Nonprofit association CEOs how their context shapes what,how, and why they learn

This qualitative study explored the learning experiences of twelve national nonprofit membership association CEOs using a phenomenological research design. While the professional context of an organization's chief executive is considered unique from other executive positions, the impact of this context on what and how CEOs learned was unclear. The findings describe association CEO learning as being affected in significant ways by the politically charged context in which the nonprofit association CEO operates with his or her board of directors. Power imbalances with staff and the board make learning through traditional organizational dialogue a less useful learning process for the CEOs. Furthermore, the feelings of isolation and vulnerability that are generated from the nonprofit association CEO context often cause CEOs to use private reflection and dialogue with their spouse as primary learning mechanisms. The study concludes that the association CEO context uniquely and profoundly shapes what, how, and why CEOs learn. Perhaps lacking the financial security of lucrative severance payments, which are often specified in employment contracts of for‐profit CEOs, the nonprofit association CEO will often temper his or her actions to avoid personal vulnerability with a politically charged board of directors.     

The Contextual Impact of Nonprofit Board Composition and Structure on Organizational Performance: Agency and Resource Dependence Perspectives

We study the relation between stability of the nonprofit organization’s environment and its board structure and the impact of this relation on organizational performance from the perspectives of both Agency Theory and Resource Dependence (Boundary Spanning) Theory. The impact of board characteristics on organizational performance is contextual. Specifically, we predict and show for a sample of U.S. nonprofits that board mechanisms related to monitoring are more likely to be effective for stable organizations, whereas board mechanisms related to boundary spanning are more effective for less stable organizations. We find that the two theories are complementary and address different aspects of nonprofit performance, but the results are statistically stronger and more often consistent with resource dependence than with agency theory. Overall, this study supports Miller-Millesen’s (Nonprofit and Voluntary Sector Quarterly, 32: 521–547 2003) contention that, because the nonprofit environment is often more complex and heterogeneous than the for-profit world, no one theory describes all tasks of nonprofit boards.     

Common Agency in Nonprofit Advocacy Organizations

Most theories of nonprofit organizations and nonprofit leadership recognize the multitude of stakeholders—including board members, donors and volunteers, funders, the media, and policy makers—that organizational leaders must contend with in doing their work. For nonprofits engaged in advocacy, demands from stakeholders may be even more challenging to meet. Although stakeholder theory recognizes the effect of various groups on an organization, it does not explain how leaders manage the preferences of their often‐competing stakeholders while they make choices for the organization. This study develops a common agency framework, evaluating the roles of three groups crucial to nonprofit advocacy organizations: the organization's board of directors, elected officials, and donors/members. The common agency framework is then illustrated with interviews with leaders of nonprofit advocacy organizations in California. Findings suggest that the leaders of these groups have a significant amount of discretion in guiding their organizations’ activities and operations.     

Organizational Change-Too Much,Too Soon?

ABSTRACT

Recent changes in government policies and practices, especially managed care, have led many nonprofit organizations to embrace collaboration as a competitive strategy. This article presents a case study of a large human service agency that has adopted a management service organization (MSO) model, a type of collaboration particularly suited to handling third-party contracts, at the urging of the founding CEO. A new governance model was also adopted. Using chronology as an analytical approach, the case examines key decisions made by professional and lay leaders during four distinct stages of organizational development. The actions taken by the board of directors to restore financial stability and protect the organization's reputation after learning from the CEO of the existence of a significant deficit demonstrate the need for strategic planning and better communication among all relevant parties involved in a collaboration.     

Scarce as hen's teeth: Women CEOs in large nonprofit organizations

This study examines an underlying mechanism behind the gender gap in nonprofit executive leadership, focusing on the link between the representation of women on governing boards and the hiring of female CEOs. The analysis of 340 human services organizations with gross receipts greater than $10 million in GuideStar's database reveals that organizations where women make up between one third and half of the board are more likely to have a female CEO compared to organizations where women account for less than one third or a majority of the board. The findings suggest that nonprofit organizations are more likely to hire a female CEO when women constitute a “substantial minority” of the governing board.     

How does a board of directors influence within‐ and cross‐sector nonprofit collaboration?

Board members play a significant, yet largely unexamined, role in nonprofit collaboration. Processes, such as finding prospective partners, creating common ground with a partner, and establishing appropriate collaborative governance implicate nonprofit board members. In contrast to the scholarship of the role of interlocking directorates as potential networks for nonprofit collaboration, this paper examines the role of board members' social and human capital on nonprofit collaboration with other nonprofits, businesses, and government agencies. Drawing on online survey data from 636 nonprofit organizations, this paper finds that board social capital—but not board human capital—is positively related to the presence and number of within‐sector and cross‐sector nonprofit collaboration. However, board human capital enhances nonprofit‐government collaboration, when board social capital is also high. The results provide a novel perspective in nonprofit collaboration and board management research.     

