Introduction

Public Ancillary Funds (PubAFs) are Australian philanthropic foundations that fundraise from the public and make grants to endorsed nonprofit organisations. They may be established by a range of different individuals or groups, including nonprofit or for-profit organisations. While legally independent, some PubAFs exist in exclusive and close “dyadic” partnerships with another organisation, relying on exchanges of information and value. This partnership dominates a PubAF’s operation and may involve shared values, strategy, culture, performance, engagement, staffing, or operating budgets. As such, the impact of dyadic partnerships raises unexplored issues around a PubAF’s identity, accountability, and independence.

Examples of individual dyadic partnerships include mentor–mentee, leader–follower, friendships, and co-workers (Liden et al. 2016). Dyadic organisational partnerships refer to organisational pairs which maintain a significant, often exclusive, long-term connection with each other, with common goals (Muthusamy and White 2005). For PubAFs in such dyadic partnerships, however, managing organisational identity, accountability, and independence can become demanding.

This research examines the benefits and challenges for PubAFs in dyadic partnerships, addressing the research question “how do dyadic partnerships impact on PubAFs’ identity, accountability and independence?”. In the context of this study, a dyadic partner organisation may be established and/or controlled by, receive sole funding from, make grants solely to, or be otherwise closely linked with a public philanthropic foundation. While there is limited research on PubAFs to date, the literature focusing on corporate foundations suggests dyadic partnerships are important, yet their implications are largely overlooked. Hence, understanding how public foundations in a dyadic partnership create and manage their identity, accountability, and independence complements and extends prior philanthropic research with a dyadic lens (Barman 2007; Chan 2010; Galaskiewicz and Burt 1991; Mendel and Brudney 2014, 2018).

In order to examine this issue, in-depth, semi-structured interviews were undertaken with managers and trustees of 28 PubAFs, both those operating within a dyadic partnership and those not. Findings captured nuanced perspectives on dyadic partnerships, revealing both positive and negative effects. Dyadic partnerships are noted in a wider range of PubAFs than suggested from previous literature, not only in corporate foundations and single organisation fundraising foundations. The benefits and costs associated with dyadic partnerships need to be managed through different stages. Multiple factors within a dyadic partnership can influence PubAFs’ identity (in terms of distinctiveness and visibility) and accountability (e.g. in relation to motivations, roles, and standards). Hence, it is important PubAFs focus on and actively seek to manage such relationships in order to achieve their intended outcomes.

The subsequent section explores the background and context for the study, reviewing the landscape of philanthropy in Australia, including PubAFs. The literature and theory on dyadic organisational partnerships are then reviewed. Findings from semi-structured interviews with PubAF managers and trustees are presented. The study’s findings are discussed in light of the literature, and the paper concludes by summarising the contributions made and proposing areas for further research.

Background and Research Context

“Each country is unique, subject to the path dependency generated by its national historical baggage, as well as by contemporary institutional transformations, and even by the personal dynamics of key policy entrepreneurs or champions” (Casey 2016, p. 2).

PubAFs are a growing and important component of Australia’s nonprofit sector, distributing $469 million in grants in 2016–2017 from an asset base of $2.6 billion (Australian Taxation Office 2019). As ancillary funds, PubAFs cannot themselves operate programs or projects, but are required to fundraise from the public (receiving gifts (donations) from a wide donor group) and make grants to approved nonprofit organisations for public benefit purposes.

PubAFs are regulated by guidelines legislated by the Australian Treasury as well as by the Australian Charities and Not-for-profits Commission (ACNC) (Ward 2016) but are subject to limited public disclosure requirements (Williamson et al. 2018). PubAFs must operate for public benefit purposes, and the majority of the directors of their trustee organisation must be “responsible persons”, defined as holding a position of community responsibility (Ward, 2016). They are regulated by Treasury Guidelines which mandate a minimum 4% annual distribution, as well as by the ACNC (requiring submission of an annual return) and the ATO. However, these minimal accountability requirements and lack of publicly available data on PubAFs contribute to a limited understanding of this sector which is historically and culturally different from philanthropy in countries such as the USA and the UK, where much extant research is focused (Casey 2016).

Commonly known PubAF categories include community foundations, corporate foundations, and fundraising foundations for individual charities, such as hospitals or schools. However, a recent study by authors (2020 in press) presents a more refined taxonomy involving seven categories of PubAFs (plus one “other/unknown” for which no information was available). These categories are single organisation fundraising foundations, issue or identity-based foundations, independent public foundations, independent public foundations (religious), corporate foundations, community foundations, and wealth adviser foundations. A summary of these categories and associated descriptions, based on an analysis of publicly available databases and individual organisation Web sites (including details such as their name, purposes, and beneficiaries), is detailed in Table 1.

