Partnerships Among Lebanese Nonprofit Organizations: Assessing the Impact on Human Resource Capacity

Abstract

This article investigates the impacts of partnerships on three aspects of nonprofits’ human resources capacity—paid staff, volunteers, and the professional development of staff of nonprofit organizations. Analysis of the seemingly unrelated regressions (SUR) suggests that partnerships may yield some human capacity improvements, that is, increasing the number of staff and opportunities for their professional development. The number of volunteers is not affected by partnerships but rather by other financial resources. The main implication of this research is that partnerships should be formed on the basis of their comparative advantages and focused on identifying suitable partners and cultivating these relations rather than collaborating with more organizations.

Keywords

partnerships collaboration nonprofits human resource capacity

Introduction

Inter-organizational collaboration is a common strategy used by organizations to address complex problems (Agranoff & McGuire, 2003; McGuire, 2006). Collaboration can have significant effects on participating organizations, bringing benefits in terms of sharing and creating knowledge within these organizations (Agranoff, 2006; Buuren, 2009; Hardy, Phillips, & Lawrence, 2003) and offering innovative solutions to problems an organization is currently addressing (Cuijpers, Guenter, & Hussinger, 2011; Sowa, 2009). However, collaboration can also constrain the organization’s autonomy and management (Provan, 1984; Thomson, Perry, & Miller, 2009). In this article, we contribute to the debate on the impact of partnerships—a form of collaborative relations—on nonprofits’ human resources capacity. We understand partnership as the formal arrangement between multiple organizations to implement a specific project with a defined scope, time frame, and budget. We recognize that we have chosen a narrow and somewhat limited operationalization of the concept of human capacity in organizations by focusing on the size and training of the human resources.

Many nonprofits collaborate for various reasons such as effectiveness in service delivery and program outcomes, revenue enhancement, support, and client satisfaction (Austin, 2000; Guo & Acar, 2005; Snavely & Tracy, 2000). Extant research has looked at the impact of collaboration on organizational practices (Babiak & Thibault, 2009; Hardy et al., 2003; Nylén, 2007; Phillips, Lawrence, & Hardy, 2000; Selden, Sowa, & Sandfort, 2006; Stone, 2000; Sveiby & Simons, 2002). However, research on the effect of collaboration on nonprofits’ human resources capacity is nascent.

Human resources management is critical in nonprofits. These organizations are labor-intensive; as such, capable human resources are crucial components of organizational effectiveness (Guo, Brown, Ashcraft, Yoshioka, & Dong, 2011; Handy & Brudney, 2007; Pynes, 2008). This human capital comes from both paid staff and volunteers (Handy, Mook, & Quarter, 2008). Considering that collaboration influences management capacity, these two different types of nonprofit workforces are significantly affected by or may affect the development of partnerships (O’Leary & Vij, 2012).

This article responds to O’Leary and Vij’s (2012) call for empirical testing of substantive research and practice questions; it is a novel empirical study of the impact of partnership on organizations’ human capacity. We define partnership as a temporal formal working arrangement among diverse actors; it is based on agreed-on objectives, specific projects, time frames, and resources based on formal agreements. Utilizing data from a subsector of nonprofits, this study uses seemingly unrelated regressions (SUR) to examine the impact of partnerships on the organizations’ paid staff, volunteers, and their development capacity.

The article is organized into four sections. The first section discusses the definition of collaboration and partnerships in the context of nonprofits’ human resource capacity and its impact on individual organizations. Research hypotheses are presented in this section. The second section explains the research methodology including the statistical models and sample characteristics, data, and variables. The results are presented in the third section and then interpreted and analyzed in the following section. We conclude with outlining a future research agenda.

One or More Definition: Partnerships and Collaborations!

Collaboration is an “iterative and cyclical” process in which organizations interact with one another over time both formally and informally, repeating patterns of negotiation, commitments, and the implementation of those commitments (Thomson & Perry, 2006). However, collaboration can take place in diverse manners, and there is a lack of scholarly consensus on its definition (Haque, 2004; O’Leary & Vij, 2012; Stone, 2000) as well as an ambiguity in its practical usage (Mattessich & Monsey, 1992).

To illustrate, Agranoff and McGuire (2003) present collaboration as “a process of facilitating and operating in multi-organizational arrangements to solve problems that cannot be solved, or solved easily, by single organizations” (p. 4). This definition sets collaboration as a broader umbrella that encompasses multiple forms and a good body of the literature focuses on collaboration as this broader concept. However, some scholars (Kagan, 1991; Mattessich & Monsey, 1992; Selden et al., 2006) classify collaboration as one specific form of inter-organizational relations, using a continuum based on formalization, hierarchy, or intensity. The first is “cooperation,” which is based on informal relationships with no clearly defined structure and separate resources. The second type is “coordination” in which organizations adjust their actions, toward some planning and division of roles while maintaining their independence. The third is labeled “collaboration,” which brings organizations into a new structure with a common goal, comprehensive planning, well-defined communication channels, and pooled or jointly secured resources. The last form of collaborative effort is “service integration.” In this relationship, organizations offer services to mutual clients (Selden et al., 2006).

