Financial Reporting Lags in the Non-profit Sector: An Empirical Analysis

We examine financial reporting lags among a large sample of Belgian non-profit organizations (NPOs). Doing so, we add to the literature on financial reporting and accountability in the non-profit sector. Next to drivers of the financial reporting lag that have been identified in prior studies based on private firms (e.g., delaying the disclosure of bad news), we find that the way of funding the NPO (i.e., reliance upon donations and/or grants) and its specific area of activity are significantly related to the financial reporting lag. Our results also suggest that important changes in accounting regulation significantly delay the financial reporting process. Importantly, we note that 17.2 % of the sample organizations do not file their financial statements within the legal time span.     

Evaluating economic theories of NPOs: A survey, a case study and some new directions for socio-economics

The contribution economists have made to the multidisciplinary field of non-profit studies is remarkable when one considers that non-profit organizations (NPOs) have traditionally been regarded as “non-economic” institutions that lie outside the scope of economic analysis. However, despite its achievements there has been concern about the emergence of “theoretical inertia” in the economics of NPOs. This paper suggests some ways in which the revisionist approach reflected in economic theories of the supply-side of the voluntary sector could be augmented. In particular it focuses on the emotional basis for stakeholder commitments and the consequent dependence NPOs have on their organizational leadership to foster the development of shared hopes that can sustain these commitments in the face of disappointments. These ideas are discussed in relation to the provision by NPOs of supported employment services to the disabled.     

Volunteers for NPOs in Welfare Services in Iceland: A Diminishing Resource?

The question of declining membership of non-profit organizations (NPOs) has been central in academic discussion and research has indicated changes in the way people volunteer. Less emphasis has been on the functions of volunteers as a resource for NPOs and how changes such as increased reliance on professionals in their operations can influence the volume and type of volunteering. This paper examines the value of volunteers as a resource for Icelandic NPOs in the field of welfare services. It is based on a study of the majority of active Icelandic NPOs in the welfare field, as well as an analysis of their respective websites. The findings show that volunteer contributions do not constitute a significant part of the activities of most Icelandic NPOs in welfare services. Apart from membership of boards, volunteers seem to be used primarily as a means of supplementing other resources, such as temporary fundraising efforts. However, the level of volunteering varies according to the size and operational type of organization.     

Non-profit organizations bridging the communication divide in a complex South Africa

Purpose

South Africa's post-apartheid governments have made remarkable progress in consolidating the nation's peaceful transition to democracy, but many South Africans still view themselves and each other according to stigmatizing categories. As the country's remarkable and peaceful transition to democracy unfolds, millions, both urban and rural, are still confronted with having to survive unemployment, homelessness, lack of basic services, HIV/Aids, food insecurity and unacceptable levels of crime and violence. Confronted by the complexity of our development challenges, one of our biggest failures is a lack of communication, trust, common purpose, collaborative leadership and sustainable relationships between the various sectors and stakeholders in development. Transforming South Africa's society to remove the legacy of marginalization will be a long-term process requiring the sustained commitment of the leaders and people of the nation's diverse groups. So the question remains: how can non-profit organizations (NPOs) establish themselves as development providers within the uncertain political arena, of which South Africa is characteristic, in order to represent all the masses who cannot speak for themselves and more than often find themselves in a marginalized and stigmatized position?

Principle results

Some Non-profit organizations recognize that their relationships with stakeholders is of great importance for their survival, various forms of communication take place without the necessary planning and without clear objectives for the development of these relationships. NPOs need a positive image and reputation due to financial implications where they do not have sufficient funds to support or market themselves effectively. In this climate of polarization NPOs play a pivotal role in providing a voice to the poor, mobilizing a motion of change and creating a platform for relationships, credibility and trust. Within the theoretical framework of relationship management theory, the interests of all stakeholders are balanced through the management of the stakeholder relationships.

Major conclusions

Non-profit organizations need to ensure that they protect their stakeholders (especially those who are in desperate need of the services rendered by these organizations), deliver better services and although not operating for the purpose of making a profit, manage themselves so that they do generate profit which will enable them to support themselves especially when funding is something that is becoming a rare phenomenon. Although NPOs find themselves in difficult financial times they need to renovate and almost reinvent themselves, in order to be fully capable to address many social problems in SA and to indicate to those who support them (especially financially) that they are to be trusted, committed to make a difference, that they deliver on their promises and to ensure open communication channels with all their stakeholders. NPOs need to manage their reputations which are built on their corporate identities because it is the organization's reputation that often creates a lifeline in uncertain times. If the NPOs succeed in managing their identities effectively, it may serve as the foundation for developing and maintaining relationships with their respective stakeholders which in turn could change the face of South Africa's society. These organizations might go about creating a platform for dialog in an attempt to build sustainable productive relationships that can go about uplifting and empowering those who would otherwise not have such an opportunity.     