Table 1 Taxonomy of PubAFs by category and size
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The PubAF’s name often indicated its category, e.g. the [Name of region] Community Foundation, the [Name of religion] Welfare Foundation, or the [Name of school or hospital] Foundation. Their stated purposes often identified a particular issue or cause area, and their Web site often verified links to a beneficiary organisation or parent company. PubAFs are therefore a diverse and complex group with significant variation in their missions and operating models.

Similarly, with large and diverse stakeholder groups, PubAFs’ stakeholder relationships are likely to be variable and complex. Yet some PubAFs have close and near-exclusive partnership ties with a range of different organisation types including, for example, a school, hospital, or museum (single organisation fundraising foundation), for-profit company (corporate foundation, wealth adviser foundation), church or diocese (independent public foundation (religious)). As such, the relationship between a PubAF and its dyadic partner may involve funding (PubAFs receiving donations from or making grants to the partner organisation), influence (PubAFs having influence over a partner or being subject to the partner’s influence), or being otherwise closely linked in some form. The benefits of dyadic partnerships involving foundations typically include complementing organisational goals and cultures (e.g. for-profit and for-purpose), leveraging each partner’s skills and leadership, reducing insularity, increasing expertise and efficiency, and enhancing transparency for performance outcomes (Barry and Crant 2000). However, little is known about the influence of such dyadic partnerships on these public foundations’ identity, accountability, and independence. The following section explores what is known in the academic literature on dyadic partnerships, and identity and accountability in nonprofit organisations.

Literature and Theory

Characteristics and Complexities of Dyadic Partnerships

Within organisational dyads, actors’ interactions consist of transfers of information (i.e. knowledge communication) and value (i.e. money and reputation) in “…a ‘restricted exchange’ between two objects, within a particular relationship” (Chan 2010, p. 394). Thus, dyads are pairs engaged in exclusive or near-exclusive exchange relationships, and exclusiveness is a key element (McEvily et al. 2017). This degree of concentration in a single relationship is most commonly understood in the context of parent–child bonds, where elements of closeness, nurturing in the early life stages, financial support and mentoring are all present. Thus, dyads create and develop both instrumental links (transactions) and expressive links (social bonds). In a dyadic partnership, these bonds are often reinforced and strengthened through shared values and goals and through repeated, ongoing interactions over time.

The case study narratives of dyadic partnerships provided by nonprofit executives (Mendel and Brudney 2018) describe pairings of a nonprofit organisation and a partnering organisation, grouped as nonprofit–nonprofit, nonprofit–government, and nonprofit–business. Mendel and Brudney’s (2018) research found that each of these pairings had distinctive features. Characteristics emphasised in nonprofit–nonprofit partnerships were mutual authority and risks between partners, and reciprocity of contribution (financial and nonfinancial) by both. Important characteristics of nonprofit–government partnerships included clarity in the roles and expectations of each member, emphasis on performance accountability, and a formal contract for services. Nonprofit–business partnerships were distinguished by their emphasis on benefits (profits/surplus) for both, through enhanced market share and reduced costs.

Dyadic relationships can create and sustain safe partnerships that are a source of trust, legitimacy, and reliability (Lambright et al. 2010; McEvily et al. 2017). They bring strong incentives to behave cooperatively and not free ride or be hostile. Instead, respect and mutual obligation are key, with relational trust being vital to both. Organisations are more likely to achieve their own goals in a dyadic partnership than in a multi-organisational relationship, as there are fewer interests to be negotiated in two-way partnerships than in multiple cross-sector alliances (García-Canal et al. 2003; Roussin Isett and Provan 2005).

While a dyadic partnership dominates at least one aspect of a foundation’s operation, it sits within broader networks of relationships and can be understood as “a two-some embedded in a larger whole, be it clan, kin network, community, society, the world” (Chan 2010, p. 389). Thus, a dyadic pair in a close, near-exclusive partnership is surrounded by a more complex web of relationships (Carboni 2016; Rowley 1997). There are shared risks in a dyadic partnership, particularly to legitimacy and reputation due to being closely associated with another organisation (Brickson 2000). However, dyadic partnerships can also act as buffers, reducing vulnerability to idiosyncratic environmental shocks (Le Ber and Branzei 2010; Rivera et al. 2010).

Dyadic Partnerships, Identity, and Accountability

Identity can be understood as what is central, enduring, and distinctive about an organisation (Albert and Whetten 1985). Given the exclusiveness and significance of the dyadic partnership, organisational identity is bound with their partner’s identity (Brickson 2007). The dyad may or may not be in perpetuity, dependent on the time horizon, experience in such relationships (positive or negative), and whether greater independence develops as the partners grow in size. Strong organisational identities can limit a partner’s willingness to engage in increasingly intense partnerships (Le Ber and Branzei 2010), due in part to the accountability implications.