In practice, “collaboration” is used interchangeably with “cooperation” and “coordination” (Mattessich & Monsey, 1992) adding further confusion to the discussion. Furthermore, our study is based in a developing country, where the existing literature introduces “partnership” as another form of inter-organizational relations. Here again, partnership means different things to different people. Partnerships are described as “working arrangements based on a mutual commitment” (Bovaird, 2004, p. 199). This relationship is explicitly outlined in an agreement or a contract; it is “based on mutually agreed-upon objectives, pursued through a shared understanding of the most rational division of labor based on the respective comparative advantages of each partner” (Brinkerhoff, 2002a, p. 216).

In the context we are studying, partnership is often used by practitioners. Our earlier framing of partnership aligns with what Mattessich and Monsey (1992) define as “collaboration.” The authors present collaboration based on a common new goal created and undertaken through a specific novel project, based on a certain structure or arrangement, ongoing communication, and pooled or jointly secured resources used for the specific project. As we proceed, we benefit from the literature on collaboration but label the inter-organizational relations we study as partnerships, as the term is commonly used in the context we are studying.

To be more specific, an organization can form one or more partnerships at a time with one or more entities based on formal arrangements to implement specific projects with a clear defined scope, time frame, and budget. Some illustrative examples from the organizations we study provide additional insights. In one case, two organizations decided to work together and launched a new joint project to address a problem they identified. The two organizations put together a joint proposal for funding, outlining activities to be undertaken and resources needed by each. An international organization accepted the proposal and disbursed the funding to the two organizations separately. In another case, a group of three organizations put together a proposal to implement a joint project, in response for a donor call for funding. When the proposal was approved, the three organizations signed memoranda of understanding (MOUs) that specify each organization’s roles, responsibilities, and resources. The funding was channeled from the donor to a lead organization and then distributed to the other organizations according to the MOUs. As such, partnerships are temporal endeavors. In principle, the power dynamic in these relationships is balanced, as responsibilities, credits, and benefits are mutually agreed-on and shared, and financial resources are pre-negotiated and determined according to the assigned responsibilities. This should differentiate partnership from a principal–agent, donor–grantee or contractual relationship; partnerships are the horizontal relationships among these organizations, while donor–grantee relationships remain vertical.

Impacts on Organizational Capacity

The broader literature on collaboration addresses a number of potential advantages of such arrangements (Graddy & Chen, 2009; McGuire & Silvia, 2010). While these benefits are not universal or conclusive, existing research focuses on effectiveness (Nylén, 2007; Sveiby & Simons, 2002), efficiency (Phillips et al., 2000), and responsiveness (Page, 2008; Selden et al., 2006). Collaboration allows organizations to respond to needs, to make service delivery more efficient, and to reduce organizational uncertainty, thereby contributing to organizational effectiveness (Bovaird, 2004; Brinkerhoff, 2002a; Selden et al., 2006), or succinctly stated, “to improve client outcomes or to aid the development of the social network of communities to enhance the problem-solving capacity of the organization” (Graddy & Chen, 2009, p. 66).

Second, collaboration can produce benefits in terms of increasing capacity at the individual organization level and enhancing innovations in performance (Hardy et al., 2003; McGuire & Silvia, 2010; Page, 2008; Weber & Khademian, 2008). With shared responsibilities, collaboration can “increase flexibility of the workforce” (Cuijpers et al., 2011, p. 565), increase knowledge-sharing and norms development (Agranoff, 2006; Agranoff & McGuire, 2003; Buuren, 2009; Leach, 2006; Thomson & Perry, 2006); and add to professional development of staff (Nowell & Foster-Fishman, 2011) .

Third, organizations can acquire critical resources from collaboration, which can facilitate the achievement of goals and enhance organizational capacity (Hardy et al., 2003; Phillips et al., 2000; Thomson & Perry, 2006). One of the key reasons for engaging in collaboration is to reduce uncertainty and secure resources needed for operation (Guo & Acar, 2005; Lee & Liu, 2012; Stone, 2000). Through collaboration, organizations should be able to gain access to a pool of distinctive resources that help improve capacities that enable each organization to conduct programs they could not do independently (Connelly, Zhang, & Faerman, 2008; Hardy et al., 2003). Related to this, partnerships are likely created to maximize complementarity of skills sets (and resources). This means that organizations can extend their breadth of capacity; synergies of assembling the diversity of capacity and resources may then emerge (Brinkerhoff, 2002b).

Needless to say, collaborations—and partnerships in particular—have shortcomings. “Partnerships are inherently risky endeavors. Their integral characteristic is mutual interdependence, and this interdependence implies vulnerability to the behavior of one’s partner” (Graddy & Ferris, 2006 in Graddy & Chen, 2009, p. 54). Risks of loss of autonomy and mission, exploitation, and asymmetrical power relations can exist in partnerships due to the requirements and pressures to be part of a whole (Babiak & Thibault, 2009; Bovaird, 2004; Connelly et al., 2008; Rodriguez, Langley, Béland, & Denis, 2007). In some cases, partnerships could yield redundant capacities as organizations try to work with similar organizations to avoid some of these challenges (Brinkerhoff, 2002b; Huxham, 2000).