Financial control in religious organizations: A status report

Several recent high profile cases of financial mismanagement in religious organizations have highlighted the need for all religious nonprofit organizations (NPOs) to have strong internal accounting controls. These organizations are often small, rely on a great deal of volunteer support, and as a result may not have the professional oversight to adequately monitor the resources of the organization or the behavior of its leaders. The purpose of this article is to assess the current state of financial control for one segment of religious NPOs, churches, and give some suggestions for improvement. In this study over 530 churches of widely varying sizes responded to an extensive survey about specific internal controls they may or may not have in place. The results are assessed in light of preferred practices. Readers can use this information to strengthen current practices and provide a greater level of assurance that an organization is directing its resources toward its mission.     

NPO Financial Statement Quality: An Empirical Analysis Based on Benford’s Law

In order to assess the accuracy of the figures reported in NPOs’ financial statements, I perform a digital analysis on Belgian non-profit organizations’ financial statements for accounting years 2007 up to 2012. Specifically, I compare observed frequencies for digits in the second-from-the-left position with expected frequencies based on Benford’s Law. Results based on the full sample indicate that observed frequencies strongly conform to Benford’s Law (and thus suggest a high degree of accuracy of the figures reported in NPOs’ financial statements). Nevertheless, I note statistically significant deviations from Benford’s Law (both for the entire distribution and at the individual digit level). The largest deviation is noted for zeroes in the second position (i.e., a significantly positive deviation), which can be explained based on humans’ reliance upon so-called cognitive reference points. Considering different sub-samples, I note that observed deviations from Benford’s Law are largest for the smallest non-profits and those non-profits that rely most heavily on grants and/or donations.     

Resource Dependence In Non-profit Organizations: Is It Harder To Fundraise If You Diversify Your Revenue Structure?

This article explores how fundraising efficiency is affected by changes in diversification of revenues in non-profit organizations. It uses random effect regression and Arellano–Bond models to study this phenomenon in a sample of 10358 US non-profits during the 1997–2007 period. We find a negative impact on fundraising efficiency when NPOs alter their locus of dependence and change their pattern of diversification. This effect is impacted by organizational size and industry. Previous studies have suggested that income heterogeneity is associated with organizational stability and financial strength. Using a change (versus level) model of funding diversity, our work shows that increased diversification leads to a higher operational inefficiency that could be penalized by potential donors.     

Resource Dependence Patterns and Organizational Behavior/Structure in Korean Nonprofit Organizations

This article examines the relationships among the three dimensions of resource dependence patterns (RDPs) and organizational formalization and goals in nonprofit organizations (NPOs). These three RDPs (that is, the appearance of the financial resource inflow) are resource dependency, resource diversity, and resource competitiveness. The empirical findings suggest that high dependency on government funding (high resource dependency) is positively associated with organizational formalization, although resource diversity does not have any explanatory power on organizational behavior and structure, and that a very competitive environment for resource acquisition significantly affects goal setting in NPOs. In particular, resource competitiveness well explains goal clarity and goal change in NPOs. NPOs with high resource competitiveness present clearer organizational goals or missions and are likely to experience frequent goal change.     

The legal framework and taxation of Scandinavian non-profit organisations

The Scandinavian countries are part of the same legal tradition. No Scandinavian country has any written statute on non-profit associations. Their association law is flexible, common-sensical and easy to comply with. To obtain subsidies, the associations may have to submit to regulations regarding organisational structures (open membership and one person, one vote). The law on foundations is more formalised, and the foundations are subject to considerably more control and scrutiny. Scandinavian NPOs are usually exempt from income tax, but do not to any great extent benefit from deductibility for donations. They are subject to payroll tax, and usually to value added tax. The Scandinavian taxation policies may make the NPOs economically dependent upon the government, and subject to regulation through ‘subsidy law’.     