While a dyadic partner (dominant stakeholder) is the most important accountability relationship for a nonprofit organisation, this relationship goes beyond accountability to whom (dyadic partner) to include who is accountable, for what (governance, activities), how (forms and practices), why (values and purposes), by what standards (regulatory and benchmarking) and with what consequences (sanctions or legitimacy) (Mashaw 2006). Hence while accountability always involves a minimum of two actors, there are multiple dimensions of accountability.

Philanthropic Foundations in Dyadic Partnerships

Philanthropic foundations are simultaneously focused on two major groups: those who support them (volunteers, donors, funders, government grantors) and those they support (disadvantaged groups, communities, the general public). While for some PubAFs, these relationships are many and varied, (near) exclusive and significant ties with funding organisations and/or beneficiary organisations may represent dyadic partnerships.

The foundation’s identity and accountability are strongly affected by which organisation initiated the dyadic partnership. A foundation may be the “child” created, supported, and governed by a “parent” partner, or it may be the foundation that creates, supports, and ensures the sustainability of a “child” partner. How organisations perceive themselves in terms of dyadic roles to particularised others influences their organisational identity (Brickson 2007), as well as helping by building organisational capacity (accountability).

Ostrander (2007) found independence is linked with degree of autonomy in determining a grantmaking agenda. For a foundation in a close dyadic partnership, grantmaking may be constrained due to the dyadic partner relationship, cause, or geographic area. Examples include corporate foundations funding in their corporate partner’s geographic operating areas, or single organisation fundraising foundations that distribute to one beneficiary (e.g. school or hospital foundations).

The dyadic partnerships literature in philanthropy focuses on for-profit corporations and linked corporate foundations (Galaskiewicz and Burt 1991; Herlin and Pedersen 2013; Rey-Garcia et al. 2012). Such dyadic partnerships typically have a founder’s interest and location in common and are concerned with the for-profit corporation’s legitimacy as part of a wider focus on corporate social responsibility.

Establishing a corporate foundation represents one possible approach to corporate social responsibility for for-profit firms. As separate entities, however, these foundations have their own missions and public benefit values, potentially associated with but legally separate from the corporate founder’s values. Thus, there are tensions between a corporate’s influence on a PubAF and the intended independence of PubAFs under law. This is particularly so where the company and the corporate foundation are in a dyadic partnership.

Rey-Garcia et al. (2012) note the particular relevance of governance for corporate foundations “founded, funded or controlled by profit-maximising firms” (Rey-Garcia et al. 2012, p. 79). While the foundation board determines the purposes and beneficiaries of grants, endowing or providing ongoing funding to a foundation is generally decided by a firm’s manager rather than its owners/shareholders.

A foundation may act to moderate and/or enhance relationships with other organisations or associations that have links to their corporate dyadic partner. Firms operating in socially contested fields (e.g. mining or banking) may establish and/or work with a foundation in a dyadic partnership to enhance their legitimacy and social licence to operate. Further, a corporate foundation may play a bridging role between firms and communities, representing a mutually acceptable “middle ground”. This occurs particularly where the foundation’s board includes a person(s) who is linked with and respected by the community more broadly.

Thus, corporate foundations may be considered as intermediaries, defined by Gandara et al. (2017, p. 702) as “boundary-spanning groups that provide a translating function between principals with different values and perspectives”. Herlin and Pedersen (2013) focus their attention on this bridging role played by corporate foundations between firms and nonprofit beneficiary organisations. They consider foundations as facilitating collaborations and resource transfers between two previously disconnected organisations, particularly where a power differential exists. If a firm’s reputation is under challenge, foundations can act as a (more) neutral and acceptable boundary or intermediary organisation (Herlin and Pedersen 2013).

In an international study of corporate foundations in the mining industry, McElroy (2012) finds “…the degree of distance, or governance independence, between the firm and the foundation varies widely and depends on the purpose of the foundation, the local context, and the overall corporate strategy” (McElroy 2012, p. 249). The corporate foundation’s legitimacy and perceived independence are linked to whether it has separate interests and competencies from the firm. These in turn allow the foundation to establish separate partnerships with organisations and individuals unconnected with the firm and thus differentiate itself from the firm’s “for-profit” purposes.

Changes Over Time in Dyadic Partnerships

Dyadic partnerships develop over time through a series of interactions, varying with the size and life-cycle stage of each organisation. Such partnerships can thus help to move decision-making perspectives in both organisations from short term to longer term as mutual knowledge is generated through an interactive process between the partners. Le Ber and Branzei (2010) found dyadic relationships between nonprofit and for-profit partners navigate three factors: attachment, complacency, and disillusionment. These factors are not (necessarily) sequential, but instead represent a continuum or cycle of stages, as characterised in Table 2, and broadly reflect the potential benefits and challenges of dyadic relationships, aspects of which have been identified in various studies including McEvily et al. (2017), Rivera et al. (2010), and O’Brien and Evans (2017).