There are also some procedural costs. Partnerships consume time and resources as organizations try to negotiate over goals, coordinate activities, manage joint operations, and monitor and report on progress (Ashman, 2001; Graddy & Chen, 2009; Haque, 2004). Many terms and requirements for establishing partnerships are ambiguous; organizations might not find consistency across partnerships they are involved in, and this could result in complications during implementation. Finally, there are always “free-riders” in partnership who participate with minimal efforts but enjoy the benefits while others do most of the work; performance evaluation and accountability measures thus can become complicated (Brinkerhoff, 2002a).

Nonprofits’ Human Resource Capacity

O’Leary and Vij (2012) refer to the ongoing debate on whether the human element allows an organization to form partnerships (Huxham, 2000, 2003) or that partnerships can help build the human capacity of nonprofits (Gazley, 2008). This article focuses on the latter: the impact of partnerships on organizations’ human capacity, including their staff, volunteers, and professional development. This focus is supported by existing research (AbouAssi, 2013; Helou, 2004) on NGOs in Lebanon, where partnerships are usually incentivized by financial benefits more than by the human capacities of these organizations, and, in recent years, motivated by external factors—namely to satisfy a donor requirement.

Nonprofit organizations heavily depend on the committed work of staff and volunteers to accomplish their missions (Brudney, 2010; Brudney & Meijs, 2009; Guo et al., 2011). The work of nonprofits is labor-intensive with human resource costs usually accounting for more than half of organizations’ entire budgets (Pynes, 2008); therefore, the human element is crucial.

The literature on collaboration talks about the potential for expanded organizational capacity (Babiak & Thibault, 2009; Hardy et al., 2003). When engaging in collaboration, organizations benefit from these “exchange relationships” to acquire a set of critical resources and skills they might not otherwise have access to (Thomson & Perry, 2006). Although existing research does not necessarily dissect the specific aspects of human resources, we try to present our argument from three angles, focusing on the staff size and training.

First, certain modes of relationship require different types of human capital; managers likely hire staff to perform a specific set of tasks (Lepak & Snell, 2002). When forming a partnership, organizations need additional staff to implement the new projects and activities and manage the relationships (Ashman, 2001; Babiak & Thibault, 2009; Graddy & Chen, 2009; Haque, 2004). The underlying assumption here is that organizations pursue partnerships based on division of labor that accounts for the competencies of each partner (Brinkerhoff, 2002a). In other words, the partnering organizations differ in the nature of their work and contribution to the partnership; staff of each organization might have distinct responsibilities that cannot be shared or found in other organizations. As such, nonprofits will attempt to recruit staff with particular skills to compensate for the low availability of these skills among partnering organizations (Arya & Lin, 2007).

Second, organizations need to invest in human capital; their advantage in partnerships and the sustainability of these relations heavily depend on their human resources, specifically the value and uniqueness of their employees’ skills (Lepak & Snell, 2002; Wilkinson, Eberhardt, McLaren, & Millington, 2007). Externalizing employment may affect the number and types of workers a firm uses (Lepak & Snell, 1999). These relationships allow the identification and attraction of skilled human resources, especially in new domains in which organizations need to fill a gap or strengthen their capacity (Arya & Lin, 2007).

Third, Selden et al. (2006) specifically posit that collaborative efforts have positive impact on employees’ retention and recruitment. These efforts contributed to the improvement in the working environments, satisfaction with pay and benefits, and increased career opportunities for employees. Salaries and benefits are important predictors of staff turnover, even in nonprofit organizations, where other factors such as public service and commitment to a mission are also prominent (Selden et al., 2006; Whitebrook, Howes, & Phillips, 1989). This is particularly true in organizations with increased visibility and resources that are able to attract and retain qualified staff (Arya & Lin, 2007). Partnerships allows pooling of additional financial resources that an organization can use to attract and hire new paid staff (Connelly et al., 2008; Cuijpers et al., 2011; Hardy et al., 2003); there is a need for more manpower, and the resources are available to satisfy that need.

Organizations we are studying rely on funding not only to implement projects but also to offer employment opportunities in the country (AbouAssi, 2015). These organizations are less likely to rely on each other in their operations and, thus, to reduce their staff, especially when financial resources are available and not restricted. As such, the financial capacity of the organization improves (Snavely & Tracy, 2000), and the ability of the organization to attract and develop its human resources increases. As such, organizations that have increased their reliance on external partners have necessary financial slack to justify employment (Lepak & Snell, 1999).

Accordingly, we expect partnerships to increase the number of paid staff due to the need to fill a gap in skills and increase competitiveness of the organization, and to the financial ability of the organization to attract new human capital. We draw the following three sets of hypotheses:

Hypothesis 1 (H1): The more partnerships an organization forms, the higher the number of paid staff.

Hypothesis 2 (H2): The more partners with which an organization is engaged, the higher the number of paid staff.

