Judge A Nonprofit By The Partners It Keeps: How Does Cross-Sector Partnership Disclosure Influence Public Evaluations Of The Nonprofit?

Abstract

Cross-sector partnerships between nonprofit organizations, businesses, and the government have become a popular strategy for nonprofits to secure economic support, acquire scarce resources, advance their missions, and address larger and more complex problems in society. Despite these merits, these collaborative efforts are also controversial given the inherent distinctiveness and incompatibility between cross-sector partners. Under careful public scrutiny and confronted with consistently declining public trust, it is critical for nonprofits to strategically communicate about their cross-sector partnerships. However, current research on cross-sector partnership communication has not paid adequate attention to the nonprofit’s perspective, and rarely has it focused on publics’ reactions to nonprofits’ partnership disclosures. Taking a network approach, this study considers a nonprofit’s partnership portfolio as its egocentric network, which includes multiple partners that are simultaneously supporting the nonprofit. How a portfolio is configured, such as how many and with whom the nonprofit works, reflects the nonprofit’s discretion in partner selection and its embeddedness in alliance networks. When the nonprofit publicly communicates about the partnership portfolio, it becomes visible and can function as informational cues that influence publics’ perceptions of the nonprofit. To understand the effect and effectiveness of the partnership communication, this dissertation project is centered on two overarching questions: How does a nonprofit’s disclosure of different portfolio configurations (size, industry diversification, and organization type diversification) influence individual publics’ evaluations of the nonprofit? How do such portfolio communication strategies interact with nonprofit cynicism to affect publics’ evaluations of the nonprofit? To address these research questions, this dissertation conducted two experiments. Study 1 adopted a between-subject design to examine the main and interaction effects of portfolio size and industry diversification on individual publics’ trust, attitude, and intention to support the focal nonprofit. In addition, it tested the interaction effects between nonprofit cynicism and these two portfolio configurations on the communication outcomes. Study 2 adopted a between-subject experimental design to examine the main and interaction effects of portfolio size and organization type diversification, as well as how nonprofit cynicism influences the effects of these portfolio strategies. The key findings from the two studies revealed that having a small number of partners compared to a large number did not lead to a significant difference in publics’ evaluations of the nonprofit. Inclusion of partners within the same business industry compared to diverse industries also did not affect publics’ evaluations. However, displaying partners of the same organization type, as compared to different organization types, led to stronger intention to support the nonprofit. Both industry diversification and organization type diversification showed a significant interaction effect with nonprofit cynicism, but the effects were in opposite directions. As for industry diversification, as the level of nonprofit cynicism increased, individuals had more positive evaluations of the nonprofit when exposed to a heterogeneous portfolio than a homogeneous one. When it comes to organization type diversification, as the level of nonprofit cynicism increased, individuals evaluated a nonprofit less positive when exposed to a heterogeneous portfolio than a homogeneous one. The results also indicated an interaction effect between portfolio size and organization type diversification. The focal nonprofit was more favored when it disclosed a small number of partners that were in the same organization type than in different organization types. This dissertation advances the current literature on cross-sector partnership communication by providing empirical evidence on the effect and effectiveness of partnership portfolio communication from an individual public’s perspective. The findings also offer useful practical implications for nonprofits’ partner selection and portfolio development that can effectively respond to an increasingly cynical fundraising environment.