The impact of purchase of service contracting on voluntary, community-based, social services organizations

accounted for 10%o of all revenues reported by all voluntary organizations.These data from the NSNVO demonstrate that voluntary organizations have a substantial role in the Canadian economy (Statistics Canada, 2004,p. 1 0).In addition, voluntary organizations are the major vehicle for citizen engagement.According to the National Survey of Giving, Volunteering, and Participating (NSGVP), almost 22 million Canadians-9l% of the population aged 15 and older-made donations to charitable and non-profit organizations in 2000.The estimated financial support provided totalled more than $5 billion.Social services organizations were the third largest beneficiaries, receiving $503 million, or 70%o of the total amount of charitable donations.The NSGVP also indicated that every year Canadians donate an estimated 1.1 billion person-hours to voluntary activities-the equivalent of more than 549,000 full-time jobs.Among them, 20o/o of volunteer hours were directed to social selices voluntary organizations (Statistics Canada, 2001).In contrast, according to the NSNVO (Statistics Canada,2004) voluntary organizations reported a combined volunteer complement of over 19 million that contribute more than 2 billion hours of volunteer time, or the equivalent of more than 1 million full-time jobs, in 2003 (p.31).The number of volunteers reported by the voluntary organizations (NSNVO) exceeds the number of volunteers claimed by the population (NSCVP), because people may volunteer with more than one organization.The NSNVO also indicated that although social services organizations represented only 11.8% of organizations, they accounted for 18.8% of all volunteers and 20.5%o of total volunteer hours. 6-The current restructurinq of qovemment-voluntarv sector relationships in CanadaThe relationship between the voluntary sector and Canadian governments is undergoing fundarnental changes (Phillips, 2003).The current development of partnerships between the voluntary sector and govemment makes this research problem more essential.From the perspective of Phillips, two important factors have caused this transformation: "the nature of the government" and "the character of the sector" (p.17).On one hand, public sector restructuring in the 1980s and 1990s downloaded the provision of services to voluntary organizations and expanded contracting-out funding mechanisms.The devolution of the government calls for volunteerisrn, self-sufficient communities and a vibrant civic society to replace the original responsibility of goverrunent for welfare.Governments expect the voluntary sector to build social capital and enhance social cohesion for Canadian society.On the other hand, the character of the voluntary sector is rapidly evolving from the charity model to the model of civil society.Instead of providing material assistance or moral guidance to the disadvantaged, the civil society concept emphasizes "uncoerced association" and "active democratic participation" to empower the citizens and build communities for the disadvantaged or not (Putman 2000; wa7zer,1998; cited in Phillips, 2003,p.24).This model requires an "enabling state" (Philips, 2003, p24) to provide space for voluntary organizations and engage them in public policy dialogue.Under the current restructuring of govemment- voluntary sector relationships, voluntary organizations have started to think and act like a sector.According to Phillips, voluntary organizations are expected by Canadian organizations investigated by the Child and Family Service Research Group (2003), from the Faculty of Social Work at the University of Manitoba, demonstrated that, in 2002, government revenues comprised 53.1 percent of all revenues for voluntary organizations that received government funding.Among these sources of government funding, provincial funding (mean amount $640,094.30,standard deviation $2,577,003.00)dominated federal funding (mean amount 5167,620.92,standard deviation 5496,537.29)and civic government funding (mean amount $152, 870.20, standard deviation $823,577.00).The same study also indicated that more than half of voluntary organizations agreed that, compared to five years ago, goverriment was putting more conditions on the use of its funding and providing more funding for projects and less for core operations (Frankel & Rogers, 2003).shields and Evans (1998) argue that, during the past two decades, the government's move to develop a more contractually-based relationship with the voluntary sector has profoundly altered the political economy of the third sector.Browne (1996) indicated that increased government use of POSC has threatened the self- determination of voluntary organizations.Even though the development and implementation of POSC abroad has been recognized in Canada, its impact on voluntary social services organizations has only been researched to a limited extent. 9-Romzek, 1999).The focus was on how the practice of POSC is consistent with models of contracting social services.Third, organizational theory, including organizational systems theory and resource dependency theory (Kettner, 2002; Kramer & Grossman, 7987), were used as frameworks to construct the conceptual model for understanding the dynamics of individual organizations and organizalional changes.Finally, the theory of organization life cycle was considered as a rival theory for the interpretation of the organizational changes of voluntary social services organizations.This variety of theories provided different dimensions and angles to promote the understanding of the research issues.In addition, this research was expected to contribute to building knowledge about voluntary organizations.It provided more detailed empirical evidence to clarify the application of these theories to different contexts and settings. Relevance to the extension of empirical knowledgeExisting empirical knowledge does not adequately provide information for the research issues in this study.Kramer (1994) has concluded that, even though POSC has been the subject of wide discussion, the extent, significance, and causes of organizational changes associated with POSC still remain unclear.He argued for the need for research "on the contract culture and its interorganizational life, that is how POSC actually operates and its consequences on the affected parties."(p.55).Since 1994, several studies (e.g., Alexander et al.,

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