Hypothesis 3 (H3): The more resources an organization receives through partnerships, the higher the number of paid staff.

In addition to paid staff, nonprofits rely on volunteers, a distinctive feature of nonprofit workforce (Bowman, 2009; Bussell & Forbes, 2002; Handy & Brudney, 2007; Tschirhart, Mesch, Perry, Miller, & Lee, 2001; Wilson, 2000). Volunteers represent the beneficiary community being served and give organizations legitimacy; they care about and bring a unique sense of compassion and commitment to these organizations, affecting organizational stability and change (McDonald & Warburton, 2003; Wilson, 2000). Volunteers are also not paid for the work they perform; this may result in cost reductions and generate an economic value to the organization (Handy & Brudney, 2007; Tschirhart et al., 2001). Finally, volunteers help an organization expand its “outreach” and network; volunteers offer additional capabilities and special skills, especially when there is a need to respond to emergencies or mounting needs that paid staff cannot meet (Brudney & Meijs, 2009).

Some scholars argue that nonprofits tend to become less dependent on volunteers as they grow and hire more paid staff (Handy et al., 2008; Hartenian, 2007). Handy et al. (2008) introduce the concept of interchangeability of paid staff and volunteers. Surveying Canadian nonprofits, the authors note, “in some organizations, volunteers are replacing paid staff; in others, paid staff are replacing volunteers; and in some, both patterns are occurring” (p. 79). Among the factors that affect “interchangeability” of paid staff and volunteers are organizational demand, organizational culture and the budget health or growth in revenues. With a growth in revenues and expansion of activities, the authors explain that staff are expected to meet timelines of some projects while volunteers may not. Therefore, we can assume that with an increase in the number of paid staff due to forming partnerships, staff can replace volunteers through a process labeled “professionalism” (Handy et al., 2008); consequently, the number of volunteers will decrease. Focusing on partnerships, and using the concept of interchangeability of paid staff and volunteers, we draw the following hypotheses:

Hypothesis 4 (H4): The more partnerships an organization forms, the lower the number of volunteers.

Hypothesis 5 (H5): The more partners with which an organization is engaged, the lower the number of volunteers.

Hypothesis 6 (H6): The more resources an organization receives through partnerships, the lower the number of volunteers.

Nonprofits’ human resource capacity is also reflected in the professional development of their workforce. We use the training the staff receives as an illustration of their professional development. Scholars (Agranoff, 2006; Buuren, 2009; Guo et al., 2011; Leach, 2006; Lee & Liu, 2012; Thomson & Perry, 2006) note that organizations share their knowledge as they work together, facilitating the professional development of their employees. Lepak and Snell (2002) and Wilkinson et al. (2007) consider the importance of heavily investing in staff development through learning and training because the outcomes of the collaboration are important. Firms then need to develop the competencies of the employees to be able to meet the demands in the new situation; “if training is done at all, it likely will focus on process facilitation and team building,” (Lepak & Snell, 1999, p. 41).

In addition, staff members face challenges within partnerships that are different from traditional management or operations problems, and hence require different skill sets (Connelly et al., 2008). Managing partnerships requires increased coordination, dispute management, and reporting and monitoring (Babiak & Thibault, 2009; Bingham, O’Leary, & Carlson, 2008; Graddy & Chen, 2009). These factors should create incentives for nonprofits to enhance the capacity of their staff, providing them with necessary skills and techniques through training and professional development (Gazley, 2008; Leach, 2006). Therefore, we expect partnership to facilitate the professional development of a nonprofit’s workforce, which can result in improvement of an organization’s human resource capacity. Focusing on partnerships, we draw the following hypotheses:

Hypothesis 7 (H7): The more partnerships an organization forms, the greater the level of its staff’s professional development.

Hypothesis 8 (H8): The more partners with which an organization is engaged, the greater the level of its staff’s professional development.

Hypothesis 9 (H9): The more resources an organization receives through partnerships, the greater the level of its staff’s professional development.

Before we proceed, we want to reiterate that organizational capacity can affect, but also be affected by, collaborative efforts including partnerships (O’Leary & Vij, 2012); scholars have yet to settle this debate and empirically verify a one-way causality. That is why we accept the counter argument that organizational capacity affects partnership—and other forms of collaboration—creating a problem of reverse causality. We hope lagging the independent variables in the statistical model addresses this problem of endogeneity.

Method

Sample Background

This article focuses on a subset of NGOs in Lebanon: those working in the environmental sector. Lebanon is a developing country with a weak economy that heavily relies on external sources of revenues (treasury bonds, remittances, and grants). A considerable percentage of the grants are channeled through local NGOs (AbouAssi, 2013, 2015). Lebanon is also a young democracy with a high degree of individual freedom and civil liberties relative to the region; its NGO sector is dynamic and covers a wide array of issues and services.

Lebanese NGOs are membership associations that have members but work to serve the general public. Around 35% of environmental organizations are relatively new, founded after 2000; one reason is the increase of international funding to the environmental sector. Many of the NGOs are small in terms of staff and revenue. Only 56.5% of the NGOs recruit paid staff, with average number of staff of eight; the majority of environmental NGOs rely on volunteers (AbouAssi, 2013, 2015).

