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.     

Collaboration Between Nonprofit and Business Sectors: A Framework to Guide Strategy Development for Nonprofit Organizations

Collaboration between nonprofit and business sectors is widely regarded as a value creation process that benefits society, business, and nonprofit organizations (NPOs). This process, however, has rarely been considered from a nonprofit perspective. In this paper, we discuss a new framework to assist NPOs in developing strategic collaborations with businesses. We argue that, by being strategically proactive rather than reactive to what businesses might offer, NPOs can increase the scale of their cross-sector collaborations and thus enhance their sustainability. Implications for research and practice are discussed.     

Inclusion and commitment as key pathways between leadership and nonprofit performance

Given the projected growth of workforce diversity in the United States and the fact that heterogeneous workforces result in both positive (increased retention and performance) and negative (increased conflict and turnover) organizational outcomes, nonprofit leaders are faced with the challenge of effectively managing their workforces. Findings ways to ensure positive workplace outcomes, such as employee commitment (an emotional attachment to the organization) and performance, is especially critical for the overall functioning of nonprofit organizations. Using longitudinal multilevel path analyses, this study examined whether transformational leadership influenced work group performance through both creating a climate for inclusion and increasing employee affective commitment in a diverse nonprofit health care organization. Results indicate that transformational leaders help increase perceptions of inclusion, which improves employee commitment to the organization, and ultimately enhances perceived work group performance. This suggests inclusion and affective commitment as key factors for how leaders can increase nonprofit performance.     

Assessing Value Differences Between Leaders of Two Social Venture Types: Benefit Corporations and Nonprofit Organizations

This study considers key value differences between leaders of two types of social ventures: for-profit social benefit corporations and nonprofit organizations. The research question asks to what degree the value sets of leaders of benefit corporations are congruent with those of similarly situated individuals in nonprofit organizations. The results show the values of leaders working in benefit corporations and nonprofit organizations are in many ways aligned, but there are notable statistical differences. A sectoral association of values is also present with employees in both types of organization, especially when the previous work experience of employees is considered.     

Promoting social innovation amidst organizational complexity: Case study evidence from the German Red Cross

Social innovation is concerned with the creation and implementation of new solutions to social problems. Although research commonly frames social innovation as the domain of small, entrepreneurial organizations, an increasing number of large and well-established nonprofit organizations have started actively launching their own innovation initiatives. Using a case study of social innovation ventures within the German Red Cross (GRC), this study identifies organizational hurdles and viable management strategies targeting the promotion of social innovation within particularly complex organizations. Based on our results, we develop a conceptual framework highlighting that promoting social innovation in established organizations requires simultaneous attention to multiple dimensions of leadership and governance. Our study thereby offers a blueprint for management strategies that can guide nonprofit leaders in their quest to promote social innovation from within their organization.     

Volunteer Reliability in Nonprofit Organizations: A Theoretical Model

The reliability of volunteers is a major concern for many nonprofit organizations. To address this problem in more detail, we develop a theoretical model of volunteer reliability based on psychological contract theory. By taking this perspective as a starting point, we explore how individual volunteer characteristics, organizational factors, and sociological developments shape the exchange of inducements and contributions between volunteers and nonprofit organizations. We discuss how these factors can create tensions in the psychological contract and determine the extent to which volunteers behave reliably. As such, we develop a theoretical framework for addressing the reliability problem in volunteer management.     

Using Social Network Analysis to Enhance Nonprofit Organizational Research Capacity: A Case Study

As donor agencies become more specific in funding requirements, research that can demonstrate the collaborative efforts of a nonprofit agency with its organizational neighbors and how those efforts pay off in terms of capacity and provision of services is highly useful. Recognizing these benefits, a local funding agency in Virginia commissioned a study to look at the ways in which social network analysis (SNA) can enhance the data resources available to nonprofits for funding and grant requests. In this article, we present a case study of a network of 52 nonprofit organizations to illustrate the viability of SNA in terms of funding and research needs specific to nonprofit organizations. We discuss the outcomes of the case study in terms of how the visual and metric outputs of SNA can be used by nonprofits to enhance the accomplishment of their organizational missions and strengthen their grant requests.     