Table 2 Three factors in dyadic partnerships between for-profit and nonprofit organisations
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As highlighted in Table 2, dyadic partnerships have identifiable phases which describe and characterise different processes and forms in the relationship. Similar phases or factors are also noted by Empson et al. (2013) at the individual level, describing the creation, maintenance, and disruption of partnerships between individuals in the context of a for-profit firm and its clients. While Le Ber and Branzei’s factors have been used in developing a conceptual framework (Al-Tabbaa et al. 2014) or to examine for-profit/nonprofit relationships (Seitanidi et al. 2010; Watson et al. 2018), the framework has not previously been applied in the context of philanthropic nonprofit organisations. This paper adopts Le Ber and Branzei’s three factors as a conceptual framework for analysis as it explicitly considers processes and changes over time, allowing for consideration of the evolving benefits and challenges for PubAFs resulting from being in a dyadic partnership.

Methods

This study’s qualitative research design aimed to obtain detailed, in-depth insights (Weick 2007) into PubAFs operating in dyadic partnerships. Given the diverse nature of this sector and limited research to date (McGregor-Lowndes and Williamson 2018), a taxonomy of PubAFs (authors, 2020 in press) was adopted to examine identity, accountability, and independence in PubAFs across a range of categories.

Primary data were sourced in the form of interviews with PubAF managers/trustees. This aspect of the study was exploratory in nature, examining potential similarities and differences within each category, but also considering similarities and differences across categories. Here, purposive sampling (involving selecting a similar number of cases from each category and a range of organisation sizes within each category) was considered most appropriate methodologically given the small sample size (28 from a population of 1450 PubAFs). As such, the sample allowed opportunities for theoretical rather than statistical generalisation.

PubAF managers and trustees were contacted via email and invited to participate in interviews. Involvement in the study was voluntary, and all participants remain anonymous. Participants came from five Australian states (Queensland, Victoria, South Australia, New South Wales, and Western Australia). The final sample is described in Table 3, detailing size and number of PubAFs in a dyadic relationship in each category, and providing examples of dyadic partners.

Table 3 Participating dyadic and independent PubAFs by category
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Twenty-eight semi-structured interviews were undertaken in-person and by telephone between late 2017 and early 2018, capturing nuanced perspectives from participants. The average duration was approximately 1 h (ranging from 45 to 95 min). Semi-structured interviews allow for emergent themes to be investigated (Qu and Dumay 2011). Interview questions included “When you are making decisions around grantmaking or investment, whose interests do you consider? To whom do you feel responsible, or explain a decision? Who do you look to for feedback? (individuals, groups, or organisations). Are all of those interests equal, or are some more important than others? In what ways are they differentiated?” Such questions initially focused on identity and stakeholders influencing a PubAF’s work. For PubAFs that identified as being in a dyadic partnership (the partner being one of their main stakeholders), further questioning focused on the benefits and challenges arising from that relationship, including how it impacted on their accountability and independence.

A PubAF was determined to be in a dyadic partnership when the manager or trustee spoke repeatedly about one partner organisation, describing it as being the most significant and enduring relationship to the PubAF’s operations. The definition thus focused on observed or reported elements or the substance (operating model) of the relationship as being a dyadic partnership, rather than the form (legal structure). While the nature and extent of dyadic partnerships varied (often based on the life-cycle stage of the partner organisation), in this study PubAFs were categorised in a binary manner, i.e. they were assessed as either being in a dyadic partnership or not.

Interview audio recordings were transcribed using Trint, an online artificial intelligence voice-to-text service. Careful accuracy checking was done by the primary researcher, which additionally increased familiarity with the transcripts before coding commenced. Thematic coding was undertaken using NVivo. The data were coded in an iterative process to theory-driven codes as well as to open or thematic codes, categorising phenomena by theme and searching for patterns (Fereday and Muir-Cochrane 2006).

Given the very limited prior research on PubAFs, it is difficult to know how prevalent dyadic relationships are in this context or the trajectory of these relationships. However, this initial study of 28 PubAFs shows such relationships were evident in approximately 2/3 of the sample. Thus, we consider this is an important aspect within the PubAF sector to examine, particularly given the PubAF structure is intended to be (and is legally) independent. Findings indicate these relationships have arisen due to various historical circumstances (primarily transactional in nature) or by choice (as PubAFs form and develop partnerships) and include various partner organisation types and connections, examples of which are detailed in Table 3. Dyadic partnerships and their impact were strong themes in many interviews, the findings on which are reported next.

Findings

The findings reported below are based on all 28 interviews, not only those with PubAFs in dyadic partnerships. However, the number of PubAFs classified as being in a dyadic partnership dominated the sample (19 of 28 PubAFs, 68%), and at least one PubAF in each taxonomic category was in a dyadic partnership (as detailed in Table 3). Dyadic partnerships featured strongly in the categories of single organisation fundraising foundations (5/6) and corporate foundations (3/3), as well as wealth adviser foundations (3/3). In other categories, the balance between PubAFs in dyadic partnerships versus independent is close to even.

