Do Mission Statements Matter for Nonprofit Performance?

In this exploratory study, we examine whether organizational mission statement attributes make a difference to the performance of nonprofit performing arts organizations. We use text analysis to measure two semantic attributes—activity and commonality—of mission statements. We examine whether these attributes are associated with improved performance for the instrumental and expressive functions of nonprofit performing arts organizations. Our findings indicate that the mission statement attribute activity is associated with improved performance for both instrumental and expressive functions. Our analysis of nonfindings for the mission statement attribute commonality suggests that there is a need to develop and use content analysis tools tailored to nonprofit contexts.     

Institutional isomorphism and nonprofit managerialism: For better or worse?

Nonprofit organizations (NPOs) have increasingly adopted business‐like practices as a response to institutional pressures. Some researchers argue that this development leads to mission drift, whereas others find a positive effect on organizational performance. However, the institutional pressures responsible for shaping the nonprofit sector have remained hard to distinguish from each other. This study explores the consequences of mimetic, normative, and coercive pressures, and looks at how they affect managerialism, organizational performance, and mission drift. We link these concepts through a structural equation model based on survey data and find that one aspect of managerialism, strategic behavior, is a key construct in influencing the response to isomorphic pressures and can positively affect organizational performance while holding off‐mission drift. Normative isomorphism even has a direct positive effect on organizational performance. Mission drift can take place when organizations are under coercive pressure without having strategies or internal processes in place. These findings imply that organizations should invest in their strategy and the professional development of their staff to increase organizational performance and avoid mission drift.     

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.     

Surviving mission drift: How charities can turn dependence on government contract funding to their own advantage

The widespread contracting out to British charities of welfare services previously furnished by the state has resulted in many charities operating in fields well outside those specified by their original missions. Challenges connected with charity mission drift have received a great deal of (mainly negative and critical) attention in the nonprofit practitioner literature in recent years, yet no academic research has been completed into exactly how charities respond managerially and operationally to government‐induced mission drift. This empirical study attempted to fill this important gap in knowledge about charity management through in‐depth case studies of three charities known to have experienced substantial mission drift during the last decade, focusing on the styles and types of approach the organizations had adopted in their dealings with government funding agencies. It emerged that the three charities accepted mission drift as a fact of life. Rather than simply supplying contract services to government bodies, the charities were highly proactive in seeking to initiate, direct, control, and assume overall strategic responsibility for state‐funded activities.     

What Drives Advocacy? An Exploration of Value,Mission, and Relationships

How advocacy is interpreted and how it fits into an organization’s strategy are areas in need of additional study. Moreover, because nonprofit organizations are believed to have advocacy-based missions that drive their activities and services, the connection between an organization’s mission and its advocacy activities also needs further study. In an effort to address these issues, the purpose of this qualitative study was to explore how advocacy is interpreted in the context of an organization’s mission and how advocacy activities are viewed within human service NPOs. Five themes were identified, all providing support for findings in previous advocacy research.     

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.     

Understanding how corporate social responsibility partnership factors influence nonprofit supportive intentions

Public relations literature on corporate social responsibility (CSR) has long detailed the impact of CSR outcomes for corporations. This study seeks to understand how CSR influences the nonprofit partners involved in these initiatives and what types of CSR partnerships lead to nonprofit supportive intentions. This study merges perspectives on organization-public relationships (OPR) with nonprofit management literature. An online 2 (NPO reputation: low vs high) x 2 (partnership duration: short vs. long) x 2 (CSR fit: low vs. high) experiment was conducted. A few key factors emerged in the analysis: Positive nonprofit reputation strongly predicted all OPR outcomes and mission accomplishment. Unexpectedly, the short-duration condition led to more positive outcomes and intentions. Fit did not seem to have a direct effect on outcomes, but the high-fit, short-duration partnership led to increased levels of all outcomes. For mediation, satisfaction and commitment had the strongest indirect effects on nonprofit supportive intentions (donation, volunteer, and word-of-mouth). This study expands the understanding of CSR effects on nonprofit partners, specifically by showing how different CSR partnership types play a role in the relationship-building efforts of nonprofits. Additionally, demonstrating how mission accomplishment can strengthen these relationships helps to disentangle the unique position of nonprofits in CSR, whose reputation and mission are at stake.     

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.     

