essay

Structure and Financing of Human Services Organizations 97

rf Rights 2, Pub. Law 104-168 (110 Stat. , this amendment seeks to control "exces- pay of nonprofit executives. Excess benefits bject to tax and penalties and are defined as transaction in which an economic bene- provided by an applicable tax-exempt ization. . . to or for the use of any disqual- p€rson... exceeds the value of considera- received for providing such benefit" eFed's Tax Board,2004). The independence :independent sector is further diminished extent that government can now decide on nits of nonprofit executive pay.

yses of Contracting

the years since contracting for services , rholars have studied the processes and the ts used by government in delivering ser- rhrough private organizations. More than Fnonprofit organization social services are or with government funds, whereas none n 1960. The magnitude of the impact of cting is dramatic. Kamerman and Kahn r, writing for the Finance Project, say that f, the workers in New York State social ser- gencies worked for organizations that were rted to some extent by public funds. chusetts had twice as many social services ns in agencies funded in that way than it ,bli.ly employed workers. According to r (2005, p. 65), citing his own 2001 esti- and Lauffer (1997), "more publicly funded t services are provided via contractual ernents than are provided directly by pub- ployees. By some estimates, upwards of f all human services funding may involve stirg by the year 2010." rrence L. Martin (2005) has studied the nance-based contracting approach now ; widespread popularity in the human ser-

'erformance contracting, developed by the of Federal Procurement Policy and state sing officers as well as The National nion of State Purchasing Officials, essentially

specifies standards of performance, such as qual- ity, timeliness, and quantity, and the expected outcomes of contracts. Based on his analysis of performance-based contracting in several states, he concluded that the process had accomplished its primary objective of requiring contractors to focus on performance results. Martin also found that quality, outcomes, and outputs could be considered and treated together in determining the conformity to performance standards of a contract and that all contractor compensation need not be tied to performance. There was also evidence that performance-based contracting did not necessarily lead to "creaming," where cases more likely to be successful are chosen in order to improve performance outcomes. Martin asks whether performance-based contracting works, and he concludes, based on studies in sev- eral states, that it does and that it is accomplish- ing its objectives.

The American Public Human Services Association (2005), which is largely an associa- tion of state public agencies, agrees that the fed- eral expectations for public services and contracts should be focused on outputs of services. One of their recommendations is that "the focus of per- formance measurement and assessment should be a set of simple requirements and outcome measures that emphasize the positive incentives for high performance" (p. 113). They further sug- gested the avoidance of narrow process measures and a focus on actual outcomes for clients.

Roland Zullo (2006) studied contracting in the child welfare field. He sought to determine whether the nature of contracts was coercive, competitive, or collaborative. Coercive contracts, he suggested, were those in which the more powerful of the parties attempted to delegate the more difficult cases to the less powerful. Competitive contracting is designed, Zullo sug- gested, to resolve governmental delivery system shortcomings. In collaborative contracts, both parties work for long-term agreements for the purpose of best using their joint resources.

Zullo (2006) concluded that the relation- ships were more collaborative than coercive or