
Instrumental rationale The service provision
role of nonprofit
organizations
The promotion of
providers of resources
such as social
entrepreneurs and
encouraging social
enterprise
Expressive rationale The mobilizing of
individuals for collective
action, advocacy, and
promotion of social
capital
Providing a forum
where donors,
volunteers, and staff
can express their values and
faith.
In an ideal situation, when each of these overlaps, much is gain. However, that is hardly
ever the case. In a service provision role, nonprofits are engaged in a contract to provide
services, and making sure that they have enough resources to sustain and or maintain their level
of services. Their focus is on their mission, which may or may not be mobilizing individuals for
advocating. Thus, managers find that there is no middle ground with this matrix. You are either
on the demand side where you are providing some form of service either to government or
constituencies or you are on the supply side promoting those who bring your organization
resources. .A nonprofit that is resource strap may get involve in social entrepreneurial ship to
fund programs. For example a museum selling items related to their mission – making sure not to
violate the unrelated business tax law.
Interfaith Ministries provides a forum where volunteers, donors and other stakeholders can
express their faith and values. An example was when service recipient was so grateful and asked
to pray with staff. This sort of forum is only tolerated in the nonprofit sector.

8. References
Anheier, Helmut K., and Lester M. Salamon. “TheNonprofit Sector and the United Nations
System of Accounts: Country Applications of SNA Guidelines.” Voluntas 4 (4): 486-501
Ebrahim, A. and E. Weisband (eds) (2007) Global Accountabilities: Participation, Pluralism, and
Public Ethics, Cambridge: Cambridge University Press.
Frumkin, P. (2002). On being nonprofit: Conceptual and policy primer. Cambridge, MA:
Harvard University Press.
Gazley, B., and Brudney, J. L. “The Purpose (and Perils) of Government-Nonprofit Partnership.”
Nonprofit and Voluntary Sector Quarterly, 2007, 36(3), 389–415.
Hall, P. D. (1992). Inventing the Non-profit Sector and Essays on Philanthropy, Voluntarism,
and Non-profit Organizations, Johns Hopkins University Press, Baltimore.
Hansmann, Henry. (2002) "Economic theories of Nonprofit Organizations." In The Nonprofit
Sector: A Research Handbook, edited by Walter W. Powell. New Haven, Connecticut: Yale
University Press.
Putnam, R. D. (1995). Bowling alone: America’s declining social capital. Journal of Democracy,
6,65-78
Salamon, Lester M. and Helmut K. Anheier. (1997) The Emerging Nonprofit Sector: An
Overview. New York: Manchester University Press.