Nonprofit mission statement focus and financial performance

Mission statements have been adopted nearly universally in nonprofit organizations. Their ubiquity is based on a presumption that a well‐designed mission statement is linked to better organizational performance because it provides a framework for decision making, influence over staff and volunteer motivation, and a mechanism for signaling organizational legitimacy to stakeholders. Despite collective confidence in mission statement utility, the relationship between mission statements and performance has received minimal attention. In this exploratory study we measured several attributes of mission statements in women's rights nonprofit organizations, with particular attention to the degree to which the statement focuses on organizational purpose and the relationship between focus and several measures of organization financial performance. The findings indicated that mission statements with a more focused geographic scope were associated with lower overhead ratios. In contrast, mission statements that identified more target client groups were associated with larger one‐year increases in contribution. Despite the statistical significance, the relationships were weak, calling into question common assumptions about the importance of the mission statement to a nonprofit organization.     

Foundations and innovation in the nonprofit sector

Using a sample of 17 foundations that are at the forefront of encouraging innovation this study explored foundations' motivations behind funding innovation, their perceived ability to impact the levels of innovation in nonprofit organizations, and strategies that foundations are using or can use to encourage innovation in nonprofit organizations. The results showed that among the major motives behind funding innovation were leveraging the capital, honoring the foundations' core identity (mission and values), and desiring to encourage innovation in nonprofit organizations. Five strategies/mechanisms that foundations are using/can use to encourage innovation in nonprofit organizations were identified: (a) offering innovation awards/grants as catalysts for innovation, (b) providing risk capital and supporting early stage idea development, (c) educating other foundations on the value of innovation and serving in a convener role, (d) serving as thought leaders, and (e) increasing nonprofit organizations' capacity for innovation. Implications for practice are discussed along with recommendations for future research.     

“To be a business and to keep our humanity”

In recent years, the political nature of nonprofit funding has been well established, with research focusing on increased demands for accountability (Eikenberry and Kluver, 2004), difficulties in selecting accountability measures (Reed, Jones, and Irvine, 2005), and the shift from organizational mission that can occur while trying to adhere to funding requirements (Adcroft and Willis, 2005; Parsons and Broadbridge, 2004). This article examines the dynamics between a funder and the nonprofit organizations it funds within an evolving accountability process. Specifically, we use qualitative methods to examine the negotiations between the funder and the nonprofits. Both sides in the funding relationship face tensions as they attempt to work within the constraints of this specific funding regime while trying to maintain their focus on social justice outcomes.     

The Effect of Revenue Diversification on Output Creation in Nonprofit Organizations: A Resource Dependence Perspective

Nonprofits continue to be faced with financial challenges to fulfill their missions. Both the academic literature and nonprofit practitioners have explored revenue diversification and concentration strategies to meet these challenges. While these two strategies are essentially antagonistic, both have received support as being viable strategies to create better outcomes for the organization. This article examines whether revenue diversification or concentration strategies lead to greater mission outputs in a nonprofit context. Using resource dependence theory as a guiding framework, two opposing hypotheses are tested to gain more insight into the diversification versus concentration dilemma. A unique dataset is built and utilized to estimate a zero-inflated negative binomial regression model to assess the correlation between revenue diversification and mission outputs. Results indicate that revenue diversification (and not concentration) is associated with an increase in organizational outputs.     

The Impact of Devolution on Nonprofits

The following article reviews the results of a multiphase study of nonprofit social service organizations serving children and youth in Cuyahoga County, Ohio. The purpose of the study was to assess the impact of devolution and related efforts to introduce the new public management in the nonprofit sector. Study results strongly suggest that the capacity of community-based and faith-based organizations to adopt the business-oriented approach required to meet the expectations of government contracts is profoundly limited by their financial and human resources and by the conflict that a market orientation can present to the nonprofit mission.     

Accounting for Social Value in Nonprofits and For‐Profits

The authors argue that social value can serve as a bridge between the nonprofit and for‐profit sectors. They further propose that social value is not simply an abstract concept but can be measured by applying social accounting methods. The authors argue that nonprofits are founded on a social mission but that traditional accounting approaches do not properly assess their social products. They illustrate the centrality of social value, both to nonprofits and for‐profits, in two ways: (1) a discussion of for‐profit firms that behave much like nonprofits and (2) an application of the social accounting model. The authors discuss two types of firms: (1) for‐profits whose shares are held in a trust and therefore operate much like corporations without shareholdersor like nonprofits and (2) for‐profits whose owners do not exercise the rights associated with their property. They then apply a social accounting model to nonprofit employment training programs to illustrate how the inclusion of social variables changes the assessment of an organization's value. They conclude with a discussion of a social accountability framework that embraces both nonprofits and for‐profits.     