Some tensions between PubAF taxonomic categories and classifications (as dyadic or independent) initially appear illogical or contradictory (e.g. “independent” public foundations in dyadic partnerships or single organisation fundraising foundations not in dyadic partnerships). These classifications however in part reflect the PubAF’s age and development stage and its dyadic partner’s operating model (e.g. beneficiary organisations such as healthcare networks that are one organisation legally yet operate multiple services in multiple locations). These apparent contradictions highlight differences between the substance or nature of a partnership and its legal form. Analysis also highlights that the dimension of dyadic partnership through to independence is in practice a continuum or spectrum with multiple facets, rather than a binary choice (as presented in Table 3).

Dyadic partnerships affected various aspects of PubAFs’ operations in terms of funding (either giving to or receiving funds from the dyadic partner), shared boards and governance, shared resources (physical spaces and operating expenses), closeness between the two parties, independence and choice (ability to leave or not be part of a dyadic partnership), shared reputation and branding, and overlapping identity. The implications of a dyadic partnership for PubAFs included increased inputs, resources, and public presence/scale, but also where closeness limited choice, reputation, and the distinctiveness of the PubAF as a separate entity. These perspectives are summarised in Table 4 and considered in greater detail in terms of positive factors (e.g. attachment), neutral factors (e.g. complacency), and negative factors (e.g. disillusionment).

Table 4 Perspectives on PubAFs as dyadic organisations
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Positive Factors (Attachment)

Le Ber and Branzei’s (2010) attachment factor was understood more broadly as positive considerations associated with a dyadic partnership, and multiple benefits were recognised for both partner organisations. Practical financial benefits existed for PubAFs in dyadic partnerships, with several respondents discussing a secure funding source from the dyadic partner. Networks of a dyadic partner also brought benefits. For example, one corporate PubAF receiving multi-year funding from its dyadic partner was also successful in securing many small donations from the partner’s large client base.

Shared governance involved one or several board members or trustees being appointed to both organisations in a dyadic partnership. For some foundations, this represented a risk mitigation measure “in the hands of the wrong people, [it] could place the foundation and its funds in a vulnerable position if it was independently managed and run by people who were not part of the Board of Governors [of the partner organisation]” (PubAF20, single organisation fundraising foundation). Another respondent saw joint governance as rational and expedient, describing it as “…a logical progression. We didn’t have to recruit externally. We had people who were very experienced who were able to take on those roles” (PubAF10, wealth adviser foundation).

Other practical benefits included sharing office spaces, staff, and having PubAFs’ operating expenses absorbed by the larger organisation. “…they actually provided the office space and hosted IT and kind of all the administrative support for the foundation” (PubAF16, community foundation).

The overlap extended to the organisations’ identity, regarding both internal and external awareness and perceptions. “…there’s a lot of respect within the organisation for the foundation and quite a lot of pride. Even though it’s not [name of company’s] foundation, we take it very seriously” (PubAF21, wealth adviser foundation).

Ensuring the two dyadic partners were distinguishable by the public was an ongoing issue but one that could be creatively turned into a benefit. “…we laugh because when we talk to some of our partners, if they say [name of dyadic partner instead of foundation] we fine them…not for any real value, but sort of say ‘well, that’s a donation to the foundation’” (PubAF5, corporate foundation).

Neutral Factors (Complacency)

Le Ber and Branzei’s (2010) complacency factor is interpreted more broadly in this study as neutrality or acceptance. Close and/or exclusive dyadic partnerships were assessed both negatively and positively by respondents. “…we were kind of wrapped up in this relationship which was a benefit and a disadvantage at the same time” (PubAF16, community foundation). Achieving equilibrium between independence and closeness thus involved balance within a partnership.

Differing obligations for the two organisations were discussed, despite their closeness. “It’s a very, very close relationship…. [but] there are some separate things that we do, and have to do” (PubAF19, independent public foundation). This included acknowledgement of the two organisations’ different areas of expertise.

…[partner organisation] doesn’t like taking money itself…they would rather the foundation take it and steward it, because again, a lot of the people in [partner organisation], they’re not good at sales, they’re not good at after-sales, they’re not good at public relations necessarily (PubAF28, single organisation fundraising foundation).

For another PubAF in this study, a long-term dyadic partnership with a beneficiary organisation ended by mutual agreement around the time of interview, and the PubAF was working to identify new partnership opportunities.

