Understanding Government-Nonprofit Funding Agreements in Human Service Organizations Using Resource Dependence Theory and Organizational Legitimacy

Government-nonprofit funding agreements are often laden with numerous funder-driven imperatives that dictate how financial resources are to be used within human service organizations. The following study adopts resource dependency theory and organizational legitimacy as a framework to better understand how nonprofits experience the acquisition and use of monies captured through government grants. Thirty-two leaders from Canadian nonprofit human service organizations were interviewed, and data from qualitative thematic analysis identified resource dependencies within funding eligibility criteria, funding distribution, and funding reporting mechanisms. Tenets of resource dependency theory and organizational legitimacy are then used to further enhance understanding of government-nonprofit funding agreements, including a discussion on the role of resource typologies, value diffusion, and interstructuring.