Association for Public Policy Analysis & Management

Throughout the world, nonprofit organizations are playing a very prominent role in the delivery of public services and the representation of citizen interests.  However, the universe of nonprofit organizations comprises an increasingly diverse set of organizations with hybrid structures including for-profit and nonprofit subsidiary operations. This hybridization of nonprofit organizations is part of a broader movement within nonprofit and public management reflected in many diverse public–private partnerships, networks and collaborations. These arrangements can range from the very informal among staff in different organizations to formal, binding agreements among organizations such as government contracts with nonprofit organizations.  

However, the public and nonprofit management literature often conceives of hybridity very narrowly.  It focuses almost exclusively on organizational forms that are novel in the context of a tradition of sectoral distinctiveness — typically, an organizational form that mixes tasks associated with different sectors, as in the public-private partnership company created to deliver a public infrastructure project through commercial mechanisms or the nonprofit with a trading subsidiary.  But organizations are only containers for human activity.  In other research, we have argued that viewing hybrids as organizations tells us little about the causes or consequences of hybridization.  It is more useful to conceive of hybrids as arising from the contradictions and complementarities between different organizing principles or “institutional logics” – abstract ideas that have practical force when individuals draw on them to shape and legitimize the structures, practices, cultures and procedures of organizations (Skelcher and Smith 2015).   

This approach has two benefits.  First, it reveals how practices and standard operating procedures develop in and around the formal structures as individuals seek to resolve contradictions or tensions between different institutional logics – for example, between public service and market competition.  For example, one strategy might be to structure the organization so that it separates out a government’s commercial activities (something we call ‘segmentation’ [Skelcher and Smith 2015]), but there are also likely to be consequences for working practices, including the selection of staff, pay scales, and professional development.

Second, the idea that hybrids involve complementarities and contradictions between institutional logics draws attention to the potential performance promises and pitfalls inherent in different hybrid models and choices.  While hybridization can create serious governance complications for nonprofit organizations, this research paper also suggests that hybrid forms may actually improve the governance and performance of nonprofit organizations. Indeed, hybridization may increasingly be an asset in the competition for public and private resources, especially given the financial crisis in the US and abroad.  

Our paper is based upon extensive empirical research by the authors on hybridization in nonprofit organizations over a period of several years.  Our paper is also an especially good fit with the conference theme, “The Role of Research in Making Government More Effective.”  It will discuss and identify five challenges for managers and researchers working with hybrid organizations.  Thus, our paper will have direct relevance for both government policymakers, nonprofit practitioners, and nonprofit and public management scholars.