NGOs function without any constraints on their sources of funding and with weak government control (AbouAssi, 2013). Lebanese NGOs can secure funding from various sources, including international donors, without any interference or control from the central government (Helou, 2004). The main source of funding for these organizations—besides internal revenues such as membership fees that vary widely across organizations—is grants they receive from international donors. It is important to note that partnerships are a challenge for many organizations that prefer to work solo but find it necessary—either due to funding requirements or the nature of a project—to collaborate with other organizations (AbouAssi, 2015).

Two factors make this set of NGOs an interesting case to study. First, there are mainly two forms of collaboration that exist among these organizations: formal partnerships and membership in umbrella or networking bodies; many organizations do not pursue or have an interest in joining networking bodies and, when they do, these are international bodies (AbouAssi, 2015). We developed the survey questions according to the identification of these two forms of collaboration. Second, partnerships are seldom driven by organizational or project needs or interests due to a widespread culture of competition among these organizations. Organizations usually form these relationships to benefit from funding incentives; in recent years, donors have been encouraging partnerships so extensively that, in some cases, they have become a funding criterion (AbouAssi, 2015; Helou, 2004).

Data Collection and Analysis

There are 153 registered environmental NGOs in Lebanon; all were sent either an online or mail survey over an extended period (2010-2011). In total, 98 organizations responded to the survey, but there were nine missing observations, setting the number in the data set at 89 organizations. Secondary data of these organizations were collected through reviewing public documents (reports, media, and websites). We checked against possible response bias by comparing respondents with non-respondents. Around 16% of non-respondents are organizations that do not operate or only exist on paper; the respondents represent the whole population across size, resources, and location. As Table 1 shows, the survey included questions related to annual budget, internal sources of revenue (membership fees and income-generating projects), external sources of revenue, funded projects, partnerships, partners, and staffing for the years 2005 through 2009, generating 5-year panel data.

Table 1.

Summary of Survey Questions.

Subject	Number of questions
Governance (board, self-regulation, representation, legitimacy, meetings)	11
Human resources (Staff, volunteers, leadership, gender, training)	7
Programs (plans, projects, partners, project budgets and durations, beneficiaries, monitoring and reporting)	8
Financial resources (budgets, revenues, percentile distribution of sources, budget preparation, accounting)	11
Inter-organizational relations (classifications, nature, actors, assessment)	8
Open-ended questions (needs, prospects)	4

The variables

In examining the impact of partnerships on human capacity, we focused on changes that occurred from one year to another. We specifically examined whether NGOs formed new partnerships, engaged with new partners, implemented new projects, recruited new staff, attracted new volunteers, and offered new training. To test the hypotheses, three dependent variables measuring change in the human resource capacity of an organization are included in the statistical model.

The number of staff, a continuous variable measured as the difference between number of staff in Year t + 1 and Year t (the number includes both full- and part-time staff);

The number of volunteers, a continuous variable measured as the difference between number of volunteers in Year t + 1 and Year t; and

Professional development of staff, a continuous variable measured as the difference between number of staff participating in training activities in Year t + 1 and Year t.

Because a partnership is a working arrangement among diverse actors based on agreed-on objectives, specific projects, time frames, and resources (Bovaird, 2004; Brinkerhoff, 2002a), we are interested in the number of arrangements, number of actors, and the resources exchanged. We include the following independent variables:

Number of partnerships, a continuous variable measured as the difference between number of partnership an NGO forms in Year t + 1 and Year t; we only account for new partnerships an organization forms in a specific year;

Number of partners, a continuous variable measured as the difference between the total number of partners an NGO is involved with in Year t + 1 and Year t;

Project budgets, a continuous variable measured as the difference between the total amount of financial resources the organization acquires through partnerships in Year t + 1 and Year t; these resources are usually reported separately as project budgets and included in the annual revenues of the organization. If the partnership extends over more than a year, the project budget was calculated for each year. For the purpose of this study, the total was aggregated.

We also acknowledge that NGOs secure other sources of funding, besides partnerships; these sources can also affect the human capacity of the organizations. The other two main sources are internal revenues of the organization and other external funding an organization receives independently and not necessarily through forming partnerships (Bowman, 2009). Based on this, two additional independent variables are included in the model:

Financial capacity, a continuous variable measured as the difference between the internal revenues of the organization in Year t + 1 and Year t; and

Other resources, a continuous variable measured as the difference between external funding an NGO gets either through grants to implement projects individually or some form of government support in Year t + 1 and Year t. These resources do not include the funding acquired through partnerships.

The model also includes two control variables: (a) organizational age measured by the difference between year of observation and year of establishment and (b) size of an organization measured by the natural log of the annual budget in a specific year (Guo & Acar, 2005; Handy et al., 2008; Hartenian, 2007).

The descriptive statistics of these variables are reported in Table 2. With panel data from 89 organizations over 5 years, the total number of observation is 356. Some of the variables were skewed, and hence, we used the log transformation in the models.