A new culture of advocacy: An exploratory analysis of social activism on the web and social media

This study examined how non-profit organizations (NPOs) adapted to the new media environment and created an innovative culture of advocacy to directly facilitate engagement with interested supporters. Findings from this content analysis and virtual ethnography revealed NPOs dramatically transformed the structure of online content. Shifting the emphasis of the web and social media from a one-way transmission of information to an interactive conversation substantially changes the dynamics for activism, and fosters new models of engagement between NPOs and supporters. In this participatory, co-operative media culture, people were actively engaged and shared digital content that inspired others to care about important issues. These overall results indicated that the web and social media, when used to its fullest extent, played a key role encouraging communication and inspiring interaction among individuals on- and off-line.     

Living with suicidal feelings: Japanese non-profit organizations for suicide prevention amid the COVID-19 pandemic

The number of suicides in Japan increased for the first time in 11 years during the COVID-19 pandemic. This trend is particularly high among employed women and students. The Japanese government expanded its budget for providing telephone and social network service (SNS) counseling by prefectures and non-profit organizations (NPOs). On the basis of interviews with the chairman as well as counselors of an NPO in Osaka (Japan) that has provided telephone counseling services on suicide for over 40 years, this study examines suicide and suicide prevention amid the COVID-19 pandemic with a particular focus on how suicidal feelings are accepted. The results clarify that people do not wish to die just because of financial troubles or health problems; rather, they have lost the meaning in their life in the conflicts between social conditions and their personal life histories. Additionally, as volunteer counselors often experience the suicide of close relatives, their empathy for a caller may be based on their experiences of being overwhelmed by the realization of the otherness of others. They do not regard the acceptance of suicidal feelings as a “job,” but act as “friends.” Although modern society conceals death and suicide cases, the key to achieving a society where no one is driven into committing suicide is to place human life and human rights first as well as to talk about suicide and suicidal feelings without making the subject taboo or an aberration.     

The Contribution of NPOs to Family Policy Formulation in EU Member and Applicant States

This paper examines the role of nonprofit organizations (NPOs) in the process of family policy formulation in eight member states and three applicant states of the European Union. Drawing upon interviews with representatives from the nonprofit sector, the author argues that the experiences of NPOs in family policy-making vary considerably between countries because of the way state–nonprofit relations operate. Social origins theory illustrates why these variations exist by pointing to broad societal influences on the nonprofit sector, but new empirical evidence presented here suggests that, in a particular policy field, other factors, such as the significance of the field on policy agendas, the strength of one particular organization in a specific cultural context, party ideology, and financial viability of the NPO, shape the role of organizations in the formulation of policies     

Selecting a Computer-Based System to Assist Fund-Raising and Development Operations

Abstract

Increasingly, non-profit organizations and agencies must turn to the private sector to raise money to finance their work, and to increase the scope of their services. Computer software is available to assist and enhance organizational development efforts involving direct mail, “events,” and broadcast appeals. Social Work professionals may be responsible for selecting software systems for their agencies. What functions should such software perform? What criteria should it meet? The software should contain features that support each stage of a development cycle, manage mailing lists, provide financial and fund-accounting functions, produce letters and other communications, and generate statistics and reports for management control. Each of these functions is examined in some detail, as considerations to bear in mind when evaluating systems are discussed.     

Determinants of Charitable Donations to Large U.S. Higher Education,Hospital, and Scientific Research NPOs: New Evidence from Panel Data

We provide improved evidence on effects that fund-raising, government support, and program revenue of U.S. higher education, hospital, and scientific research nonprofit organizations (NPOs) have on donations to those NPOs and provide improved estimates of price elasticities of donations to, and donor demand for output of, those NPOs. Applying econometric tests, we find the best-specified model is two-way fixed effects, which controls for organization-specific and time-specific factors. Results suggest that U.S. higher education, hospital, and scientific research NPOs fund-raise to the point where the marginal fund-raising dollar brings in zero dollars of donations, donor demand for output of hospitals and scientific research NPOs is price inelastic and price elastic, respectively, and results are not sensitive to specification of price.     

