Research into the relationship between government and nonprofit organizations

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The transfer of responsibility for service delivery from governments to nonprofits has many implications for governance and the practice of public administration.   It has led to an ever increasing reliance of governments upon nonprofit organizations for delivery of services and increasingly blurred lines between the public and nonprofit sectors, changing the nature and shape of public organizations dramatically over the past two decades (Brinkerhoff & Brinkerhoff, 2002; Saidel, 1991).  Government is increasingly unable to deliver services without the capacity and technical expertise provided by the nonprofit sector. On the flip side, the nonprofit sector cannot continue to exist at its present scale without resources and support from governmental entities.

This research explores one aspect of the relationship between government and nonprofit organizations, governance. Boards are often assembled to provide oversight to both nonprofit and quasi-governmental entities and ensure proper management and legal compliance of these organizations.  Nonprofit boards (in theory) serve many functions which include shaping the policies, direction and actions of these organizations. In addition, individual board members are supposed to provide representation for the community and ensure that nonprofit organizations operate in a fiscally and ethically responsible manner.  

A great deal of research has been done about the nature and determinants of contractual relationships between the two sectors and the possible consequences and positive aspects of these relationships (Lipsky & Smith 1990; Ferris 2001; Eikenberry & Kluver 2004; Alexander 2000). However, very little is known about the depth of involvement by government officials and other elite actors on the boards of nonprofit organizations. Anecdotal and descriptive case studies suggest high levels of involvement by elite individuals in the governance of nonprofit organizations. However, few empirical examinations have studied this issue and none have addressed the role of elites at the local level. Elites are believed to be especially attractive board members because of their ability to give nonprofit organizations access to resources and ties to other elites including important government decision makers. These ties have important implications for civil society, public policy and democracy because of the role of the nonprofit sector as an extension of the "hollow" state. 

The impact of elites on governance in the corporate and public sectors is well documented and studied but similar research has not been conducted about their role in nonprofits (Mills, 1956; Lindbloom, 1982; Burns 1992).  In part, the lack of research is probably due to the smaller size of the nonprofit sector until recent decades when their role as delivers of public services increased the importance and visibility of the sector..  Additionally, the field of nonprofit research is still fairly young and its scope thus far, has focused more on descriptions of the nonprofit sector and internal operational issues than on issues of democratic accountability and governance.  This research seeks to increase the understanding of the complicated web of relationships between nonprofit and government organizations. Most importantly this analysis attempts to demonstrate the increasingly critical role that elites from the community have in the governance of nonprofit organizations and suggests possible implications of these roles for democracy and the practice of public administration. 

Role of Elites in Society

The classic work of C. Wright Mills (1956) created a picture of American elites that suggested that the upper echelons of society are enmeshed in a "set of overlapping 'crowds' and intricately connected 'cliques' (p. 11)." Mills went on to describe a system in which business, political, and military elites controlled important decisions that guided the federal government. The overlap of influence by elites has important implications for the health of democratic governance and may make access to decision makers more difficult for non-elites .  However, the work of Mills (and more recent works on the role of elites) have not fully examined the connection between elites in government and the nonprofit sector (Moore, Sobieraj, Whitt, Mayorova & Beaulieu 2002, other examples).

Nonprofits are often seen as one of the most important extensions of democracy and collective action in the United States. One theoretical explanation of the role of nonprofit organizations in society suggests that they are there to play a mediating role between individuals and the large impersonal institutions of society such as government and corporations (Berger & Neuhaus, 1977; Salomon 1987). The mediating role that nonprofit organizations play is often cited as important in the large and diverse American governmental system. Nonprofits in this role allow non-elite actors to use nonprofits as a means to express their preferences and their voice in policy matters. The extent to which organizations in the nonprofit sector are dominated by elites rather than representative of the larger communities may limit their ability to serve the traditional role of mediator for individuals.