Table 2.

Descriptive Statistics.

	N	M	SD
Change in
Number of staff	342	6.3	5.965
Number of volunteers	342	56	39
Professional development (training)	342	0.122	1.798
Number of partnerships	342	0.347	1.203
Number of partners	342	0.467	2.317
Partnership resources^a	342	0.650	2.584
Financial capacity (internal revenues)^a	342	0.0094	0.073
Other external resources^a	342	0.014	0.130
Organizational age	342	16.104	10.600
Organizational size	342	1.555	3.991

In hundred thousand.

The statistical model

We use Zellner’s SUR technique to test our hypotheses¹ (Pindyck & Rubinfeld, 2008). We have three different, but related, dependent variables to show the impact of partnerships on various aspects of nonprofits’ human resource capacity. We use the same data and independent variables in the equations indicating the possibility of correlation in the error terms due to the fact that these are organizations that operate in the same subsector (i.e., environment), attract staff and volunteers from the same pool, and draw on funding from common sources. The Breusch–Pagan chi-squared statistic test for error independence reveals p values of .000, which indicate that there is statistically significant correlation between the errors in the equations. To correct this problem, we used SUR to jointly estimate the equations (Avery, 1977; Griffiths, Hill, & Judge, 1993).

In addition, we lagged the independent variables to mitigate the endogeneity problem we referred to before and to account for the possible time lapse between the changes in the independent variable and the resulting change in the dependent variables. Finally, the analysis uses a panel data set of 89 NGOs between 2005 and 2009 with changes in the independent variables over time; therefore, we included the year fixed effects in the model. We then performed Hausman test, which turned out to be significant, indicating that the effects of the independent variables are significantly different in the year-fixed-effects model compared with the model with no-year fixed effects.

Correlation

We conducted a correlation analysis to examine the possible correlations between predictor variables. As depicted in Table 3, the correlation between most independent variables is not significant, except that between changes in the number of partners and number of partnerships (0.607) and between changes in the number of partners and partnerships resources (0.581). This is expected because entering into a partnership means an organization is more likely to have new partners with which to work and to secure additional resources to implement projects (Connelly et al., 2008). However, in the two cases, the correlation is not high enough to separate the effects of the variables.

Table 3.

Correlation Matrix.

	Partnership	Partners	Partnership resources (log)	Financial capacity (log)	Other ext. resources	Age	Size (log)
Partnerships	1.000
Partners	.607	1.000
Partnership resources (log)	.581	.131	1.000
Financial capacity (log)	.199	.0322	.336	1.000
Other ext. resources	−.0485	−.091	.449	.510	1.000
Age	−.0521	−.0751	−.067	−.037	−.043	1.000
Size (log)	.095	.0644	.457	.472	.437	−.102	1.000

Results of the Seemingly Unrelated Regressions

Table 4 shows the results using the SUR technique. The number of partnerships tends to have significant effects on the number and professional development of the staff—albeit marginally. It does not affect the number of volunteers. Each additional partnership an organization forms increases the number of staff by 0.49 and enables an organization to train 0.3 more employees in the next period. Therefore, H1 (more partnership, more staff) and Hypothesis 7 (more partnership, more training) are confirmed, while Hypothesis 4 (more partnership, fewer volunteers) is not supported.

Table 4.

Results of Seemingly Unrelated Regression (With Year Fixed Effects).

Independent variables^a	Dependent variables
Independent variables^a	Staff	Volunteers	Development of workforce
Change in partnerships	0.490*** (0.000)	−0.150 (0.150)	0.308* (0.160)
Change in partners	−1.10** (0.000)	0.000 (0.000)	−0.102 (0.070)
Partnership resources (log)^b	0.220*** (0.000)	1.00 (1.00)	0.190*** (0.040)
Financial capacity (log)^b	0.097** (0.070)	−0.081*** (0.000)	2.620 (9.410)
Other external resources^b	0.038*** (0.000)	0.687*** (0.420)	0.154 (0.880)
Controls
Organizational age	0.000 (0.000)	−0.000 (0.000)	0.000 (0.010)
Organizational size (log)^b	0.006* (0.000)	0.019* (0.010)	−0.412* (0.080)
Constant	0.968*** (0.02)	1.799*** (0.21)	−3.505 (4.58)
R ²	.611	.111	.148
p	.000	.000	.000
Hausman test for random effects	.277***	.102***	.111**
N	277	277	277

Independent variables are lagged.

In hundred thousand.

p < .10. **p < .05. ***p < .01.

Engaging with more partners significantly affects the number of staff only, but not the number of volunteers or the professional development of the workforce. For every additional partnering organization, a nonprofit decreases its staff by one. Therefore, there is no support for Hypotheses 2 (more partners, more staff), 5 (more partners, fewer volunteers), and 8 (more partners, more professional development).

Acquisition of resources through partnerships significantly contributes to two aspects of nonprofits’ human resource capacity. The results indicate that a 10% change in project budget increases number of staff by 0.022 and the number of employees who receive training by 0.019, respectively. Hypotheses 3 (more resources, more staff) and 9 (more resources, more training) are supported by the results, while Hypothesis 6 (more resources, less volunteers) is not supported.