What does learning by listening bring to citizen engagement? Lessons from a government program

In public relations research, the concept of engagement is often theorized but seldom observed in practice. This research focuses on what public leaders learn when they undertake actions centered on learning by listening to society to implement governmental citizen engagement programs. Taking an inductive grounded approach to data analysis which draws on tools and methods of grounded theory as well as including a review of key concepts from public relations literature, a reflexive analysis of an action learning intervention involving the members of a provincial government was conducted. Results show that, when reflecting on interaction with stakeholders of the program, government members: increase their knowledge about both sides of the public organization-society relationship; become more sensitive to what listening is and implies, and, hence, more supportive of two-way communication; are challenged about the authenticity of the motivations behind their listening; become more aware of ways in which they work to build social capital; and, subsequently, increase their willingness to act together with society. This paper shows that reflection on the real implementation of engagement programs gives policy makers a better understanding of normative assumptions, and hence it instantiates public relations theories and concepts about engagement. By identifying acting-by-listening as integral to citizen engagement, it presents implications for the study and practice of public relations in public sector organizations.     

Doing Good,Public Good,and Public Value

In this article, using multiple illustrative case examples, we demonstrate that philanthropic institutions are in the business of creating public value. In framing the work of philanthropy more broadly to include the process of public value creation, philanthropic institutions and leaders are challenged to be more strategic not only in their mission‐fulfillment grant‐making with nonprofit organizations but also in the way they stimulate and encourage collaboration, create the “third space” necessary to incubate ideas to transform society, and leverage resources to increase the return on their investments toward system‐wide change. The implications for philanthropic actors and institutions suggest that the strategic contributions they make toward creation of public value are those that go beyond transactional performance measures, such as number of dollars spent or clients receiving services, to include ways that their investments are amplified by meaningful partnerships with nonprofit and other organizations, changed behaviors of institutions and individuals, and transformative public policies.     

Terms of engagement: Facebook and Twitter use among nonprofit human service organizations

This study uses Lovejoy and Saxton's (2012) hierarchy of engagement to analyze how nonprofit human service organizations use Facebook and Twitter to engage stakeholders. Their framework has not been applied to this nonprofit subgroup, and most previous scholarship on this topic focuses on just one platform. We also contribute by drawing on organizational theory to better understand variation in the modes of engagement organizations emphasize. Based on our analysis, we add new subcategories to the hierarchy of engagement. In addition, we find that compared to other nonprofit subgroups examined in previous research, the organizations in our sample placed a greater emphasis on using social media messages to ask stakeholders to take action. We report only modest variations in how organizations were using Facebook and Twitter. Finally, according to our results, resource dependence and stewardship theories help explain the modes of engagement organizations prioritize.     

The Logic of A Co‐Operative Economy and Democracy 2.0: Recovering the Possibilities for Autonomy,Creativity, Solidarity,and Common Purpose

Over the past 30 years, the collectivist‐democratic form of organization has presented a growing alternative to the bureaucratic form, and it has proliferated, here and around the world. This form is manifest, for example, within micro‐credit groups, workers’ co‐operatives, nongovernmental organizations, advocacy groups, self‐help groups, community and municipal initiatives, social movement organizations, and in many nonprofit groups in general. It is most visible in the civil society sector, but demands for deeper participation are also evident in communities and cities, and the search for more involving and less bureaucratic structures has spread into many for‐profit firms as well. Building on research on this form of organization, this article develops a model of the decisional processes utilized in such organizations and contrasts these “Democracy 2.0” standards for decision making from the Democracy 1.0 (representative and formal) standards that previously prevailed. Drawing on a new generation of research on these sorts of organizations, this article and this special section discuss: (a) how consensus decisional processes are being made more efficient; (b) how such organizations are now able to scale to fairly large size while still retaining their local and participatory basis; (c) how such organizations are cultivating a more diverse membership and using such diversity to build more democratic forms of governance; (d) how such organizations are combatting ethnoracial and gender inequalities that prevail in the surrounding society; and (e) how emotions are getting infused into the public conversations within these organizations and communities.     