What Nonprofit Executives Want and What They Get from Board Members

In theory, nonprofit boards of directors exist to perform mission‐setting and oversight functions that help to ensure organizational accountability. Yet there is evidence that board behavior often falls short of this ideal. Using survey data from a sample of 241 executive directors of nonprofit agencies, we investigated whether nonprofit boards are meeting executive directors’ expectations, and if not, what factors explain this? We find that although board behavior tends to align closely with executive directors’ preferences for involvement in administration and management tasks, there is a greater disconnect between board behavior and executive directors’ preferences for involvement in mission‐setting and oversight duties. Factors that mitigate this gap include organizational professionalization and stability, whereas more extensive reliance on government funding exacerbates it. Female executive directors experience a greater disconnect in their preferences for board involvement and actual board involvement than male executive directors. We conclude by discussing the implications of our findings for both theory and practice.     

The Role of Nonprofit Management Support Organizations in Sustaining Community Collaborations

This articles uses case studies to explore the theory that nonprofit management support organizations (MSOs) should consider taking on the role of convener and facilitator of community collaborations. They can do this work by facilitating planning and change and providing data to inform decisions about how to improve communities. In acting as a community support organization, their primary mission would be to build the capacity of all sectors to work together to solve social problems rather than simply to build the management capacity of individual nonprofit organizations.     

Nonprofit management practices and work processes to promote gender diversity

Nonprofit organizations have long provided an important space for women to establish roles in public life. Using establishment‐level data on for‐profit and nonprofit organizations, we show that the proportions of women in full‐time and mission‐critical positions are higher in nonprofits. In contrast, for‐profit businesses have more women in part‐time jobs and in jobs that are peripheral to the organizational purpose. We also demonstrate that the greater proportions of women in full‐time and mission‐critical positions in nonprofits are due to the use of inclusive work processes and transparent human resource management practices. Our findings provide evidence to pursue the aspects of nonprofit organizations that expand opportunities for working women.     

Entrepreneurial NPOs in Russia: Rationalizing the Mission

Nonprofit organizations in Russia are introducing for-profit activities as a means of gaining autonomy from external donors, and as instruments of strategic planning and sustainable development. This study focuses on organizations that work with welfare provision and explores how they reconcile entrepreneurial activities with their social mission. More specifically, we interrogate how two institutional logics, business and nonprofit, are defined and reconciled in organizational identities, structures and hierarchies. Socially oriented nonprofits define their mission through service to beneficiaries, through personal and professional dedication to beneficiaries’ well-being, and through making an impact on public policies and the society at large. They mimic a business approach in strategic planning and meticulous reporting, but subordinate profit-seeking to social mission by integrating entrepreneurial activities into already existing organizational structures, or by separating them into independent entities.     

“We Actually Trust the Community:” Examining the Dynamics of a Nonprofit Funding Relationship in New Zealand

Funding relationships in nonprofit management are increasingly defined by a philosophy of rational management, characterized by measurement of outputs and benchmarking, which represents an audit culture system (Burnley, Matthews, & McKenzie, 2005). There is concern that these approaches are constantly undermining the mission of community service nonprofit organizations (Darcy, 2002). In this research, we analyzed the management of funding relationships by examining dynamics within a nonprofit funding relationship in New Zealand. Through focus groups we explored the relationship between 17 representatives from nonprofit organizations and four Board members of a funding Trust. The management of this funding relationship was characterized by an appreciation of the diverse nature of nonprofit organizations, a balance between trust and control, and communication. We suggest that elements of these dynamics could be incorporated into nonprofit funding relationships in order to challenge an over-reliance on audit culture systems, and to re-establish relationships characterized by interaction between nonprofit organizations and their funders. Finally, we call for future research in this area.     

Managing stakeholder relationships and nonprofit organization effectiveness

This research examined how nonprofit organizations manage their relationships with stakeholders and how these practices relate to perceived organization effectiveness. We conducted semistructured, open‐ended interviews with executive directors of nonprofit organizations (NPOs) to discover whom they see as their stakeholders, the types of expectations they encounter from stakeholders, and the practices they use in managing stakeholder relationships. The two nonprofits that were evaluated as most effective used a consistent, thematic rationale in dealing with stakeholder issues: one organization discussed its actions in terms of its mission and core values, the other based its actions in terms of building relationships and networks. Our study suggests that organizations that ground their external relations in issues that are recognized as good nonprofit management, and do so consistently across stakeholder groups, will tend to be rated as more effective by multiple, external evaluators.