Best practices in board governance: Evidence from South Carolina

In June 2003, a large‐scale survey was conducted among South Carolina nonprofit agencies to gather information on a range of board governance issues. Some of the survey questions dealt with how each agency's board contributes to the organization. More than 80 percent of the responding agencies were registered as 501(c)(3), with the largest number of respondents in the human services category. Statistical analysis reveals where actual roles differ from “best practices” as prescribed in the literature. Discussion then focuses on how these trends in governance affect management and operations. In particular, we look at best practice regarding the separation of board and staff duties.     

The Relationship between Provision of Membership Benefits and Fulfillment of Representational Roles in Nonprofit Advocacy Membership Organizations

This article explores the ways nonprofit advocacy membership organizations can manage their resource dependence on members and fulfill the organizations' representational roles, focusing on the provision of membership benefits. Membership organizations rely on financial or other resources from members and thus are constrained by them. For a nonprofit that aims to primarily speak for members, constraints by members may help to focus organizational attention on members' interests. Contrarily, for a nonprofit that aims to mainly represent broader constituents, members' constraints may hamper an organization's ability to advocate for broader constituents because members do not necessarily share the same policy goals with broader constituents. The provision of membership benefits can be a useful strategy for organizations to fulfill their representational roles and to satisfy and engage members, because people often join an organization to enjoy certain membership benefits. For an empirical analysis, this study collected a large‐scale data set through web and mail surveys of nonprofit advocacy organizations across the United States. The mixed‐mode surveys achieved a 57.5 percent response rate (729 responses). The survey and regression analysis results show that member‐serving nonprofits providing members with opportunities to participate in advocacy work are more likely to represent members' interests directly. Although broader constituency‐serving nonprofits tend to prioritize members' opinions, these organizations are more likely to adhere to the mandates of broader constituents when providing selective material membership benefits. However, when providing purposive membership benefits, these nonprofits are more likely to represent members' opinions.     

The impact of funding sources and board representation on consumer control of service delivery in organizations serving low-income communities

This article examines the influence of funding sources and board members on the degree to which an organization enhances consumer control of the organization or limits access to services for some groups of clients. Based on a study of decision making in organizations serving three low-income communities, a limited degree of board influence on an organization's choice of service strategies can be traced to both the power of donors to demand service strategies that reflect their interests and the efforts of staff members to limit the ability of the board to engage in policy-making. The high degree of dependence of low-income communities on external funding restricts the development of boards as decision-making bodies that effectively reflect community interests.     

Strategies and tactics in NGO–government relations

Relationships between nongovernmental organizations (NGOs) and government agencies have been variously described in the nonprofit literature as cooperative, complementary, adversarial, confrontational, or even co‐optive. But how do NGO–government relationships emerge in practice, and is it possible for NGOs to manage multiple strategies of interaction at once? This article examines the experience of three leading NGOs in Mumbai, India, involved in slum and squatter housing. We investigate how they began relating with government agencies during their formative years and the factors that shaped their interactions. We find that NGOs with similar goals end up using very different strategies and tactics to advance their housing agendas. More significant, we observe that NGOs are likely to employ multiple strategies and tactics in their interactions with government. Finally, we find that an analysis of strategies and tactics can be a helpful vehicle for clarifying an organization's theory of change.     

Funder‐initiated integration

The active role of funders in organizational restructuring and consolidation is becoming a more common area of study, because more funders—private and government funders alike—are moving in the direction of encouraging funded agencies to explore new strategies such as mergers and integrations. This research focuses on funder‐initiated nonprofit integration and explores the challenges and strategies demonstrated by a government grantor and nine funded agencies as they planned and developed a management service organization. This was an action research study, whereby all parties participated as co‐researchers to examine the integration challenges and the partnership strategies used to move the integration process forward.     

Leadership succession and the emergence of an organizational identity threat

Leadership succession, and the associated changes that new leaders make, can have profound impacts on nonprofit organizations. Despite its importance, there is limited research that examines succession from the point of view of employees and considers how their interpretations of organizational identity and proposed change shape their responses to leadership transitions. In this article, we examine the dynamics that ensued when the founder of Friends of the Earth, a nonprofit environmental organization, stepped down. The case shows how the succession process can expose latent disagreement about an organization's identity and give rise to internal conflict. These patterns suggest that leaders must be attentive to different and often conflicting interpretations of an organization's identity.     

Fraud survival in nonprofit organizations: Empirical evidence

This study examines the survival of nonprofit organizations after the discovery of a fraud. Literature on nonprofit fraud claims that fraud has a destructive impact on nonprofit organizations. This study is the first to provide empirical evidence of the impact of fraud on a nonprofit organization's survival, and to analyze the significance of underlying organizational and fraud factors. An analysis of 115 nonprofit organizations experiencing a fraud shows that over one fourth of these organizations did not survive at least 3 years beyond the publication of the fraud, a rate considerably higher than the typical nonprofit failure rate. This article investigates the characteristics of surviving organizations and finds that older and larger organizations are more likely to survive, indicating the liabilities of newness and smallness hold in fraud survival situations. In cases where an executive‐level perpetrator committed the fraud, or where the organization victimized the public, the organization was less likely to survive. These findings suggest nonprofit organizations, particularly those that are new or small, could benefit by implementing governance policies and procedures that are consistent with those employed by more established organizations.     

