Professionalization and partnerships with businesses as drivers of foundation performance

Abstract

This research attempts to shed some light on two of the most outstanding debates ongoing in nonprofit management, i.e. professionalization and partnering with firms. Specifically, the study focuses on philanthropic foundations, and evaluates the influence of their professionalization (in terms of the ratio of paid employees to volunteers), and their engagement in partnerships with firms, on two productivity-related performance indicators, i.e. the ratio of total assets to number of beneficiaries, and the ratio of total revenues to number of paid employees and volunteers. Empirical research combines a survey to a representative sample of Spanish foundations, with information available from public sources. The results confirm the existence of (1) a “U-shaped” relationship between professionalization and foundations’ capability to reach more beneficiaries with lower assets; (2) a positive effect of professionalization on revenue generation capability; and (3) a positive effect of partnerships with businesses on the foundation’s asset-per-beneficiary ratio.