Governance and Elites

The governance of organizations has long been a focus of interest both to those within particular organizations and the public at large. Governance in large part determines the direction and policy decisions undertaken by organizations, public, private and nonprofit. The decisions of both public and nonprofit organizations can have the opportunity to create significant distributional, economic and social effects on both individuals and society-at-large. Both public and nonprofit organizations receive either direct or indirect support through tax relief from the public. Governance, (especially outside of the democratic process), therefore, deserves further research consideration.   

The power of organizations in private and nonprofit sectors continues to grow in relation to policy and political outcomes in the United States.  This is especially true in states in which the public sector plays a limited role or has significantly retreated. The limitations placed on the size or role of government has led to increased contracting out of services once supplied directly by government (Saidel 1991; Boris & Steurle 1999).  Regardless of how or why, this condition of the government providing fewer services and/or products has led to significant growth in the importance of the nonprofit sector stepping in to fill the gap. This, in turn, calls for increased attention to the role that elites play within these organizations.

The increasing interdependence between public and nonprofit organizations has blurred the line between public organizations and private charities, often making it hard for recipients of services and the public to understand where one sector ends and another begins (Craig, Taylor & Parkes 2004; Saidel 1991).  The strong ties between these sectors have also raised questions about the ability of either sector to act independently from the other, since governments no longer have the capacity to take back control over delivery of services and many of the services provided by nonprofits could not be offered without continued government support (Saidel 1991). The merging trends have strengthened the role that nonprofit organizations play in the policy process; both on behalf of their own organizations and the populations of clients they represent (Boris & Steuerle 1999).  

Many researchers have examined relationships between elites as a method of determining the impacts that intertwined relationship structures have on organizations and the outcomes they produce. It has been shown repeatedly that individuals in advantageous social positions obtain additional advantages socially and financially from their relationships to others (Krackhardt 1990; Burt 1992, 1997). For example, individuals that are able to land a gate-keeping role are more powerful in social networks than other individuals because they have the ability to control access to other individuals or groups (Burt, 1997).

One example of social ties comes in the form of interlocking elite structures. Interlocking elites are those individuals who hold more than one formal position on two or more organizations' boards. Dye (1990) spoke of multiple interlockers in the book, "Who's Running America," and made the argument that holding multiple positions signified status.  Multiple interlockers are those individuals of considerable stature within a community or the corporate world who possess three or more positions on various boards. These individuals serve on boards for many reasons including status and access to other elites in the community.

The role of elite interlocks in the nonprofit sector is a subject that has only recently been a topic of interest.  As the nonprofit sector has grown and become a more integral part of the economic and social life of communities, the degree of interconnectivity that exists between elite interlocks and the boards that govern them, also becomes more of a concern.  A number of articles and books have explored the pattern of relationships that exist among persons in power within the nonprofit sector but not the possibility of interlocks across the public and nonprofit sector (Guo & Acar, 2005; Brown & Iverson 2004; Markham, Johnson & Bonjean, 1999). 

This paper examines interlocking directorates that exist between nonprofit organizations, government, and quasi-government agencies operating in three southwest cities of various sizes, Las Vegas, Nevada, Reno, Nevada, and Phoenix, Arizona. It investigates the role that interlocking elites play in the leadership of nonprofit boards and attempts to determine if links exists between the board members of nonprofit organizations and elected and appointed boards of government/quasi-government agencies across these three cities. Elites from the public and nonprofit sectors make attractive board members because of their connections to the local community, resources, and their influence upon policies. We expect that elite individuals are sought by nonprofit organizations for these reasons.

Moore, et al (2002), suggests that benefits accrue to individuals serving on multiple nonprofit boards.  "Research on national elite networks has shown that persons in central network positions - with extensive ties to other elites - are generally more prominent, visible, and active in policy formation than their less central peers. Network ties are sometimes viewed as social capital, offering individuals and collective groups valuable interpersonal connections. Similarly, organizations probably benefit from extensive top-level connections to other organizations in their own and other sectors," Moore et al (2002). 