Negative Factors (Disillusionment)

Le Ber and Branzei’s (2010) disillusionment factor was considered more broadly to include frustration and resentment. Some PubAFs in dyadic partnerships noted the adverse impact of a dominant partner on their funding. “…the identity was a little bit bound up with the founder [company] which sometimes was a negative because potential donors would say ‘why do you need more money? We can see that they’re giving you $500,000 a year’” (PubAF16, community foundation).

A dyadic partnership could be tested by changes in key personnel and/or by the growth of one organisation. “…they had a change of CEO who had not such a magnanimous view towards the foundation…and particularly because [the partner organisation] themselves have grown and are now larger…they kind of wanted the [PubAF] to justify [its] benefit to them” (PubAF16, community foundation).

Disappointment was also expressed around the limited public visibility of some PubAFs in dyadic partnerships due to closeness constraining independence and choice. “[the partner’s] branding department was very reluctant for us to go and have separate websites…so that’s become a point of frustration for me because our content is therefore buried deep, deep, deep on [the partner’s] website” (PubAF5, corporate foundation).

Although legally independent organisations, PubAFs also faced significant challenges and barriers when choosing to separate themselves from a previous dyadic partnership that had become too close. “…we were terribly ensconced with [the partner organisation], in fact we were strangled” (PubAF28, single organisation fundraising foundation). Several PubAFs were noted as either rejecting prospective dyadic partners or separating from existing partners due to issues around control. One spoke of declining to become associated with a nonprofit organisation with national and international reach, because the PubAF would “just become a satellite office” (PubAF13, independent public foundation). The benefit of shifting towards a separate identity as greater independence was established was outlined. “…it now has a new brand, a new logo, a new name, it has a new constitution. It really is pushing to… be recognised as a standalone organisation” (PubAF28, single organisation fundraising foundation).

Negative consequences of dyadic partnerships also extended to higher standards of accountability and the concomitant costs of increased accountability demands in terms of time and resources, attributable to closeness, shared reputation, and overlapping identity. “…there’s too much third-party integrity risk to the brand that’s noted in the foundation’s name, right? I couldn’t do some of these things unless it was completely up to standard…there’s no choice of just doing bare minimum” (PubAF5, corporate foundation). One PubAF described the process of separating being motivated by a need for increased transparency. “…for transparency and independence, it spun out of that and relocated” (PubAF25, independent public foundation).

Differences Between Dyadic and Independent PubAFs

Differences were noted between dyadic and independent PubAFs in how accountability was understood and practiced. PubAFs within and without dyadic partnerships placed similar emphasis on accountability how (forms), to whom (stakeholders), for what (activities), and when (times). However, differences were observed in that PubAFs in dyadic partnerships discussed who is accountable (governance), why (motivations and values), and by what standards (benchmarking and regulation) (Mashaw, 2006) notably more than independent PubAFs. Being visibly accountable for outcomes achieved from donated funds motivated the establishment of one PubAF.

…quite a few of our offices…were supporting community groups and charities in their own way. But…we needed to focus more on seeing results and getting some accountability for some of those donations… what the donations actually achieve. And [the PubAF] provided us with an entity that we could control and streamline the fundraising efforts and the resources (PubAF14, corporate foundation).

The influence of values and standards of a dyadic partner organisation upon the PubAF was noted by one respondent in a quote that illustrates perspectives on independence and pragmatism.

…if you’re a [parent firm] entity, yes, you are required to follow that policy. We are not a [parent firm] entity, we’re a standalone PubAF. So our board could choose not to, but obviously, that doesn’t make sense. So from a governance point of view obviously we reflect the values and mission of [parent firm] in all our work (PubAF26, independent public foundation).

PubAFs in dyadic partnerships discussed aspects of accountability illustrated through notions of “which hat” was being worn at foundation board meetings (who is accountable) “…every time we have a board meeting…I need to remind some of them that they’re not wearing their hat as an executive of [parent firm], but they’re wearing their hat as a trustee of a foundation” (PubAF5, corporate foundation). Other aspects included wanting to focus more on accountability for donations and impact (accountability for what), adopting shared or consistent values and mission with the partner organisation (accountability standards), and ensuring that accountability processes were thorough in order to avoid negative implications for the partner organisation (consequences).

Discussion

The presence of a dyadic partnership between a foundation and a partner organisation was an important variable in the PubAFs examined. Implications for PubAFs in a dyadic partnership varied, ranging from enhanced access to funding, to resentment and miscommunication between dyadic partners when a PubAF’s role and work were poorly understood, particularly in large partner organisations. Different themes and conceptual dimensions of dyadic partnerships are discussed below, in terms of their influence on PubAFs’ identity, accountability, and independence.

For PubAFs, the presence of an exclusive connection with another organisation is a mixed blessing and can be beneficial and/or harmful. They bring multiple benefits, some practical (e.g. office space, IT support), some financial, and others more intangible, around the exchange of knowledge and expertise. However, dyadic partnerships also create issues regarding overlapping—identities, brands or public images, reputation and legitimacy. For independent and autonomous PubAFs without such a close and binding partnership, accountability was less constrained, and they could respond flexibly to changes in trustees’ and donors’ interests.

