Aminata Sillah, Ph.D. Towson University General Essay on Nonprofit Organizations The nature, magnitude, and type of problems that nonprofit organizations deal with sometimes transcend boundaries making it necessary for them to collaborate. These types of problems often referred to as wicked problems (natural disasters, poverty) means that a single organization will not put a dent in solving the problem. However, there are times, when the problems are not wicked, but because nonprofits see a shift in the preferences of their constituents, collaboration is needed to respond to the needs of the people they serve especially if they lack the capacity and resources to do so alone. With this in mind, several theories have been put forth on why nonprofit organizations will choose to collaborate. One theory that has often been associated with collaboration is resource dependency theory (RDT). This theory assumes that nonprofit organizations need resources to maintain and sustain themselves, and will therefore look to their environment to select partners to gain resources from. Their idea is that there is some of sharing going on. Another theory; Institutional theory posits that certain rules and norms that affects the behavior of an organization forces them to seek collaborations in order to overcome these institutional constraints. Implicit in this theory is the idea of principals and agents, where the government is the principal and the nonprofit the agent. The assumption is that both parties are self‐interested and seek to maximize their utility. There is also the problem of information asymmetry, in which one party has the upper hand, because they have more information on the actual cost of producing and delivering a service. The issue with principal agent theory is that it focused on the behaviors of the actors and not so much on the actual transaction. In order to fill this void, transaction cost theory was put forth so that the focus is on the cost of transaction, in this case collaboration. It assumes that when the cost of producing a service alone/in‐house is too high, an