Dye (1990) lists additional reasons for power elites to aspire to be on the board of a nonprofit organization.  He stated that sources of elite cohesion, such as similar experiences on nonprofit boards, can help individuals enter an elite inner circle of individuals in society. Entry into this circle allows them to receive selective benefits because of those ties. Selective benefits may include things like the ability to access key decision makers or information that may help an individual compete for business or personal gain.

Interlocking Elites as a Network Structure

We can also think of interlocking directorates as a form of network tie.  Each overlap in membership between the leadership of one organization and the leadership of a second organization forms a tie or a link. If more than one such link or tie exists, then it is likely that the bond between the two organizations is even stronger.   Following Moore et al (2002), we assume that individuals who sit on the same corporate or nonprofit board or the same government body or advisory committee know one another through common participation in regular board or committee meetings. These ties have the effect of structuring exchanges between organizations within the community. The more connected an organization and the more advantageous the placement of the organization is in the resulting network structure, the more likely the organization is to accrue benefits from these ties.

Previous research into the impact of structural relationships between organizations suggests that the costs and benefits for individuals, organizations and the community may vary greatly by position and role. These relationships have the potential to create distributional consequences for the board members, organizations, and the community (O'Toole & Meier, 2006). Networks and/or network position have a positive effect on perpetuating and increasing political influence (Laumann & Knoke 1987; Fernandez & Gould 1994).  The findings related to additional political influence based upon network position suggest that it would be advantageous for nonprofit organization to recruit elites as board members.  Another advantage to recruiting elite board members is the potential to enhance an organization's network position as elites gives access (through their own network) to important others with whom they have relationships and/or access to information that could be helpful (Burt 1983).

However, some evidence suggests that interlocks between boards will have little effect on performance (Pennings 1980; Burt 1983; Richardson 1987; Mizruchi 1996).   The lack of positive effect in some instances is related to the cost of maintaining the social relationships between organizations. Studies of for-profit organizations have only found loose and inconsistent relationships between interlocking boards of directors and profitability (Mizruchi 1996; Mizruchi & Stearns, 1988; Pennings, 1980).

Linkages between the public and nonprofit sector have been discussed anecdotally and seem to facilitate the exchange of staff, facilities and supplies (Smith & Lipsky, 1993).  Similar patterns have been found in for-profit manufacturing in which equipment (Uzzi 1997) and research and development (Bouty 2000) exchanges were made.  These types of exchanges suggest a resource exchange and interdependence between the sectors.  However, that the interlock relationships between the sectors are more complex and these relationships too might also signal use of board membership for monitoring and oversight.

The lack of connection between interlocks and profitability suggest that an alternative explanation of the occurrence of board interlocks might have more to do with oversight or monitoring (Mizruchi, 1996). Studies of for-profit organizations have shown that interlocks increase as the financial performance of the organization slips (Richardson 1987; Mizruchi & Stearns, 1988). This suggests that interlocks occur so an interested party can intercede in the workings of the organizations rather than to increase profitability or organizational effectiveness. The pattern further suggests that nonprofit organizations in some circumstances might share board members with other organizations not to gain advantage but as a form of oversight of one organization over the other organization. Interlock as oversight might be one reason that a government official volunteers to giver time to a board that delivers an important good or service to that individuals constituents.

The use of nonprofit board membership as an oversight function suggests that many elites may choose to sit on a nonprofit board, not for the sake of gaining status, but for the sake of controlling their interests in the organization.  These interests may vary widely from individual to individual and could include: overseeing the expenditure of grant money, directing policies of the organization to advance the interests of one group over another, or using the organization as a means to create status or electoral advantage in the community.

Elites and Nonprofits

The boards of nonprofit organizations are legally and ethically responsible for their governance.  Organizational boards have the responsibility of ensuring that organizations carry out their mission and expend resources in a fiscally responsible manner. However, it has been argued that the role of board members extends far beyond their legal and ethical responsibilities to nonprofit organizations and communities.  Abzug and Galaskiewicz (2001) argue that nonprofit board members of nonprofit organizations "come to represent the organization and become a basis for its legitimacy claims" (p.51).