In addition, we notice that a nonprofit’s financial capacity and its ability to attract funding independent of a partnership have a positive effect on the number of staff and a negative impact on the number of volunteers. A 10% change in internal revenues increases the number of staff by 0.0097 and decreases the number of volunteers by 0.0081. Organizations with more internal revenues employ more paid staff and attract fewer volunteers than other organizations. This shows these streams of more sustainable revenues to affect nonprofits’ human resources. When it comes to securing external resources other than those obtained through partnerships, the effects on the number of staff is similar in terms of the direction of the coefficients, while the effects on the number of volunteers have the opposite directions. With a 10% increase in external revenues, a nonprofit will increase both the number of staff and volunteers by around 0.004 and 0.069, respectively. In both cases, the professional development of the organization’s workforce is not affected.

Partnerships and Human Capacity: Assessing the Impact

Overall, some aspects of nonprofits’ human resource capacity are shown to benefit from partnerships. Forming such relations can potentially help nonprofits increase the number of paid staff and facilitate the professional development of their staff, although marginally. When joining a partnership, nonprofits need more staff dedicated to the partnership project, which might differ from other activities the organization is involved in (Arya & Lin, 2007; Lepak & Snell, 1999, 2002; Wilkinson et al., 2007). More training may also be needed in the new skill sets related to a new joint project (Babiak & Thibault, 2009; Buuren, 2009; Connelly et al., 2008; Graddy & Chen, 2009), or as a result of an increase in knowledge sharing (Agranoff, 2006; Nowell & Foster-Fishman, 2011; Thomson & Perry, 2006) and exposure to new norms and practices (Agranoff & McGuire, 2003; Leach, 2006).

However, we also find that adding an additional partner decreases the number of staff. We need to cautiously interpret this result. On one hand, an increase in the number of partners (and not just partnership) raises the possibility of engaging with similar organizations in terms of nature of work and operations. Here, complementary skills and resources become important issues. Scholars (Ashman, 2001; Brinkerhoff, 2002a, 2002b; Haque, 2004) raised the possibility that partnerships could yield redundant capacities or risk the emergence of “free-riders” who do not necessarily invest in the relationships but still benefit from them. If this is the case, then an organization might need to identify suitable partners and weigh its options between cultivating relationships with a limited number of actors and collaborating with more organizations.

On the other hand, Lepak and Snell (1999) argue for the strategic allocation of internal and external human resources to reduce overhead costs and retain flexibility and productivity. Carrying the argument further, in a partnership, NGOs could obtain synergistic benefits such as expanding mission-related activities without significantly increasing overhead costs. If this is the case, a nonprofit might consider a suitable role that yields a larger share of partnership resources (Brinkerhoff, 2002a; Huxham, 2000). We also need to recognize that other factors that we did not include in our model, such as employee productivity, dissatisfaction, and retirement, could provide further justification or alternative explanations of the results herein.

By forming partnerships with other organizations, nonprofits can access more financial resources (Connelly et al., 2008; Hardy et al., 2003). Resources obtained from partnerships are dedicated or obligated to specific projects and usually cover personnel expenses that enable the organization to attract and hire paid staff, enhancing its human capacity (Cuijpers et al., 2011). Through partnerships, nonprofits can expand both their program and financial portfolio (Thomson & Perry, 2006), and they may consequently need additional human resources to work on new activities they are undertaking as part of the partnership; therefore, they tend to hire more staff to work on these projects (McGuire & Silvia, 2010; Weber & Khademian, 2008). These additional financial resources also allow the organization to invest more in the professional development of its employees (Hardy et al., 2003).

We also notice some unexpected results. Other external resources (such as government support) are positively correlated with the number of staff; we did not anticipate a positive effect on the number of volunteers as well. The “interchangeability” formula of paid staff and volunteers—where an increase in paid staff compensates for a decrease in the number of volunteers—due to organizational demand and budget health (Handy et al., 2008) does not apply here. There are three plausible explanations here. First, volunteers are attracted to nonprofits for a variety of reasons not just because they are needed (Bussell & Forbes, 2002; Tschirhart et al., 2001); activities an organization is involved in and the multiple funding it receives might enhance its public image, which in turn attracts more volunteers to support the work and the mission of the nonprofit (Tschirhart et al., 2001; Wilson, 2000). Second, these financial resources (e.g., government funding) fluctuate; for strategic planning purposes, a nonprofit should be interested in attracting volunteers despite an increase in its paid staff to prepare for the next phase after the funding runs out (Bowman, 2009; Brudney, 2010). Third, with an increase in the number of paid staff, a nonprofit will be able to more effectively manage its volunteers and consequently may be ready to attract more volunteers (Brudney, 2010). In general, this seems reasonable according to the arguments that both of these workforces are integral to nonprofits’ human resource capacity, ultimately influencing overall capacity (Brudney & Meijs, 2009; Guo et al., 2011; Pynes, 2008).