A Coalition Perspective on Nonprofit Governance Quality: Analyzing Dimensions of Influence in an Exploratory Comparative Case Analysis

We answer the call that governance research should focus more on processes outside the boundaries of boards, especially for nonprofit organizations. In particular, we suggest and elaborate concrete steps with respect to the advantages of a leadership coalition perspective to focus more on the behavioral and informal aspects of governance. Through a comparative case analysis of five nonprofit organizations, we explore contingencies between characteristics of nonprofit leadership coalitions and governance quality. We identify two dimensions to classify leadership coalitions: centralized versus diffused influence and specific versus holistic influence. These dimensions are subsequently related with observed governance quality. We frame our finding in the existing literature on group faultlines, which are socially constructed dividing lines within groups, and we discuss the importance of establishing a balanced coalition between a weak or nonexisting and a strong dominant coalition to ensure high governance quality. We also present propositions on how governance quality and its various sub-dimensions can be studied as a complex, nonlinear intermediate concept between coalitional aspects of leadership groups and nonprofit organizational performance. Finally, we discuss concrete avenues for further testing and verification of our theoretical interpretation.     

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.     

An application of the nonprofit virtual accountability index: Accountability in sport for development and peace

In this research note, we examine web-based accountability practices of human service nonprofits. Data were collected directly from the organizational websites of an international sample of 532 organizations involved in operating sport for social change programs, more commonly known as the field of sport for development and peace. Websites were coded using the nonprofit virtual accountability index—a theoretically grounded and robust tool—to measure information and interactivity available for stakeholders across five dimensions of accountability. Analyses of variance and independent t-tests were used to test potential group differences based on geographical region, the thematic types of social change efforts, and the type of sport used to deliver programming. The results of this analysis highlight the critical importance of geographical location and other organizational variables for web-based accountability practices. Furthermore, the results allow nonprofit leaders to identify common areas in need of improvement for smaller and emerging nonprofits.     

Agency Problems between Managers and Employees in Nonprofit Organizations: A Discrete Choice Experiment

Most principal–agent literature of nonprofit organizations has focused on the relationship between board members and managers. However, in addition to the role as an agent of the board, the manager also performs a role as principal with respect to the nonprofit employees. By using a discrete choice experiment, we identify the objectives of managers and employees in nonprofit organizations and assess the presence of agency problems in this relationship. Our sample consists of 76 headmasters, 161 teachers, and 39 administrative employees in 74 secondary nonprofit schools in Belgium. We find that the six objectives set out in the experiment play an important role for both headmasters and subordinate staff. However, the results also indicate that some of these objectives are significantly more important for the headmasters. In sum, our results suggest that agency theory and stewardship theory are not necessarily in conflict with each other but can be combined into a more general governance framework for nonprofit organizations. Consequently, we argue that incentive structures that incorporate different types of objectives can facilitate the recruitment and retention of employees in nonprofit organizations.     

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.     

Organizational capacity and entrepreneurial behavior

In this research note, we examine the relationship between organizational capacity and entrepreneurial behavior in a global sample of 165 nonprofit organizations operating in a single, rapidly growing field of nonprofit activity. Our findings show a strong relationship between organizations' entrepreneurial behavior and levels of organizational capacity. We discuss our results relative to the importance of both organizational capacity and entrepreneurial behavior in a rapidly growing nonprofit subsector. The results contribute to the continued development and refinement of theoretical and empirical work on the causal links between organizational capacity and entrepreneurial behavior more generally.     

Stability and Change in Nonprofit Organizations: The Volunteer Contribution

This paper reports on a study of the microprocesses of stability and change in a nonprofit welfare organization in Australia. We position volunteering and voluntarism as core constitutive phenomena in and of nonprofit organizations and the nonprofit sector more generally, and examine volunteer agency in action. Developing a model drawn from neoinstitutional theory and adopting an ethnographic approach, the paper illustrates theoretically and empirically how volunteers create and revise institutional orders operative within organizations in ways hitherto poorly articulated and understood.     

The Role of the Nonprofit Sector in a Self-Governing Society: A View from the United States

This article explores the role of private, nonprofit organizations in a self-governing society. A framework identifying the diverse theories that explain the various types of nonprofit organizations observed in contemporary American society is sketched. This provides a fuller understanding of the varied and complex ways that nonprofit organizations contribute to the institutions of governance.     

Priming from the pulpit: Extending regulatory focus theory to church services

The purpose of this research note is to extend a powerful cognitive psychology theory—regulatory focus theory—to a specific nonprofit organization: churches. We apply this theory to the design of church services to model how church leaders can structure services to enhance congregant experience and generate positive behavioral outcomes. We present an experiment utilizing 126 adult Americans as initial evidence for our framework. The results indicate that using appropriate regulatory focus priming strategies can increase congregant donations.