The research of Abzug and Galaskiewicz (2001) found that the demographic characteristics of directors of nonprofit boards in six metropolitan areas in 1931, 1961, and 1991 were not representative of the populations of their respective cities.  Instead, the role of director was dominated by men, whites, college-educated people, managers, and professionals. Over the 60-year period of the study, there was an increase in non-whites, and women, as well as an increase in the proportion of board members with high educational and/or occupational status.  This suggests that even though the power of race and sex is declining, the role of elite education and occupation is increasing in the governance of these organizations.

Elite actors have always been part of the governance structure of nonprofit organizations. The earliest nonprofit organizations arose out of the guilded age of the late 1800s with the emerging upper class creating new organizations to provide for social welfare and improve the environment of cities (Dimaggio & Anheier 1990).  However, the recent shift in the funding patterns of nonprofit organizations from being primarily dependent on donations to increasingly reliantce on government funding (and other social changes) all suggest a declining influence of traditional social elites in the area of governance.  The decline of traditional social elites, such as the wealthy, might be giving rise to a new class of elites that includes government actors and technical specialists as increasingly important targets for board membership.

There is considerable debate about the importance of elites in the nonprofit sector but examination of their role has primarily centered on the donors.  It is argued that donors have considerable power in setting the agenda for nonprofit organizations (Galaskiewicz 1985; Ostrander 1995; Schervish & Havens 2001;Useem 1984, 1987). Other research has focused on the role of elite service within foundations, federated donors, and local corporations that make funding decisions (Galaskiewicz 1985).  While mass market fund-raising has broadened the participation of individuals in giving, elites -- because of their larger gifts and greater amount of attention to nonprofits -- still play a large role in setting the agenda for communities.

              Other advantages also exist for nonprofits to attempt to attract elite board members. Earlier research has also shown that ties to elites increase the number of new organizations and reduces the chance of organizational death among day care centers (Baum &Oliver 1991; Baum & Singh 1994) and voluntary associations (Singh, Tucker & Meinhard 1991; Singh, House & Tucker 1986).  More recently Galaskiewicz, Bielefeld, and Dowell (2006) found that ties to urban elites increased the status of nonprofit organizations.  This pattern was even stronger for nonprofit organizations that had better reputations and organizations that were more donative in nature.   In comparison to less connected nonprofits, donative organizations with ties to "urban elites" experienced faster revenue growth (Galaskiewicz, Bielefeld & Dowell, 2006)

Ties between board members through service on the same board benefit nonprofits because they create status hierarchies which are key to convincing donors to invest in the nonprofit's mission (Fremont-Smith 2004). These status hierarchies make these organizations more visible to donors, the media and eventually the public at large. For example, celebrity appearances and causes often receive a great deal of attention that has little to do with the general public belief in the mission of the organization. Donors have an interest in being associated with something worthwhile which also helps enhance the status of the individuals independent of the organization.

So far, the research we have examined has mainly focused on the role that private sector elites play in advantaging certain nonprofits over other, but little research has examined the role that government elites. The expertise of government elites might be more in line with managing organizations to achieve a mission. Ostrower (2002) suggests that wealthy and corporate managers believe they have the solutions for organizational problems but these solutions often stem from managerial and class backgrounds which can conflict with nonprofits' missions. The presence of such board members might force nonprofit organizations to take on less than ideal solutions in order to continue to assure donations and continued participation from these individuals.  Government officials, through their experience with public organizations, in contrast, are more likely to understand the need to think in terms of mission rather than cost or efficiency. 