These observations are further confirmed when we notice that, among the independent variables, only increased financial capacity decreases the number of volunteers. Although nonprofits acquire needed resources from partnerships (and some from other sources), it is only when the organization strengthens its own financial capacity (Bowman, 2009) that the organization can then decrease the number of volunteers and increase the number of full-time staff. This is the only instance when interchangeability takes place (Handy et al., 2008). An organization can become less dependent on its volunteers only when it achieves internal financial stability through maintaining internal revenues (Wicker, Longley, & Breuer, 2015), which partnerships do not necessary allow due to fluctuation of temporary funding. Therefore, nonprofits might decrease the number of volunteers when they have stronger capacity to generate their own revenues and not when the budget—in general—is healthy as Handy et al. (2008) argue. This suggests that staff is preferable to volunteers when organizations can afford them—and despite the broader above-mentioned potential benefits of volunteers.

To recapitulate, this research suggests partnerships—in general—may yield human capacity improvements more often than they drain organization capacity, consistent with arguments made by other scholars (Guo & Acar, 2005; Hardy et al., 2003; Stone, 2000). Although the effects are generally positive on the human resources capacity, we emphasize that nonprofits should recognize other factors that might disproportionately raise human resources requirements. As an organization engages in more partnerships, it needs to develop procedures for negotiation and coordination in each partnership (Ashman, 2001; Babiak & Thibault, 2009; Graddy & Chen, 2009). If the costs related to these processes outweigh the benefits, partnerships cannot lead to the improvement of nonprofits’ human resource capacity.

Finally, there is a general tendency (and trend) among donors—public agencies or private foundations—to favor collaboration and push for and provide incentives for organizations to collaborate (AbouAssi, 2015). The discussion should lead donors to recognize the impact of collaboration—the intended or unintended benefits and costs—on organizational management and capacities, as much as on the interest in the effectiveness and efficiency of outcomes.

Needless to say, we recognize the limitations of the sample size, the small size effect of the financial variables—despite their significance, the possible confounding effect of the increased financial resources, and the generalizability of the results in other sectors and in different national contexts. Nevertheless, we believe that the results provide a meaningful contribution, considering that the impact of nonprofit collaboration on human resources capacity has been seldom explored. We also could not include the differentiating characteristics of the partners or the possible drawbacks of partnerships, such as loss of autonomy, inequality of power, and additional costs for goal negotiation, coordination, and dispute resolution, performance management, and monitoring (Babiak & Thibault, 2009; Bingham et al., 2008; Connelly et al., 2008; Rodriguez et al., 2007). Future research including these dimensions will lead to more comprehensive findings.

Conclusion

Nonprofits are increasingly engaging in partnerships to achieve positive outcomes that can aid them in accomplishing their organizational goals and attain future success. Partnerships can affect all aspects of the management processes and practices. For nonprofits, human resources management is the key to organizational success.

This article contributes to the public management literature on collaboration, as there are few empirical studies that examine the impact of collaboration in general. There are even fewer studies that empirically test an important subject for nonprofit organizations; that is, their human capacity. According to the analysis, partnerships generally may enhance an organization’s human resource capacity. Critical resources obtained from partnerships and strengthened financial capacity of the organization can lead to an increase in nonprofits’ human resource capacity.

This article should set the stage for future research that addresses some of the limitations and goes beyond. First, we aggregated the outcomes of partnerships into one quantitative analysis. However, there is a need to probe qualitative differences in partnerships; these differences might lead to additional human resource costs and capacity losses in particular cases and might depend on the prevalence of funding requirements and how they might shape inter-organizational relations. Second, future research should include the costs of partnerships in models; only then, we could claim a more comprehensive analysis of whether the benefits of engaging in partnerships outweigh the costs and of the improvement of performance and efficiency. Third, we hope that this study sets the stage for future research, which should draw on a larger comparative data set, which accounts for the surrounding socio-economic and political environment. This would allow dissecting the types of staff (full-time vs. part-time) and of other external sources and their requirements (government, foundations, private, and international), examining the distinct characteristics of the partners (e.g., geographical location, field and scope of work, leadership, and internal governance and structure) and possibly including other forms of collaboration—besides partnerships—in the model. Nevertheless, this study provides novel results, as it is the first to empirically examine the impact of partnerships on nonprofits’ human capacity.

Footnotes

Acknowledgements

The authors want to thank the peer reviewers for the constructive feedback. We also gratefully acknowledge helpful comments from Stuart Bretschneider, Laura Langbein, Laurie Paarlberg, Kristina Lambright, Catherine Herrold and Deborah Trent.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes

Author Biographies

Khaldoun AbouAssi is an assistant professor at the Department of Public Administration and Policy, American University, School of Affairs. His primary research focuses on public and nonprofit management, examining organizational capacity, resources, and inter-organizational relations.

Suyeon Jo is a doctoral student at the Department of Public Administration and International Affairs, Maxwell School of Citizenship and Public Affairs, Syracuse University. Her research interests include public and nonprofit management, collaborative governance, and citizen participation.

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