Change and Tensions in Non-profit Organizations: Beyond the Isomorphism Trajectory

Research on the relationship between non-profit organizations (NPOs) and the public sector has been dominated by predictions of isomorphism where change and tensions in NPOs are attributed an imposing institutional setting. This article argues that research represents a selective perspective on organizational life due to its portrayal of organizational change as synonymous with an isomorphic, linear trajectory. The purpose of this article is to illustrate different sources and characteristics of change and tension. The article presents an analytical framework comprising of four components: evolving change, episodic change, inherent dilemmas, and conflicting logics, facilitating an understanding of the organization as movement. The analysis of a case study organization suggests that by identifying different dimensions of changes and tensions we can gain a richer understanding of the complexity of processes underpinning the organization as movement. The analysis reveals how multiple, parallel processes related to change and tensions generate reflections that drive integrity and identity formation at individual and organizational levels.     

Who Has the Power? The Role of NPOs in Local Authorities

Recent years have seen accelerated processes of decentralization and devolution of social services from central government toward local authorities and from them to non-profit organizations (NPOs). This article describes a case study of the process of transition of power from a local authority to a NPO and the outcomes of this transition on public policy making. The findings presented in the article are based on a qualitative analysis of documents over a period of 7 years (1999–2006) in a large local authority in Israel and its relations with a NPO which provide services for the elderly.     

Nonprofit Organizational Effectiveness: Contrasts Between Especially Effective and Less Effective Organizations

How do key stakeholders of nonprofit organizations (NPOs) judge the effectiveness of their organization? Are the judgments of stakeholders similar, and how are board effectiveness and the use of practitioner-identified correct management procedures related to judgments of effectiveness? This study focuses on a subset of especially effective and less effective NPOs from a larger sample and finds that the especially effective have more effective boards (as judged by various stakeholder groups), have boards with higher social prestige, use more practitioner-identified correct management procedures, and use more change management strategies. Practical implications discussed include adopting more correct management procedures and change management strategies.     

Promoting Civil Society in Contemporary Poland: Gendered Results of Institutional Changes

This paper is a contribution to the ongoing discussion concerning factors determining the development of civil society in a post-state socialist context. It examines the financial mechanisms designed to promote civic engagement in Poland, including EU grants and the so-called ‘percentage law’ that allows citizens to support NGOs of their choice with 1 % of their taxes. A detailed analysis of these mechanisms demonstrates that they are advantageous for some types of non-governmental organizations and not for others. Instead of enhancing the situation of the whole sector, they tend to support NGOs that already have substantial resources and hold a strong position vis-à-vis the state. Moreover, organizations and groups fighting for issues considered to be controversial—such as women’s NGOs advocating for the right to abortion or criticizing authorities for their lack of concern when it comes to violence against women—have limited chances to gain financial support from both the state and those sources that are independent from the state. This shows how seemingly gender-neutral institutional arrangements may bring gendered results. The following analysis is based on available statistics (several reports provided by the Klon-Jawor Association, Social Diagnosis Reports from 2007 and 2011) and qualitative data (semi-structured interviews and discourse analysis of the Polish media).     

Role of Canadian user-led disability organizations in the non-profit sector

User-led disability organizations have emerged as an important force in the non-profit sector. While much is known about the traditional disability organizations that began to proliferate in the 1950s (e.g. National Institute for the Blind), relatively less is known about the user-led organizations that emerged in the 1970s. Using a collective case study approach, phase 1 was a policy review and key informant interviews with members of user-led and traditional organizations and government. Phase 2 surveyed affiliates of user-led organizations. Phase 3 integrated the findings from phases 1 and 2. Major themes were that user-led organizations: reflected a new paradigm and gave voice to people with disabilities; had a unique role in systemic advocacy and shaping policy; that leadership is critical but in need of rejuvenation; had links with other organizations which provide a collective voice, solidarity and hope; had diverse strategies for local resource mobilization; had financial support from government which was both constrained and mobilized.     

The Third Way Reconfigured: How and Why Nonprofit Organizations are Shifting Their Human Resource Management

Nonprofit organizations (NPOs) are facing increasing demands to become more efficient and effective, especially given increasing financial cutbacks, the rising demand for services and the push toward performance-related management. Human resource management (HRM) is claimed to play an important role in coping with these challenges. Yet, within the field of nonprofit management, little is known about the configuration of HR architectures in NPOs, let alone their impact on performance. To bridge this gap, we conduct an exploratory multiple case study in ten health and social services NPOs. The case study data indicates a shift toward a dominant strategic orientation in the configuration of HRM. Our article makes a central contribution by uncovering a third way in which NPOs seek a specific configuration of HRM to confront the challenges they face in their internal and external environments.