The role of government elites has been little studied in terms of their participation on boards. The inclusion of government elites on nonprofit boards might in some ways be more desirable than inclusion of their corporate counterparts because of specific insider knowledge that these elites possess of governmental workings and priorities.  This might help nonprofits gain the upper hand in obtaining governmental contracts and grants or allowing them to shape regulations about service delivery.  The ability to gain inside information about these priorities or shape regulations affecting contracts or service delivery has the potential to create a competitive advantage for nonprofits seeking governmental support. 

Additionally, governmental elites can provide insider information about governmental funding and contracts that their private sector counterparts will not have access to or at least may have less complete information about the desires of the funding organization. Government funding of nonprofit organizations has been on the rise since the 1960's through the use of contracts, grants, and tax credits and deductions (Boris & Steuerle 1999). Recent estimates indicate that government funding accounts for more than 50% of all nonprofit revenues (Lipsky & Smith 1990; Brooks 2000).

The relationship between nonprofits and government entities has led to concerns that the nonprofit sector has become too dependent upon government spending (Boris & Steuerle 1999; Craig, Taylor & Parkes 2004).  Many nonprofit organizations around the country benefit from direct and indirect subsidies from all levels of government. These subsidies take many forms, including grants, contracts, and tax benefits given to nonprofit organizations because of the special role they play in communities. These close ties make nonprofit organizations not only eager to work with government but also make government dependent upon nonprofit organizations (Saidel, 1991) .  This creates a situation in which each has a vested interest in the health and survival of the other.

 

Methods

The focus of this study examines and traces the connection between interlocking elites of selected nonprofit organizations and government/quasi-government agencies in three Western cities of various sizes: Las Vegas and Reno, Nevada and Phoenix, Arizona. The first phase of the study focused on Clark County, Nevada and drew a purposeful sample of 67 nonprofit organizations and 24 governmental/quasi-governmental agencies to analyze the frequency of board interlocks between nonprofit and governmental entities.  The dataset for phase one of the study included 1,424 individuals that were involved on boards in either the public or nonprofit sector or both.  The second phase of the study attempts to examine this phenomenon over three Western cities, Reno, Las Vegas and Phoenix. This phase drew a random sample of 150 501(c)3 nonprofit organizations in each city as well as all of the board members elected or appointed to governmental or quasi-governmental boards.  

 

Data and Methodology, Phase I

The database generated in Phase I of this paper was formulated from a number of nonprofit organizations based within Clark County, Nevada.  The data includes nonprofit organizations, government/quasi-government agencies and the individuals who currently occupy positions on the respective board of directors.  The list of current board members names for each nonprofit organization, as well as the government agencies, was obtained from the relevant nonprofit and government agency websites. The Phase I data includes nonprofit organizations from many different sub-sectors including: advocacy and human rights; health and medicine; education, literacy and literature; children and youth; arts and culture; community; homeless and housing; animals; religion; and environment.  There were a total of 67 nonprofit organizations and 24 government agencies included in the initial sample.  

Overall, the data included 1,424 individuals,  1,072 were serving on nonprofit boards and the remaining 352 serving on government boards.  Persons holding positions on two or more nonprofit organizations created linkages with individuals appearing more than once and being identified by the same name.  If a name appeared with the identical first and last name and a middle initial appeared on one board and not the other, then it was assumed that these individuals were the same person.  Additionally, some of the same names of board members on the various websites were abbreviated, included initials and used surnames (e.g., Teresa for Terry or Tom for Thomas).  In these cases, additional information was gathered to ensure that this was the same person and not a different individual with a similar name.  This method used to trace the linkages between the individuals and the nonprofit organizations was conducted manually with the objective being to reveal the frequency of ties among nonprofit organizations as well as the commonality between board members who served on the nonprofit organizations, government agencies or both.  

Data Analysis Phase I

The analysis found are a total of 150 incidents of individuals serving on multiple boards. The level of involvement by individual board members varies greatly with some individuals serving on as many as ten boards and some serving on only one nonprofit or one government board.

