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.     

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.     

Termination of Nonprofit Alliances: Evidence from China

Nonprofit alliances have grown with a striking speed in recent decades. While researchers focus on why nonprofits build interorganizational partnerships, few discuss how such partnerships are terminated. Through a multiple case study of 13 nonprofit alliances that had been established in response to the 2008 Sichuan earthquake in West China, this study explores how nonprofit alliances were terminated and what caused their termination. Four patterns of alliance termination emerged out of our data analysis: failure at birth, planned termination, failed transition, and evolution into independent organizations. Four determinants were identified as accountable for alliance termination: political pressure, resource shortage, short-term orientation, and leadership failure.     

Public reporting: A neglected aspect of nonprofit accountability

Nonprofit organizations have a compulsory external accountability (largely involving financial reporting) to government agencies such as the Internal Revenue Service and state regulators. They also have a pragmatic “must‐do” accountability to their funders, clients, and other obvious stakeholders. But are nonprofits also accountable to the public at large? If so, how can such accountability be implemented, given the diffuseness and breadth of the public as an audience? This article suggests that nonprofits should consider the citizenry as a stakeholder, if only due to the substantial taxpayer subsidy of the sector. The theory of public reporting that emerged in public administration literature beginning in the 1920s and 1930s can be helpful. Using principles, templates, and examples from public administration, nonprofit organizations can pursue more vigorous public reporting as one method to increase citizen confidence in their activities and in the sector as a whole.     

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.     

Dynamics between fragmentation and unity: Identity and nonprofit relationship management in the Asian American Community

Focusing on community-based nonprofits with specific missions of serving the Asian American community, this study examined the dynamics between various layers of identity, including ethnicity and panethnicity, and identified how intercultural relationship management contributed to a sense of community and empowerment among minority communities. Interviews from both nonprofit community organizations and community members revealed the following major findings. First, Asian American community nonprofits needed to manage a myriad of identities within their community, particularly the interplay between diverse ethnic identities and the pan-Asian ethnic identity. To help manage these identities, these nonprofits adopted a dual approach using both segmented outreach and coherent advocacy. Second, these community nonprofits used intercultural relationship management to build a sense of community and efficacy, promoting outcomes such as health awareness, communicative activeness, cultural shift, political engagement, and community alliances. This study contributes to relationship management literature through introducing identity-based relationship building strategies.     

Crisis on the Border: Specialized Capacity Building in Nonprofit Immigration Organizations

Traditional views of the nonprofit–government relationships suggest that while government may depend on nonprofit organizations to provide human services, nonprofits must also conform to government standards, monitoring, and regulation. In this paper, we argue that through specialized investments in capacity building, nonprofit providers can become irreplaceable to government funders. By developing a comparison case study of two organizations serving unaccompanied minor children who cross the U.S.–Mexico Border, we provide evidence of specialized capacity investments in a complex policy environment and discuss the implications of capacity building for both government and nonprofits.     

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.     

Voluntary contributions and wages in nonprofit organizations

Voluntary work provides a major source of labor for many nonprofit organizations. Consequences of volunteers and paid staff working alongside each other in nonprofits are well documented. This article contributes to this strand of literature and investigates whether the presence of volunteer work influences paid employees' wages in nonprofit organizations. We estimated a multilevel wage equation accounting for personal characteristics of workers and characteristics of nonprofits. The analysis revealed that nonprofit organizations engaging volunteers pay lower wages to their employees. Our findings contribute to the understanding of wage‐setting behavior of nonprofits and improve the methodological approach of empirical research in this field.     

Factors characterizing the most effective nonprofits managed by volunteers

This article reports on an empirical study of thirty-nine volunteer-managed nonprofit organizations (voluntary associations, not paid staff nonprofits) in a small suburb of Boston. Reputation for effectiveness in achieving goals has been found to be significantly associated with nonprofit nature, governance, and formalization. Many hypotheses suggested by others for nonprofit organizations with paid staff do not seem to transfer to volunteer nonprofit groups. Practitioners can utilize the present findings to improve volunteer nonprofits.     

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.     

Structure and accountability a study of national nonprofit associations

In the 1990s, the integrity and performance of nonprofit organizations in the United States have come increasingly under attack, and there are new calls to hold nonprofit organizations more accountable for their behavior and performance. This article reports on a study of the organizational structures of national nonprofit associations and asks how these umbrella organizations can help to self-regulate the sector through appropriate checks and balances between the national organization and local affiliates. The authors identify a number of differences in how associations with alternative structures hold local affiliates and national organizations responsible for their performances, and they conclude that structure is an avenue of self-regulation for nonprofit organizations deserving further attention.     

Green matters?

Although the environmental impact of nonprofit organizations is likely significant, those in the sector seem to have largely ignored this fact. We examine a model of environmental performance for corporations and consider its relevance to nonprofit organizations. Our analysis suggests that motivators of environmental performance in nonprofit organizations remain minor, and that countervailing barriers to green behavior by nonprofits remain more significant than those faced by businesses.     

Toward More Targeted Capacity Building: Diagnosing Capacity Needs Across Organizational Life Stages

Investments to build nonprofit organizational capacity have increased rapidly in recent years as both funders and nonprofits seek ways to improve performance. Yet, while research has elucidated the variety of capacity areas organizations generally depend on, we do not yet have a clear empirical understanding of which capacity areas are important to focus on developing or how these capacity needs vary across organizations. Using a life-cycle perspective and extensive data on 71 human service organizations, we examine the relative strength of ten capacity areas at different stages of the nonprofit life-cycle. Findings contribute greater empirical grounding for research on organizational capacity development and have implications for researchers, managers, and funders interested in nonprofit capacity building.     

What Influences the Location of Nonprofit Organizations? A Spatial Analysis in Brazil

What are the local characteristics influencing where new nonprofits will be established? How important are community needs, available resources, or the existence of similar organizations for nonprofits’ location? This paper analyzes how the characteristics of 5562 Brazilian municipalities in the year 2000 help explain the location of nonprofits formed between 2001 and 2010. Based on geographically weighted regressions, results indicate that neither access to resources nor poor socioeconomic indicators are powerful influences on nonprofit location in Brazilian municipalities. The main predictor of nonprofit entry is a high pre-existing density of nonprofits in that area. These findings, however, vary across regions and nonprofit fields of activity. By mapping the effect of key explanatory variables, this paper helps understand nonprofit location. The methodology and findings on nonprofit location presented here are novel and may contribute to research in other countries.     

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.     

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.     

What Affects the Strategic Priority of Fundraising? A Longitudinal Study of Art,Culture and Humanity Organizations’ Fundraising Expenses in the USA

Fundraising is a crucial activity for many nonprofit organizations. However, scant research has examined how the strategic priority of fundraising activities may vary across organizations and over time. This study addresses this gap in knowledge by examining how economic and organization-specific financial conditions predict the priority of fundraising in a nonprofit organization. In particular, this study examines the changes in the ratio of art, culture and humanities organizations’ fundraising expenses to their total expenditure during the period of 2005–2012, which includes the great recession of 2007–2009. The findings reveal that, when facing an economic crisis, the ratio of fundraising expense to total expenditure increases, suggesting that fundraising becomes a higher priority under a hostile economic condition. The analysis also reveals differences in nonprofits’ reaction to recession depending on their revenue mix, with donative nonprofits reacting more sensitively than commercial nonprofits.