The DIRECTIONS nonprofit resource assessment model: A tool for small nonprofit organizations

Rapid growth in the number of nonprofits has created a shortage of trained staff and experienced volunteer leadership for nonprofit organizations. The Nonprofit Education Initiative (NEI) in South Carolina developed the DIRECTIONS nonprofit resource assessment model to provide tools to help nonprofits better meet the challenges facing our communities—tools that will help nonprofits develop effective plans, integrate resources, diversify revenue, communicate effective messages, and motivate constituents. These tools are also inexpensive and available close to home. The research and development process was a cooperative effort between the Department of Parks, Recreation, and Tourism Management and Clemson University Cooperative Extension Service, with funding from the W. K. Kellogg Foundation. Cooperative Extension is a component of the land grant university system, the largest educational delivery system in the world. Cooperative Extension's role is to plan, execute, deliver, and evaluate learning programs consistent with locally identified needs. It helps people acquire the understanding, capabilities, attitudes, and skills essential to solving farm, home, and community problems. This article gives a background of the challenges facing nonprofit organizations in South Carolina, the steps taken to develop this new assessment model, and results of research conducted throughout the development process.     

Incentive-based management for nonprofit organizations

Nonprofit organizations should consider using incentive-based management programs so long as such programs are studied thoughtfully, implemented carefully, and closely tied to other important management practices. The article describes the experiences of one nonprofit organization, Citizens' Scholarship Foundation of America (CSFA), in successfully conducting a staff incentive program during the past several years. The author also reports briefly on the results of a recent survey among CSFA staff involved in the incentive plan, outlining the benefits of such a program in helping the organization to reach its objectives. Finally, the author addresses potential pitfalls to avoid in implementing an effective staff incentive program.     

Narrative review of strategies by organizations for building evaluation capacity

Program evaluation is an important source of information to assist organizations to make “evidence-informed” decisions about program planning and development. The objectives of this study were to identify evaluated strategies used by organizations and program developers to build the program evaluation capacity of their workforce, and to describe success factors and lessons learned. Common elements for successful evaluation capacity building (ECB) include: a tailored strategy based on needs assessment, an organizational commitment to evaluation and ECB, experiential learning, training with a practical element, and some form of ongoing technical support within the workplace. ECB is a relatively new field of endeavor, and, while existing studies in ECB are characterized by lower levels of evidence, they suggest the most successful approaches to ECB are likely to be multifaceted. To build the level of evidence in this field, more rigorous study designs need to be implemented in the future.     

Managers of nonprofit organizations are rewarded for performance

We consider the effect of performance on the compensation of nonprofit executives. Performance is measured as the ratio of revenue from a particular activity (such as fundraising or program services) to the expenditures associated with those services, exclusive of managerial compensation. This is consistent with previous works, which use measures of size, spending, or budget percentages as measures of performance. We also consider whether the compensation received by the executives enhances their performance. The empirical results support the hypothesis that compensation and performance are simultaneously determined.     

Accountability and nonprofit organizations: A historical perspective

American nonprofit organizations first developed in the nineteenth century as the organizational instruments through which Americans put their First Amendment freedoms of religion and political belief into practice. For one hundred years American nonprofits were held accountable by relatively small, compact communities of people who shared religious or other highly defined beliefs and values. In the twentieth century, many nonprofit organizations have grown very large and have adopted a scientific, general-service-to-the-community ethos. The legal, institutional, and cultural ideas and practices through which traditional nonprofits were, and are still, held accountable no longer seem to work equally well for the larger, more universal nonprofits of the late twentieth century.     

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.     

Accountability and nonprofit organizations: An ethical perspective

Given limited market regulation and no direct voter regulation, how nonprofit organizations can be made accountable is a serious and long-standing issue for the sector. The expectations and demands of various constituent groups associated with nonprofits are often conflicting and even contradictory. Nonprofits need to come to terms with legitimate expectations, base them on reasonable standards, and work through each of them in ways consistent with the others and with the respective missions of the organizations.     

Interorganizational network portfolios of nonprofit organizations: Implications for collaboration management

Increasingly, nonprofit organizations engage in interorganizational collaboration to address large‐scale social problems. Scholarship typically focuses on the characteristics of both within‐sector and cross‐sector partnerships of two collaborating organizations or all partnering organizations involved in a collaboration, but we know little about the patterns of interorganizational relationships that single nonprofit organizations maintain. This research draws upon surveys from 452 nonprofits and introduces nonprofit network portfolios, which we define as the number, integration, intensity, and duration of relationships that nonprofits purposefully develop with other organizations. Using 12 network measures, Ward cluster analysis revealed three distinct network portfolios: restricted within‐sector (n = 319, 70.58%), which included limited collaboration and prioritized within‐sector partnerships; robust within‐sector (n = 80, 17.70%), which included more nonprofit partnerships than restricted within‐sector portfolios; and cross‐sector (n = 53, 11.72%), which had a rich assemblage of integrative partnerships with nonprofits, businesses, and government agencies. Further, nonprofits that maintained each type of portfolio differed in their revenue and social mission, suggesting these factors are related to the types of collaboration that nonprofits maintain. This study makes contributions to existing research on interorganizational networks and cross‐sector collaboration and suggests practical and policy implications for nonprofit network management.     