Revisiting Agency and Stewardship Theories

Using principal–agent theories, this study examined differences in the perceptions of nonprofit chief executive officers (CEOs) and board chairs on key governance aspects, including board performance, leadership, satisfaction with diversity, and board meetings. Using data from the CEOs and board chairs of 474 nonprofit organizations, we found statistically significant differences in the governance perceptions of these leaders of nonprofit organizations. The findings provide support for an agency theory explanation about the differing interests of principals (board chairs) and agents (CEOs). The findings suggest that these two sets of nonprofit actors frequently operate from different perspectives, potentially affecting the governance of their organizations.     

Implementing an employee performance management system in a nonprofit organization

Nonprofit organizations are not exempt from the imperatives of employee attraction, retention, and motivation. As competition for staff, donors, and funding increases, the need to manage employee performance will continue to be a critical human resource management issue. This article outlines a study of the introduction of a performance management system in an Australian nonprofit organization and analyzes its design and implementation. It explores how performance management can be introduced and used effectively within a nonprofit environment to benefit staff and the organization. However, the use of performance management is not without its challenges, and the research also identified initial employee resistance and a resulting initial spike in labor turnover. However, findings indicate that if nonprofit organizations are willing to undertake consultation with staff and ensure that the organization's specific context, values, and mission are reflected in the performance management system, it can be a useful tool for managers and a direct benefit to employees.     

Mission,money, and merit: Strategic decision making by nonprofit managers

Public and nonprofit organizations need to make strategic choices about where to invest their resources. They also need to expose hidden managerial assumptions and lack of adequate knowledge that prevent the attainment of consensus in strategic decision making. The approach we developed and tested in the field used a dynamic, three‐dimensional model that tracks individual programs in an organization's portfolio on their contribution to mission, money, and merit. The first dimension measures whether the organization is doing the right things; the second, whether it is doing things right financially; and the third, whether it doing things right in terms of quality. Senior managers provide their own evaluations of the organization's programs. Both the consensus view and the variation in individual assessments contribute to an improved managerial understanding of the organization's current situation and to richer discussions in strategic decision making. In field tests, this visual model proved to be a useful and powerful tool for illuminating underlying assumptions and variations in knowledge among managers facing the complex, multidimensional tradeoffs needed in strategic decision making.     

Does Size Really Matter? Organizational Size and Innovations in Nonprofit Organizations

The purpose of this study was to investigate the relationship between size and innovation in a sample of nonprofit organizations. The author employed a number of size estimates (personnel and financial) and assessed different types of innovations (administrative and technological). Additionally, since the failure to take into consideration important contextual variables has been attributed to producing misleading conclusions about the relationship between size and innovation, the author controlled for those variables (formalization, centralization, specialization, leadership, board size, and organization's age) when assessing this relationship. The results of hierarchical multiple regressions showed that although the personnel size estimates were important predictors by themselves, their significance disappeared when contextual variables were introduced. Board size and organization age were significant predictors of administrative innovations. Board size was the only significant predictor of technological innovations, as well as of a total number of innovations.     

“Corporate” governance in nonprofit organizations

The economics‐based theoretical and related empirical literature on the governance of nonprofit organizations is brought together and integrated in a way easily accessible for noneconomists. This literature is scattered in academic journals covering economics, health economics, management, and accounting, and in the more nonprofit‐geared research publications. After defining corporate governance, I present in a nontechnical way the most appropriate economic framework for studying governance problems: the principal‐agent theory. Most of the economic literature deals with the role and influence of the board and its relation to the organization's management and performance. This is reflected in the article's structure. The board's functioning, composition, and committee structure are first discussed, followed by a review of the literature on incentive‐based remuneration schemes, disclosure of financial information, and the use of debt to mitigate agency problems between the board and management. The literature dealing with donors and subsidizing authorities in governance relations is then presented. The article concludes with a number of practical implications of the scholarly obtained results to date, as well as some suggestions for further theoretical and empirical research.     

Casa de Esperanza [Part B]

When nonprofit organizations make significant changes in mission, there are many issues of organizational structure and culture that must be re‐examined and re‐aligned. As the second segment in the case of Casa de Esperanza illustrates, there are many human issues that must be navigated by leaders making such changes. Case B illustrates the challenges that must be confronted as leaders embrace the agency's identity as a community‐based Latina organization, rather than a government‐funded domestic violence organization. The case describes the management planning and implementation processes, including changes in leadership, programming, and operations. Staff responses to these changes are also stressed, revealing the very human elements of organizational change. © 2004 Jodi Sandfort