Table 1.1 reflects the number of people who serve only on nonprofit organization boards, only on a government board and then the frequency serving on both their government board as well as a nonprofit board.

Table 1.1: Nonprofit and Government - Board Membership

# Of Appearances on List

# Of People Per Appearance on List

# Who Serve Only on a Gov. Board

# Who Serve Only on a Nonprofit Board

# Who Serve on Both Types of Boards

% Of Total Who Serve on Both Type Boards

% of No. of People Per Appearance Who Serve on Both

% of No. of People Appearing Multiple Times and Who Serve On Both

Once

108

89

21

0

0.00%

0.00%

0.00%

Twice

12

7

3

2

1.33%

16.67%

3.45%

3 times

9

5

2

2

1.33%

22.22%

3.45%

4 times

11

9

3

2

1.33%

18.18%

3.45%

5 times

2

0

0

2

1.33%

100.00%

3.45%

7 times

3

0

0

3

2.00%

100.00%

5.17%

8 times

2

0

0

2

1.33%

100.00%

3.45%

9 times

1

0

0

1

0.67%

100.00%

1.72%

10 times

2

0

1

1

0.67%

50.00%

1.72%

Totals

150

110

30

15

10.00%

A breakdown of the number of times the name appears, whether that individual serves on a nonprofit or government/quasi-government agency and the frequency of each is noted. There are a total of 150 names occur on the boards of more than one nonprofit or governmental/quasi governmental agency; however of those 150 names one person may serve on either a nonprofit, government or both types of boards, while another person may serve on as many as ten boards with some of those again serving on a nonprofit, government or both types of boards. As the table shows, a healthy percentage of people appear on multiple government and nonprofit boards. Thus, our analysis reveals a strong connection between government and nonprofit boards.

Table 1.2 examines the organizations that have board members on three or more nonprofit boards. The Nevada Ballet Theatre and the Clark County Public Education Foundation had a total of eight board members which were also active on the boards of other nonprofit organizations. The remaining nonprofit organizations with interlocking board members had much less frequent occurrences of board interlocks in the organizations examined. Of individuals that served on multiple boards in this phase of the research the highest number of nonprofit boards an individual served on was four. This is somewhat in contrast with our findings in the second phase of our research when the nonprofit organizations were chosen at random (discussed below).

TABLE 1.2 Nonprofit Board Members that Serve on Three or More Boards

Name of Nonprofit Organization

1

2

3

4

5

6

7

8

9

10

11

12

13

14

Total # of Brd Mbrs in Same Org.

Clark County Public Education Foudation

X

 

X

 

X

 

 

X

X

 

 

X

X

X

8

Nevada Ballet Theatre

X

 

X

X

X

X

X

X

 

 

 

 

X

 

8

University of Nevada Las Vegas Foundation

 

 

 

 

 

X

X

 

 

 

 

 

X

 

3

Better Business Bureau of Southern Nevada

 

 

 

 

 

 

X

 

 

 

X

 

 

X

3

United Way of Southern Nevada

 

X

 

 

 

 

 

 

X

 

 

X

 

 

3

Foundation for an Independent Tomorrow

X

 

 

 

 

 

 

 

 

 

 

 

 

 

1

Las Vegas Philharmonic

X

 

 

 

 

 

 

 

 

 

 

 

 

 

1

I Have a Dream Foundation

 

X

 

 

 

 

 

 

 

 

 

X

 

 

2

Nevada Child Seekers

 

X

 

 

 

 

 

 

 

 

 

 

 

 

1

Summerlin children's Form (Kids to Kids)

 

X

 

X

 

 

 

 

 

 

 

 

 

 

2

Volunteer Center of Southern Nevada

 

 

X

 

 

 

 

 

 

 

 

 

 

 

1

Nevada Cultural Affairs Foundation

 

 

 

X

 

 

 

 

 

 

 

 

 

 

1

Ronald McDonald House Charities of Greater L.V.