Accountability and nonprofit organizations: An economic perspective

A popular concern is whether the managers of nonprofit enterprise are accountable. This article considers accountability in the context of three questions. First, how do groups establish a basis on which to hold managers acountable? Second, to whom should a manager be accountable? Third, can a person or group make it important to a manager to act in the best interests of the person or group? These three questions are addressed by the fields of public choice theory, social choice theory, and principal-agent theory, respectively. A cynical way of summarizing the seminal findings in these areas of research is that public choice theory proves that groups will be unable to form, social choice theory proves that once a group forms, it will be unable to make good decisions, and principal-agent theory proves that a decision, once reached, is impossible to implement. A more optimistic view is that the problems identified by these research findings contain the seeds of their own solution, and that thereby valuable lessons for nonprofit managers can be adduced.     

Welfare reform and the future of nonprofit organizations

This article discusses implications of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) for nonprofit social service organizations. We emphasize their role in the contemporary social safety net in relation to the public sector. Based on a study of ninety organizations operating in the Detroit metropolitan area, we adopted the supplementary, complementary, and adversarial framework from Young (1999) to assess the complex and evolving relationship between the nonprofit and public sectors in the post‐PRWORA era. The findings indicate a clear presence of all three perspectives; however, the continued shifting of responsibility for social services to private, nonprofit organizations suggests a growing dominance of the supplementary role. This raises concerns regarding future nonprofit capacity and other potential costs of nonprofit sector service provision.     

Merging nonprofit organizations: Analysis of a case study

This article presents a case study of merging among nonprofit organizations that provide social and community services. The study sheds light on the dynamics and problems of merging nonprofit organizations, whose espoused ideology focuses on promoting the well-being of their clients. The author describes and analyzes a merger in metropolitan Jerusalem, Israel, and highlights the potential problems that may ultimately undermine its success. This merger is the outcome of an ongoing power and political struggle. The analysis focuses on the organizational ideologies and culture as well as the strategies and structure of the merging organizations. In addition, the author deals with the underlying motives for merging, the driving and restraining forces, and the implications of merging nonprofit community services organizations with other social and human services organizations.     

Interorganizational relations of nonprofit organizations: An exploratory study

In their several roles as appropriators, redistributors, and providers, nonprofit organizations are involved in complex transactions with organizations in the nonprofit, for-profit, and public sectors. The purpose of this exploratory investigation, based on a sample of New York State nonprofits, is to explain variation in the extent of intrasector and intersector transactions. Various kinds of prevailing environmental complexities, coupled with the ways in which organizations are structured to deal with these complexities, help explain variation in the extent of organizational transactions. Another important predictor is directors' perceptions of main problems affecting the activities of their agencies. These findings are consistent with the conclusion that environmental uncertainties and perceptions about them affect the nature and extent of interorganizational contact.     

Coping by nonprofit organizations during the Reagan years

Contrary to expectations that a divested federal role would lead to the demise of nonprofit agencies, the relationship between nonprofit and government sectors in New York at the end of the 1980s was stronger than ever. This article presents longitudinal data for six nonprofit agencies in Rochester, New York, to demonstrate "management by groping along" during the Reagan years, behavior that resulted in increased reliance on state and local governments for funds and programs and in different ways of doing business.     

Innovation by nonprofit organizations: Policy and research issues

It is often claimed that a main reason public authorities and others use nonprofit organizations is that nonprofit organizations are innovative. But very little research has been conducted into innovative behavior by nonprofit organizations. How, then, does a funder formulate a policy with which to select innovative organizations? This article develops a classification matrix for types of innovations, sets out the elements of an innovation policy for a funder, and uses a review of the main theories of the spurs and inhibitions to innovation to consider how this ordering can be used in the construction of an innovation policy and as a framework for research.     

Why nonprofit organizations are ripe for total quality management

This article reviews the core philosophy of Total Quality Management (TQM) and argues that TQM can enhance the accountability of nonprofit organizations to their many constituencies. A case study of TQM in the United Way of Allegheny County illustrates applications and results.     

Determinants of fraud losses in nonprofit organizations

Although fraud research has increased, the nonprofit setting has been ignored in criminology and business ethics. This exploratory study examines occupational fraud in 128 nonprofit agencies. Characteristics of offenders (age, gender, educational background, position in the agency), victims (size of organization and available control mechanisms), and offenses are compared to previous research. Regression analyses indicate that several factors are significant predictors of financial loss. At the individual level, it appears females are responsible for increased dollar losses; however, subsequent analyses demonstrate that organizations with a higher level of internal controls detect fraud committed by males, and it is these offenses that result in more serious losses.     

Adoption of social media for public relations by nonprofit organizations

This survey of nonprofit public relations practitioners (N = 409) applied the Unified Theory of Acceptance and Use of Technology (UTAUT). Findings indicate that women consider social media to be beneficial, whereas men exhibit more confidence in actively utilizing social media. Organizations with specified public relations departments were more likely to adopt social media. Positive correlations between UTAUT factors and credibility indicated a greater likelihood to adopt social media.