Interorganizational Relationships among Nonprofits in the Aftermath of Welfare Reform

One of the most significant consequences of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (P. L. 104-193) was its impact on the decades-old partnership between the state and the voluntary sector. It affected relationships among nonprofit organizations as well as those between nonprofit agencies and public welfare departments (Bloom, 1997; Burt, Pindus, & Gapizzano, 2000; Cnaan, Wineburg, & Boddie, 1999). Little research has assessed how the legislation affected the patterns of interorganizational relationships that have emerged among providers (Allen & Kirby, 2000; Besharov, Germanis, & Rossi, 1997; Hassett & Austin, 1997; Perlmutter, 1997). Most recent research on the organizational effects of PRWORA has focused on public agencies (Carnochan & Austin, 1999), with only a few studies examining its effects on private nonprofit organizations (Alexander, 2000; Withorn, 1999). Research on community well-being, however, has long established the importance of organizational infrastructure at the neighborhood level (Etzioni, 1996; Figueira-McDonough, 1995; Warren, 1970). Other research has revealed how changes in nonprofits' external environment produce new patterns of intraorganizational behavior and interorganizational relationships, including alternative resource development strategies and the creation or expansion of collaboratives and networks (Alexander; Bischoff, 2001; Bischoff & Reisch, 2000; Bielefeld & Scotch, 1998; Reitan, 1998). Frameworks for analyzing the degree of competition or cooperation among nonprofits often assume that alterations in the political-economic environment are reflected in the nature of their interorganizational ties (Bailey & Koney, 1996; Bardach, 1998; Withorn, 1999). Research on such relationships is critical at this juncture because of the unforeseen consequences of welfare devolution (Baker & Doorne-Huiskes, 1999; Bielefeld, 1996; Brown, 1997; Young, 1999). These consequences include an increase in the demand for nonprofits' services, particularly emergency services, even as welfare caseloads have declined since the mid-1990s (Brunner, 1996; DiPadova, 2000; Eisinger, 1999; Withorn). Building on this research-which appears to reflect a shift in responsibility for social support from the public to the nonprofit sector, we analyzed the effect of PRWORA on interorganizational relationships among 90 nonprofit human services organizations in two counties in southeast Michigan. We hypothesized that a policy change of this magnitude was likely to alter the pattern of interorganizational relationships among nonprofit human services agencies, particularly those that serve low-income populations (Abramovitz, 2002; Bischoff, 2001). Welfare and Welfare Reform in Michigan The state of Michigan passed several significant welfare reforms before the 1996 federal changes. To some extent Michigan's reforms served as one of the models for PRWORA. Beginning in 1992, four years before the passage of PRWORA, the state shifted the emphasis of its welfare policies from entitlement to personal responsibility. As a result nonprofits in Michigan have had more time than their counterparts in most other states to acclimate to the changes produced by welfare reform. The findings from this study may, therefore, underestimate the effect of PRWORA on nonprofits in other states, because the data collected used 1996 as the baseline year. The agencies in this study were drawn from two adjacent, yet very different, counties in southeastern Michigan. Wayne County (population about 2.1 million, dominated by the city of Detroit) is much more populous and demographically diverse than Washtenaw County (population about 323,000), which comprises smaller cities such as Ann Arbor and Ypsilanti and some rural areas (U.S. Census Bureau, 2000). The proportion of Wayne County's African American population is more than three times that of Washtenaw County (42 percent compared with 12 percent); Washtenaw County has considerably higher median household income ($51,286 compared with $35,357) and substantially lower rates of poverty (8. …