Le Ber and Branzei’s (2010) conceptualisation of dyadic partnerships as characterised by three factors (attachment, complacency and disillusionment) is a helpful lens for examining this study’s findings. When analysed in terms of positive, neutral, and negative implications, multiple effects arising from dyadic partnerships were revealed, with varying implications. While as noted in the findings, funding is the most visible and discussed link between dyadic partners, it was associated with both benefits and challenges (e.g. the benefit of a secure funding source presenting challenges by “crowding-out” other donors). Concerns regarding PubAFs’ independence may arise where fundraising focuses on individuals and groups associated with the partner (e.g. staff and clients of companies or ex-patients or alumni of hospitals or schools), given PubAFs are required to raise funds from the public under the PubAF Guidelines (Ward 2016).

Key personnel at governance and management levels in both organisations are critical to dyadic partnerships’ achievements and sustainability, and relationships between them may include informal and interpersonal social connections (Gazley 2010). However, most PubAFs are very small and are run largely by trustees and volunteers with few or no paid staff (Cortis et al. 2018). Changes in key personnel of a PubAF’s dyadic partner may place the partnership under greater tension as noted in the findings. Likewise, a new PubAF trustee wishing to introduce new ideas and take the organisation in different directions may cause frustration and disillusionment in the partner organisation, where shared and long-term values and understandings are perceived to be threatened.

Shared or overlapping governance with a partner organisation means trustees (board members) must assume different responsibilities based on each organisation’s mission and purpose. This is emphasised when the dyadic partner is a for-profit firm, and the divide between the two organisations occurs at a conceptual level about why they exist (Watson et al. 2018). As PubAFs change and potentially grow over time, these areas become possible sources of friction and frustration (Leat et al. 2018), impacting on a PubAF’s independence.

Of note from the findings is that most aspects or implications of dyadic partnerships presented benefits and/or challenges for PubAFs, with fewer reports of complacency or neutrality. Further, these implications changed over time, suggesting Le Ber and Branzei’s (2010) three factors are not unidirectional or sequential, but address relational processes within dyadic partnerships, allowing for movement over time. Such processes are considered in Fig. 1, representing the benefits and challenges for PubAFs of managing their operations within a dyadic partnership.

Fig. 1
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Model of movement between beneficial and harmful influences of dyadic partnerships and independence

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Specifically, Fig. 1 recognises that both dyadic partnerships and independence may be beneficial or harmful, resulting in positive or negative implications at different times. The proposed model allows nonprofits in dyadic partnerships to better conceptualise the state and effects of those partnerships, making strategic decisions clearer. Thus, it is important for PubAFs to be aware of and carefully manage their position to ensure positive outcomes.

Several PubAFs experiencing challenges from dyadic partnerships were able to manage these by changing the effect of the dyadic partnership from negative to positive (Q4 to Q1 in Fig. 1) or by moving out of the dyadic partnership towards independence (Q4 to Q2 in Fig. 1) (O’Brien and Evans 2017). Examples included changing identities and mission through a move out of a restrictive dyadic partnership to the benefits of independence, resulting in increased visibility to donors and beneficiary groups. From a legal perspective, all PubAFs are independent and their trustees have the power to decide such moves. In practice, however, a PubAF may be subject to shared governance and perceived as a “pot of money” over which the partner organisation “should” have influence or control. Thus, operating in the context of a dyadic partnership means that at times choice is constrained or compromised, and independence is thus impacted.

For certain PubAFs, leaving a dyadic relationship (movement from Q4 to Q2 in Fig. 1) is not always an option (e.g. corporate foundations which continue to be influenced by their founder; single organisation fundraising foundations established and governed by an organisation such as a school, hospital, or museum). Thus, it is important to consider:

  1. 1.

    Where such ties exist (dyadic partnerships) and the impact on PubAFs’ identity and accountability

  2. 2.

    The changing implications (positive and/or negative) of that partnership for the PubAF

  3. 3.

    Broader implications for such foundations’ independence, based on the legal intention of the PubAF structure.

Corporate foundations in a dyadic partnership offer a practical solution to the difficulty of adding social values onto an existing for-profit firm through their “convening, translation, collaboration, and mediation” (Herlin and Pedersen 2013, p. 58) actions between companies and nonprofit organisations. Thus, the establishment of a corporate foundation provides a vehicle for philanthropic activity, associated with but separate from the corporation’s for-profit focus. By establishing a PubAF, legally separate from the firm yet bound in a dyadic partnership, some of the conflicts of “grafting a moral value system onto a mature economic value system” (Albert et al. 1998, p. 288) may be avoided. However, the concern regarding a PubAFs’ independence remains where a dyadic partner dominates a PubAF’s operations. Distinctions between partner organisations types (i.e. nonprofit or for-profit) include nonprofit partners being perceived as better philosophically aligned with a PubAF’s public benefit purpose than for-profit organisations. This distinction was particularly problematic when a for-profit dyadic partner charged management fees for running the PubAF (e.g. some wealth adviser foundations), which was considered affronting by some donors.