 

 

 

 

X

 

 

 

 

 

 

 

 

 

1

Children's Miracle Network

 

 

 

 

 

X

 

 

 

 

 

 

 

 

1

Las Vegas Art Museum Foundation.

 

 

 

 

 

 

 

X

 

 

 

 

 

X

2

Goodwill Industries of Southern Nevada

 

 

 

 

 

 

 

 

X

 

 

 

 

 

1

Nevada Community Foundation

 

 

 

 

 

 

 

 

 

X

 

 

 

 

1

Westcare Foundation

 

 

 

 

 

 

 

 

 

X

 

 

 

 

1

Westcare of Southern Nevada

 

 

 

 

 

 

 

 

 

X

 

 

 

 

1

Las Vegas Natural History Museum

 

 

 

 

 

 

 

 

 

 

X

 

 

 

1

Opportunity Village Foundation

 

 

 

 

 

 

 

 

 

 

X

 

 

 

1

Total # of Organizations Each Brd Mbr Serves On

4

4

3

3

3

3

3

3

3

3

3

3

3

3

44

Overall, the first phase of our analysis demonstrated that interlocks between nonprofits and government were actually fairly common in Las Vegas. Many of those individuals that served in either elected or appointed positions also served on nonprofit boards of directors. The findings from this initial analysis led us to continue to investigate the topic of interlocking boards of directors further through the collection of data across different cities.

 

Phase II: Data Collection

The data collection in phase II used the National Center for Charitable Statistics, Business Master File to draw a random sample of 150 nonprofit organizations in each city. The researchers then collected board data for each of these nonprofit organizations from the organization's Form 990 information return filed with the IRS. The researchers then used the same process described in Phase I to identify interlocking board members.

Phase II data examined the interlocks between nonprofit boards and governmental or quasi-governmental boards in the city of Las Vegas. An initial examination of the data found that a total of nine interlocks existed between nonprofit boards and government elected/appointed officials. In Phoenix, we only found two instances of interlocks between nonprofit and governments. Finally, in Reno we saw the highest number of interlocks between nonprofit organizations and government organizations with a total of sixteen interlocks.

In Las Vegas, the number of interlocks between nonprofit organizations is much more dramatic than those between governments and nonprofits.  While Reno, by far, had the largest number of interlocks in the random sample of nonprofit boards, the Las Vegas interlocks held a higher number of board positions. Las Vegas board members that were interlocked more often sat on not just two boards but averaged 2.9 board positions while the all of the board members with interlocks (except one) held only two board positions in the other two cities.    

Table 2.1 -Summary of Frequency of Interlocks between nonprofit organizations

Frequency of Interlocks

Las Vegas

Reno

Phoenix

5 Interlocks

5

0

0

4 Interlocks

1

1

0

3 Interlocks

1

0

0

2 Interlocks

13

41

7

The pattern of interlock relationships among nonprofit boards in Reno suggest a different type of interlocking relationship. In Reno, nonprofits often displayed relationships in which not just a single member served on two of the same boards instead multiple board members served on the same boards together. This contrasts sharply the pattern in Las Vegas in which often individuals sat on many different boards but this type of overlap in which multiple individuals sat on boards together was much rarer. This is an example of multiplexity or the several ties being shared between organizations. The display of multiplexity in this case suggests that these organizations were trying to form strong ties across the interorganizational boundaries rather than to attempt to gain access to information across the network. The pattern in Las Vegas and Pheonix boards was much different.   Boards in Las Vegas were also heavily interlocked but they tended to be interlocked with many other nonprofits not just a single nonprofit organization. 

