Charting unexplored territory: Nonprofit funding relations and the nonprofit-market relationship

Understanding Nonprofit Funding: Managing Revenues in Social Services and Community Development Organizations, by Kirsten A. Grønbjerg. San Francisco: Jossey-Bass, 1993. 397 pp., $41.95 cloth. Nonprofit Organizations in a Market Economy: Understanding New Roles, Issues, and Trends, edited by David C. Hammack and Dennis R. Young. San Francisco: Jossey-Bass, 1993. 479 pp., $43.95 cloth.     

Nonprofit cash holdings and spending: The missing role of government funding

Charitable nonprofit organizations have long been under scrutiny with regard to how they manage excess funds, particularly cash holdings. Given previous empirical evidence, agency problems have been treated as an effective lens to explain the consequences of cash holdings among nonprofits. That is, nonprofit managers spend cash holdings for their own interests as opposed to the social interests of the organization. This study revisits the question of how charities manage extra cash and further examines the role of government funding in nonprofits' spending decisions. The results suggest that nonprofit managers make decisions on how to manage extra cash in accordance with the level of cash holdings; therefore, agency problems do not effectively explain how nonprofits manage extra cash. Furthermore, the results illustrate two contrasting roles of government funding in nonprofits' financial behavior: government funding may be used to monitor unscrupulous behaviors among managers, but it may also restrain nonprofits from investing in human capital.     

The Views of Nonprofit Executives on Educating Nonprofit Managers

Extraordinary nonprofit-sector expansion has produced organizations with complex missions and operations, and the managers responsible for their effectiveness require adequate preparation. Although no single degree program stands out as the clear preference of nonprofit executives, we propose that certain organizational characteristics are associated with the preference for specific degrees.     

Nonprofit and Social Marketing

Marketing Social Change: Changing Behavior to Promote Health, Social Development, and the Environment, by Alan R. Andreasen. San Francisco: Jossey-Bass, 1995. 367 pp., $30.95 cloth. Marketing Strategies for Nonprofit Organizations, by Siri Espy. Chicago, Ill.: Lyceum Books, 1993. 165 pp., $19.95 paper. Marketing Nonprofit Programs and Services: Proven and Practical Strategies to Get More Customers, Members, and Donors, by Douglas B. Herron. San Francisco: Jossey-Bass, 1997. 282 pp., $32.95 cloth.     

Contracting and Patterns of Nonprofit Governance

Executive staff and board members in nonprofit organizations that operate with government grants and contracts often work together to perform important governance functions. This shared responsibility can be predicted by strong executive leadership of the board, a board with highly regarded members, and affiliation with an influential statewide or regional association. The results of our research suggest that the distribution of governance responsibility in nonprofit organizations with government revenues should command the attention of researchers and activists.     

Nonprofit Board Balance and Perceived Performance

Based on prior literature, this article offers a reconciliation of the core roles of nonprofit boards and aligns these role‐sets with organizational theories. A survey instrument was developed and validated to measure each of four role‐sets (monitoring, supporting, partnering, and representing) to assess whether emphasis on specific roles affects board members’ perception of performance. Our study of nonprofit boards in a midsized midwestern city found that balance across the role‐sets was associated with effective organizational performance. Furthermore, when board members describe any of the four role‐sets as deficient, they perceive the organization as less effective. The results of the study provide practitioners with a validated survey tool that provides nonprofit boards with a method to identify which roles their board emphasizes.     

The Nonprofit Sector and Gender Discrimination

This article reports the results of an exploratory study of a cross section of nonprofit human service organizations that examined whether and to what extent a glass ceiling exists for women in this sector. The findings substantiate the existence of the glass ceiling phenomenon among the agencies studied. Men are disproportionately represented in management, particularly upper‐level management, and they earn higher salaries than women at all hierarchical levels of the organization.     

Accountability in Nonprofit Organizations

Accountability, Performance Reporting, Comprehensive Audit: An Integrated Perspective, by Guy LeClerc, W. David Moynagh, Jean-Pierre Boisclair, and Hugh R. Hanson. Ottawa: CCAF-FCVI (Canadian Comprehensive Auditing Foundation- Fondation Canadienne pour la Verification Integral), 1996. 373 pp., $85.00 (Canadian, plus shipping) cloth. Managing for Accountability: Preserving the Public Trust in Public and Nonprofit Organizations, by Kevin P. Kearns. San Francisco: Jossey-Bass, 1996. 255 pp., $27.95 cloth.     

Roles and Responsibilities of Community Nonprofit Boards

In this study, roles and responsibilities associated with nonprofit boards of directors were supported by a framework inclusive of Strategic Activities, Operations, and Resource Planning roles. This framework can be valuable for paid staff and volunteers in understanding the broad scope of the work of nonprofit boards and practical applications such as agenda setting for board meetings and designing board training and development activities.     

John Casey: The Nonprofit World. Civil Society and the Rise of the Nonprofit Sector

VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations -     

The Organization of Nonprofit Activities

This paper investigates the repertoire of organizational forms in Western societies in order to assess the nonprofit sector's distinctiveness. A repertoire of six different ideal type constructs is presented adding to and reformulating existing theories, which have primarily focused on the market and the firm. This new extended theoretical platform builds both on theories discussing market, organization, and governmental failures and on approaches where homo economicus is replaced by homo complexicus and transactions by interactions. This effort aims at making the nonprofit (or voluntary) sector in society both more visible and theoretically substantiated. At the end of this paper, the theoretical framework is applied by analyzing empirical nonprofit organizations.     

