Sustainability Assessment and Reporting for Nonprofit Organizations: Accountability “for the Public Good”

Nonprofit organizations serve the public good by offering services that benefit communities and the individuals who live in them. While many large for-profit companies and a few international nonprofits have begun voluntarily assessing and reporting their environmental, cultural, economic, and social sustainability performance in response to growing public awareness of sustainability issues, nonprofit organizations have generally been slow to adopt the practice. This paper makes the case that nonprofits have an obligation to assess and report sustainability performance to account for their positive and negative environmental, cultural, economic, and social impacts in the communities they serve precisely because of their promise to serve the public good; and that sustainability assessment and reporting are not only possible, but that they can actually offer several practical advantages for organizations that integrate the practice into their missions and models. Several sustainability reporting frameworks are reviewed. Two case examples are presented to illustrate the utility of sustainability assessments and reports for different types and sizes of nonprofit organizations. Challenges to the process of adoption and implementation of sustainability programs in the nonprofit sector are discussed.     

The Nonprofit Sector at a Crossroads: The Case of America

Despite some encouraging trends, America's nonprofit sector stands at a crossroads because of an interrelated series of challenges. Government budget cuts beginning in the early 1980s have eliminated a significant source of nonprofit revenues and created a serious fiscal squeeze for many organizations. Although the sector as a whole managed to replace this lost revenue, it has done so largely through fees and charges that have attracted for-profit businesses into traditional fields of nonprofit action, creating a serious economic challenge to the sector. Simultaneously, important questions have been raised about the effectiveness and accountability of nonprofit organizations, and about what some see as the overprofessionalization and bureaucratization of the sector. All of this has undermined public confidence in the sector and prompted questions about the basic legitimacy of the special tax and legal benefits it enjoys. To cope with these challenges, American nonprofits could usefully undergo a process of renewal that revives the sector's basic values, reconnects it to its citizen base, and creates a better public understanding of its functions and role.     

Nonprofit social services in Moscow: Leadership and administrative issues

This article presents the findings of a study of nonprofit human services organizations in Moscow, Russia, in the early stages of development of the nonprofit sector. It addresses the following issues of relevance to social welfare in particular and nonprofits in general. First, what is the legal status of nonprofits? Second, what leadership and governance mechanisms have evolved? Third, how are resources, both financial and human, obtained? And, finally, how can Western consultants be useful in addressing the unique and specific needs of nonprofits in Russia as they bring their expertise into this setting?     

The Nonprofit Sector and State Governments: Public Policy Issues Facing Nonprofits in North Carolina and Other States

The challenges facing nonprofits in North Carolina and most states include devolution and ripple effects at the state level from federal budget cutbacks, government efforts to tax or further regulate nonprofits, scandals involving a few organizations or their leaders, and efforts to limit nonprofits' right to lobby and advocate for their causes. But the future also holds a number of opportunities for nonprofits, including the increased clout of nonprofits acting together as a sector; partnership initiatives with nonprofits by North Carolina's governor and chief executives in other states, legislative measures to increase charitable giving and reduce red tape, state-level summits following up on the president's push for increased volunteerism, and a reservoir of public trust in nonprofits. North Carolina's experience may predict the future dangers and opportunities in other states.     

The liability of nonprofits to donors

The success of the third sector depends on public confidence, and that confidence rests, in part, on holding managers, directors, and officers of nonprofits responsible for their conduct. This accountability can be accomplished by clearly defining the roles of these individuals and the stands that they are to uphold, and by providing channels for all interested to challenge uncontrolled activities. Though interest in this goal is unanimous, a debate exists over how to ensure oversight and accountability.     

The double-edged sword of social service contracting: public accountability versus nonprofit autonomy

The increased role of government contracts in the funding of nonprofits has heightened tensions as governments seek accountability and nonprofits seek to preserve autonomy. Considering both sides of the contract market this article suggests that the threat of government funding is exaggerated. Nonprofits are attractive contractor options because of their experience and trustworthiness. Governments should recognize that excessive intrusions limit the advantages of the nonprofit sector. At the same time, nonprofits should be conscious of the implications of public funding, just as they must be of other sources of funding.     

Reforming Property Tax Exemption Policy in the Nonprofit Sector: Commercialism,Collective Goods,and the Donative Theory

This article develops, critiques, and tests the donative theory, which bases the tax treatment of nonprofits on their production of collective or public goods, through twelve variations for determining property-tax-exempt organizations in five nonprofit industry groups. Using a case study of Indianapolis nonprofits, the results reveal that a significant number of organizations in the nonprofit sector and most industry groups would experience the loss of their property tax exemption. The author calls for nonprofit managers and scholars to give greater future attention to property tax exemption policy in the nonprofit sector.     