Table 2.2 - Summary of All Interlocks Across Cities

Nonprofit to Nonprofit

Nonprofit to Government

Total Interlocks

Reno, NV

44

16

70

Las Vegas, NV

38

9

47

Phoenix, AZ

7

2

9

*Interlocks are counted as total number of nonprofit organizations linked together (For example: If an individual serves on 4 boards then the number of interlocks equals 3, if they serve on two boards the number of interlocks equals 1)

This summary table shows that both Las Vegas and Reno have a great many more interlocks between nonprofit organizations and between nonprofits and governments. Reno the smallest city examined had the most interlocks of all types. This is likely due to the smaller number of elites in this city. Las Vegas similarly had a larger number of interlocks compared to Phoenix.  It appears as the size of the city increases the influence of elites and the importance of their role may decrease or become diluted.

The differences in the patterns of interlocks between nonprofit organizations are even more dramatic when examining the network diagrams of interlocks between the three cities (Figures 2.1-2.6). [i] Â The network diagrams display the interlocks between nonprofit organizations. In Reno, a larger number of organizations are interconnected to one another through their boards of directors. In Las Vegas, the interlocks seem to form small subsets of organizations that are interconnected. As we further examined the pattern in Las Vegas these smaller subsets often were made up of organizations that either had similar missions, e. g. education or related missions. Finally, the network diagram of Pheonix nonprofits reveals that while some interlocks exist there are fewer inter-relations between organizations and organizations tend to be more isolated than in the other two cities.

We also diagramed the networks that resulted from interlocks between the government and nonprofit organizations in the three cities. Once again we found very distinct patterns emerged. Reno (Figure 2.4) the pattern that emerged was similar to the pattern of interconnections between nonprofits with almost all of the organizations interconnected. In Las Vegas (figure 2.5), the domination of the Clark County Government became apparent with the largest number of organizations connected to the County. Clark County in many ways is unique because of the large size of the County budget and role in Southern Nevada relative to other governments and this is reflected in the network pattern that emerged. The Phoenix diagram (figure 2.6) once again reveals a small number of inter-related organizations and few patterns to these relationships.

Conclusion/Discussion

 

The main purpose of this research was to examine the prevalence of interlocks among nonprofit organizations and between nonprofit organizations and local governments. The analysis demonstrated that many interlocks between these organizations exist. Often the linkages between organizations are associated with larger and more successful nonprofit organizations or organizations that have substantial ties to core governmental functions such as education or transportation.

Our initial non-random sample of Las Vegas nonprofits and governmental entities suggests that the role of elites in governance of nonprofit organizations at the local level is fairly pervasive. The purposive sample found that many governmental officials do serve on nonprofit boards and in a few cases these individuals serve on as many as ten different boards. The high number of boards that these individuals serve on raises several important questions about the level of influence that this small number of individuals holds over organizations in the Las Vegas area. In addition, the high number of organization in which these individuals participate may also lessen their ability to govern these organizations effectively. Some of the organizations involved are fairly large and complex and the larger numbers of organizations these individuals are involved in may limit their ability to provide adequate oversight and governance.

Interestingly, the pattern of interlocks across the three cities suggests that elite interlocking structures might be more prevalent in smaller communities. Reno, the smallest city in our analysis has by far the highest number of interlocks among nonprofits and between nonprofits and government. The apparent pattern is likely the result of two different forces: the number of "elites" and the diffusion of influence of nonprofits and other organizations in larger cities. In larger cities, there are a larger number of elite actors as well as a larger number of organizations competing for the time and talents of these actors. This resulted in fewer interlocks in the samples in both Las Vegas and Pheonix. Larger cities also have more diffuse political interests and so the need for government officials to spread out across groups to appeal to more specialized constituencies would be greater.

Further research into whether or not the individuals who serve on the board of directors of the nonprofits are prominent business leaders would help determine if there is an elite power structure within Las Vegas, Reno and Phoenix. Previous studies on the national level have demonstrated the importance that nonprofit organizations now play in shaping the outcome of many policy issues. In our analysis, it is easy to see this correlation between the two if one has lived within one of these communities for a period of time; however that type of knowledge is not quantifiable and for another discussion. However, we believe the main findings of this analysis show support for a general notion that views major nonprofit organizations in local communities as part of a dominant governance network.

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