The Nonprofit Catallaxy: An Austrian Economics Perspective on the Nonprofit Sector

This paper examines the nonprofit sector from the perspective of the Austrian school of economic thought. In contrast to the traditional market failure approach, the Austrian school locates the role of the nonprofit sector in the facilitation of the spontaneous order and the utilization of local dispersed knowledge about the societal needs through a Hayekian “discovery procedure.” Another contribution of the Austrian school is in calling attention to the “calculation challenge” faced by the nonprofit sector, i.e., the reduced role of monetary signals as the informational basis for decision making. The calculation challenge brings up the important issue of societal feedback mechanisms operating in the nonprofit sector. It is shown that, in the nonprofit sector context, this challenge takes the form of the accountability problem.     

Nonprofit management in Europe and Asia

The State and NGOs: Perspective from Asia, edited by Shinichi Shigetomi. Singapore: Institute of Southeast Asia Studies, 2002. $28.50 cloth. The Emergence of Social Enterprise, edited by Carlo Borzaga and Jacques Defourny. New York: Routledge, 2001. $120.00 cloth.     

The Nonprofit Capacities Instrument

Nonprofits are guided by internal efforts and external mandates to build capacity. However, scholars and grant makers are hampered by varied definitions of the concept, competing but untested models, and the lack of a reliable and valid measure. This research defines nonprofit capacity as the processes, practices, and people that the organization has at its disposal that enable it to produce, perform, or deploy resources to achieve its mission. An inductive‐confirmatory two‐study approach introduces and validates the Nonprofit Capacities Instrument, a 45‐item measure of eight nonprofit capacities derived from existing instruments. The capacities are (1) financial management, (2) adaptive capacity, (3) strategic planning, (4) external communication, (5) board leadership, (6) operational capacity, (7) mission orientation, and (8) staff management. Intriguingly, this research demonstrates that nonprofit capacity is not a singular or second‐order concept, but better described in its plural form, nonprofit capacities.     

Exploring Nonprofit Executive Turnover

Projections of executive turnover loom over the three sectors with aging baby boomers filling many executive‐level positions, and research into causes, outcomes, and processes of turnover are timely inquiries. Yet, scholarly attention into nonprofit executive turnover has been limited to date and has not sufficiently examined actual turnover events. To help address this gap, forty nonprofit organizations that had recently experienced executive turnover were selected from a national random sample, and the current executives participated in an interview. This qualitative data was analyzed to identify factors and dynamics that define nonprofit executive turnover. These findings both confirm practical knowledge and offer new insights relevant to future research and practitioners alike.     

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.     

Sensegiving,Leadership, and Nonprofit Crises: How Nonprofit Leaders Make and Give Sense to Organizational Crisis

This study examined how 43 nonprofit leaders across 15 U.S. states make sense of organizational crises in nonprofit contexts, as well as what they think effective leadership is during crises. Findings revealed perceived nonprofit organizational crises emerging from disasters, disruption of mission delivery, internal stakeholder challenges, and unanticipated occurrences, while six major characteristics of effective crisis leadership emerged including being a team player, being strategic, being transparent with stakeholders, being quick to respond, being self-composed, and being prepared. Comparisons to previous empirical investigations of nonprofit leadership and crisis response yielded additional insights into effective crisis leader sensemaking in nonprofit contexts—most notably that nonprofit crisis leaders leverage sensegiving frameworks of instrumental knowledge, normalcy, and dynamic learning. Further analysis demonstrated these diagnostic and prognostic sensegiving activities to be more clearly observed than motivational sensegiving activities across crisis leaders in nonprofit contexts.     

Four Books on Nonprofit Boards and Governance

Governing Boards, by Cyril O. Houle. San Francisco: Jossey- Bass, 1997. 223 pp., $21.95 paper. Boards That Make a Difference: A New Design for Leadership in Nonprofit and Public Organizations, by John Carver. 2nd ed. San Francisco: Jossey-Bass, 1997, 241 pp., $28.95 cloth. Perfect Nonprofit Boards: Myths, Paradoxes, and Paradigms, by Stephen R. Block. Needham Heights, Mass.: Simon & Schuster, 1998, 149 pp., $21.95 paper. Nonprofit Boards: Roles, Responsibilities, and Performance, by Diane J. Duca. New York: Wiley, 1996, 192 pp., $29.95 cloth.     

Outcomes Assessment and the Paradox of Nonprofit Accountability

Leaders of nonprofit organizations face a particular bind in responding to the demands for results‐based accountability. If they focus only on the project‐level outcomes over which they have the most control or for which indicators are readily available, they risk default on the larger question of accountability to publicly valued goals. On the other hand, if they try to demonstrate the impact of their particular projects on communitywide outcomes, they risk taking credit inappropriately or shouldering the blame for indicators beyond their control. Here, I present findings from a research project, conducted in collaboration with economic development organizations on the north coast of California, that explored the practical demands and dynamics associated with this paradox. The key challenges are more civic and political than technical.