Factors Attracting Individuals to Nonprofit Management over Public and Private Sector Management

Little research has sought to identify the distinct advantages that nonprofits offer employees, particularly managers. Drawing upon Weisbrod's theory of managerial sorting (1988), we test a series of hypotheses about the differences among nonprofit, public, and for‐profit organizations that may explain the preference of managers to work in one sector over the other. We use pooled cross‐sectional data from the General Social Survey to test managerial sorting. We find many similarities in the perceptions of managers in the nonprofit and public sectors as compared to the for‐profit sector. However, when we examine the sorting of managers into nonprofit versus public sector jobs, we find differences in work environment. Compared to those working in the public sector, managers in nonprofits report greater freedom in deciding how to carry out their job functions, more control over their work schedules, and greater opportunities for pay increases. We conclude with a discussion of the implications of these findings for the practice of nonprofit management.     

How the State Shaped the Nonprofit Sector: Public Funding in British Columbia

This article examines how the state has used its spending power to shape the nonprofit sector in British Columbia since the 1960s. The province's thriving nonprofit sector and its polarized political culture provide an ideal case study for exploring the relationship between the state and nongovernmental organizations. The following study documents changes in state policy, the trajectory of funding, funding patterns, and organizations that have received state funding. Although public funding for nonprofits in Canada has been pervasive for decades, there is little empirical evidence on the nature and scope of this funding. This article is based on an innovative new database that provides a comprehensive list of grants from the provincial government to nonprofit organizations between 1960 and 2014. Despite concerns regarding cuts to public funding in recent years, this study finds that there has been an overall increase in funding. However, there has also been a significant shift in funding from women's issues to Aboriginal peoples since the early 2000s.     

Making sense of accountability: Conceptual perspectives for northern and southern nonprofits

This article examines the concept of accountability from various disciplinary lenses in order to develop an integrated understanding of the term. Special attention is devoted to principal—agent perspectives from political science and economics. An integrated framework is developed, based on four central observations. (1) Accountability is relational in nature and is constructed through inter‐ and intraorganizational relationships. (2) Accountability is complicated by the dual role of nonprofits as both principals and agents in their relationships with other actors. (3) Characteristics of accountability necessarily vary with the type of nonprofit organization being examined. (4) Accountability operates through external as well as internal processes, such that an emphasis on external oversight and control misses other dimensions of accountability essential to nonprofit organizations. The analysis draws from the experiences of both Northern and Southern nonprofits, that is, organizations based in wealthy industrialized regions of the world (the global North) and those in economically poorer areas (the South).     

Accountability in organizational life: Problem or opportunity for nonprofits?

This article reviews the notion of accountability as an intrinsic experience in daily organizational life and contrasts it with the more traditional construct of accountability as an external control or monitoring device. The concept of “felt responsibility” can provide an opportunity to enhance the effectiveness of nonprofit organizations. Both research and the author's field experiences in nonprofit settings suggest how nonprofit leaders and managers can use felt responsibility to help individuals act with accountability to themselves and to others. The concept of “conversation for accountability” poses a pragmatic opportunity for nonprofits in particular to turn the current environment of finger pointing and aggressive monitoring into an enabling organizational practice that benefits both nonprofit members and their clients or constituencies.     

Explaining Trust in Canadian Charities: The Influence of Public Perceptions of Accountability,Transparency, Familiarity and Institutional Trust

Public trust of nonprofits can augment social benefits of the nonprofit sector by enhancing engagement of the general population in the sector. This study analyzed cross sectional data collected from a random sample of Canadians (n?=?3853) to test the effects of respondents’ perceptions of financial accountability, transparency, and familiarity of charitable nonprofits, along with the effects of trust in key institutions on their general trust in charitable nonprofits. Results show that each factor (except for trust in government institutions) has a significant effect on the level of trust respondents had in charitable nonprofits. The study helps advance our understanding of what contributes to trust in charitable nonprofits among Canadians and offers suggestions on how nonprofits can garner greater trust with the population.

     

Human capital inflow in nonprofits: Entry‐level employees’ sector shift

Although recruitment and retention of qualified employees are some of the biggest challenges in the nonprofit sector, nonprofit organizations must maintain human capital inflow due to its significant impacts on organizational success. Through person‐organization value fit, this paper explores the factors that influence labor shifts from the public or for‐profit sector into the nonprofit sector in the South Korean context. Specifically, the effects on the likelihood of employees switching to the nonprofit sector from the perspective of eight job satisfaction measures and three education–job match measures are investigated. Two groups of employees (those whose career started in the for‐profit sector and those starting in the public sector) are compared. Results indicate that there is substantial variation between the two groups. In particular, intrinsic job satisfaction has completely different effects on those working in the for‐profit sector than on those working in the public sector regarding their likelihood of having experienced an intersectoral shift into nonprofits. The more public employees are satisfied with intrinsic job rewards, especially job reputation, the more likely they are to move to nonprofits. These results suggest that when employees in the public sector are satisfied with intrinsic rewards they tend to pursue greater intrinsic satisfaction in the nonprofit sector. This paper also reports that education–job match is only significant for those whose first job was in the for‐profit sector.     