Distinctiveness is an element of organisational identity and refers to what is unique about an organisation and sets it apart from its peers (Albert and Whetten 1985). As noted in the findings, a PubAF’s identity may be subsumed within a larger dyadic partner’s such that it is externally indistinguishable, possibly amplified by co-location and shared governance arrangements. Consistent with prior research (Rey-Garcia et al. 2012) where foundations’ information was available only through their parent firm or dyadic partner’s Web site, this study’s findings revealed several PubAFs in this situation, such that their distinctiveness was compromised.

In the foundation literature, dyadic partnerships are most commonly associated with donor organisations that establish and provide ongoing funding to foundations (e.g. corporate foundations). However, this study’s findings show that to be a limited understanding. Several PubAFs existed in a dyadic partnership with a beneficiary rather than a funder. For one PubAF, this began with the co-creation of a service delivery program where the two organisations, PubAF and beneficiary, worked closely together from the outset. Thus, dyadic partnerships with beneficiary organisations can develop organically to become dominant or significant for both partners, typically growing from one outstandingly successful program initially funded on a small scale by the PubAF and delivered by a single nonprofit organisation. In this sense, the creation of a dyadic partnership may be a success indicator, and joint program “ownership” can link partners in a dyadic partnership that goes beyond funding to include knowledge generation, mutual learning, and shared program branding.

Thus, key findings from this study include that dyadic partnerships are found in a wider range of PubAFs than might be supposed from previous literature, not only corporate foundations (the focus of most literature on this topic) or single organisation fundraising foundations. Further, the benefits, costs, and challenges associated with dyadic partnerships need to be recognised and managed through different stages to enable PubAFs to achieve their intended outcomes.

Conclusions

Dyadic partnerships are an overlooked facet of philanthropic foundations, which are largely held to be independent. The dyadic partnership is distinguished by its closeness, significance, and exclusiveness, going beyond collaboration to a concordance of goals and means (Furneaux and Ryan 2014). The findings highlight the importance and unique characteristics of dyadic partnerships in the context of PubAFs, offering new insights into potentially narrow and restricted ties to a single partner by organisations that are ‘public’ in a broader sense, being established for public benefit purposes with public representation and control (Ward, 2016).

The identity and accountability of these PubAFs are shaped and determined by their dyadic partners as their dominant stakeholders. Benefits of dyadic partnerships for PubAFs extend to funding, shared resources, and expertise. However, balancing autonomy and assistance, independence and closeness, i.e. whether a dyadic partnership binds through support or constraint, remains an ongoing challenge for PubAFs.

This paper builds from Le Ber and Branzei’s (2010) conceptual framework around phases of dyadic partnerships, but contributes a more highly specified analysis of the elements of those partnerships, with particular regard to foundation identity (Guo and Lai 2019), accountability (Fang et al. 2019), and independence. A dynamic model is proposed extending Le Ber and Branzei (2010), showing how foundations can move between the beneficial and harmful states of dyadic partnerships, and between dyadic partnerships and autonomy.

Understandings of philanthropic foundations as an organisational form, their activities and approaches remain emergent, and research is dominated by US discourses and context(s) (Guo and Lai 2019). This study demonstrates that the predominant US and European models “often used as a reference point, to be opposed, customised or assimilated by others” (Milner 2018, p. 4) are merely one piece of a much wider picture.

The lack of research on the extent to which dyadic relationships are relevant to and affect the PubAF sector means this study represents an important first step in exploring this issue. The significance and originality of this research lie in the investigation of these strong, long-term partnerships with public foundations’ key stakeholders. This more nuanced understanding of public foundations’ independence and influence gives rise to issues and questions to be addressed in future research. These include systematically examining the benefits and challenges for the partner organisations of working with PubAFs, some of which emerged from the findings (e.g. PubAFs acting as intermediaries, increased legitimacy, and staff and/or customer engagement). However, it is recognised that from partner organisations’ perspective, the relationship may not be a dyadic (significant or dominant) partnership, and this is also worthy of future exploration.

This study’s strength lies in the rich and detailed insights from “real-life” philanthropic practitioners in the context of PubAFs working in dyadic partnerships. These narrative accounts help to specify and explain what has previously been implicitly understood or overlooked about dyadic partnerships and their impact. In this rarely accessed population of foundations, it is important to develop an understanding of how they work within dyadic partnerships to effectively manage risk and responsibility to maximise public benefit.