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.     

Reflecting on Grantee Evaluation Accountability to Funders: Exploring Power Dynamics with Grassroots Organizations in Communities of Color

Grassroots organizations in communities of color often struggle in their relationships with philanthropic partners, especially as it relates to the issue of accountability. This article focuses on exploring the nature of accountability within the social contract between the philanthropic sector and these grassroots organizations. Drawing on a review of the relevant literature and results of 11 structured interviews with leaders from the philanthropic sector and grassroots organizations in communities of color, key themes are identified. Recommendations are offered on how the hierarchy within the sector can be addressed and how the dialogue between these partners can be improved.     

Engaging stakeholders through social networking: How nonprofit organizations are using Facebook

Since social networking sites, such as MySpace and Facebook, began allowing organizations to create profiles and become active members, organizations have started incorporating these strategies into their public relations programming. For-profit organizations have used these sites to help launch products and strengthen their existing brands; however, little is known about how nonprofit organizations are taking advantage of the social networking popularity. Through a content analysis of 275 nonprofit organization profiles on Facebook, this study examines how these new social networking sites are being used by the organizations to advance their organization's mission and programs. Solely having a profile will not in itself increase awareness or trigger an influx of participation. Instead careful planning and research will greatly benefit nonprofits as they attempt to develop social networking relationships with their stakeholders.     

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.     

Environmental Nonprofit Campaigns and State Competition: Influences on Climate Policy in California

Over the past 20 years, the US Federal Government has been considered to be intransigent in its response to climate change by many commentators and not-for-profit environmental advocacy organizations (nonprofits). An enduring source of pressure on the US Government has been nonprofit campaigns operating at both a state and federal level. Six US environmental nonprofits representing a diversity of resources and prominence were selected for an in-depth examination of their climate-focused campaigns. Given the resistance at the federal level, these nonprofits have undertaken state-focused campaigns to achieve adequate climate policy development. This research examined some climate campaigns in California by the selected nonprofits that have supported, enhanced, and influenced the Californian Government’s efforts to address climate change. The campaigns have gained leverage from existing state competition for economic advancement and political leadership on issues of public concern. In addition, they appear to have benefited from a high level of environmental awareness in the community, a history of progressive environmental legislation, Governor Schwarzenegger’s use of climate change to differentiate his political leadership, and strong public trust of nonprofits. Recent climate-related political pledges and legislative changes at a federal level are convergent with the nonprofit-influenced, state-level developments.     

Does meeting standards affect charitable giving? An empirical study of New York metropolitan area charities

Charitable donations constitute a significant revenue source for many nonprofit organizations. To help donors decide which nonprofits to support, watchdog organizations such as the Better Business Bureau (BBB) Wise Giving Alliance have developed standards to promote wise giving. The effectiveness of these guides in channeling limited resources to the best‐managed nonprofits is not widely studied. This research attempts to empirically investigate the effects of standards on public giving, controlling for factors that have documented effects on donations. Specifically, it regresses public support on the extent to which local nonprofits meet the standards of the Better Business Bureau Serving Metropolitan New York, Mid‐Hudson and Long Island Regions, controlling for organization size, board size, service category, government funding, fundraising expense, and giving price. The study found that BBB standards have a positive effect on giving behavior. Meeting BBB standards is associated with higher levels of public support. Participating in assessment programs and striving to meet the standards are recommended for nonprofits seeking to improve funding through charitable contributions. Further study that extends the search for the mechanism that links meeting standards to improved donations is recommended.     

Building and valuing global brands in the nonprofit sector

Global nonprofit brands are the world's new “super brands” (Wootliff and Deri, 2001). Nonprofit organizations command unprecedented levels of trust, and nonprofit brand valuations are on par with major international corporations. Leaders and managers of nonprofits face new challenges in the stewardship of their brands. Based on current thinking in nonprofit management and detailed interviews with close to one hundred executives of ten international nonprofit organizations, this article draws strategic lessons on brand building and brand valuation activities of international nonprofits. The multiple roles and stakeholders that global nonprofit brands must address make nonprofit brand building complex and challenging. In particular, differences between advocacy and relief organizations must be explained. Despite the complexity, international nonprofit organizations may have an advantage over for‐profits in leveraging public trust and brand communication. Advocacy organizations in particular successfully link brand and cause to good effect. The valuation of nonprofit brands is a new strategic challenge with significant appeal, but also significant concerns for international nonprofits. In addition to providing nonprofit leaders and managers with a better understanding of brandbuilding activities, imperatives, and best practices in the field, this article outlines the opportunities and threats associated with the valuation of nonprofit brands.