Advancing nonprofit organizational effectiveness research and theory: Nine theses

Drawing on the general literature on organizational effectiveness, the specialized literature on nonprofit organizational effectiveness, and recent research in the field, this article advances nine theses, or conclusions, about the effectiveness of public benefit charitable, nonprofit organizations (NPOs). NPO effectiveness is (1) always comparative, (2) multidimensional, (3) related to board effectiveness (but how is not clear), (4) related to the use of correct management practices but not in any simple “best practices” way, and (5) a social construction. Furthermore, (6) it is unlikely that there are any universally applicable best practices that can be prescribed for all NPO boards and management, (7) organizational responsiveness is a useful organizational‐level effectiveness measure, (8) distinguishing among types of NPOs is important and useful, and (9) level of analysis makes a difference in researching and understanding effectiveness. The article concludes by considering implications for organizational practice, boards and governance practices, program evaluation, including program outcomes assessment, and capacity building and capacity builders.     

In Search of Strategy

The canon of volunteer administration contends that adoption of specified practices separates effective from ineffective programs. Alternatively, structural contingency and strategic human resource management theories suggest that managers make adoption decisions based on how organizational circumstances dictate the applicability or efficacy of particular practices. We test propositions that universalistic adoption of “best practices,” contingent adoption of practices, and configurational adoption of bundles of practices are associated with program outcomes of recruitment ease, retention of volunteers, and the net benefits that volunteers bring to organizational operations. With all sets of tests garnering limited empirical support, we conclude that human resource practice in volunteer administration is loosely coupled with outcomes, but that some organizations do—and many more should—manage according to the singular context of their institutional and external environments.     

Nonprofit organizations in between the nonprofit and market spheres: Shifting goals,governance and management?

In spite of the belief instilled by the New Public Management reforms that nonprofit organizations (NPOs) can benefit from more management, more measurement and more market practices, systematic knowledge on the organizational effects of NPOs incorporating business practices in their day‐to‐day functioning remains absent to date. This research note addresses this limitation by reviewing 49 research articles. The focus lies on the redefinition of nonprofits' mission and income streams, changing governance arrangements and shifting management practices. We find that, despite numerous detrimental effects cited in the literature, (a) generating commercial income can contribute to the financial stability of NPOs, and (b) hybridization towards the market domain can strengthen the organizational legitimacy of NPOs, suggesting that imitating for‐profit enterprises might contribute to nonprofit functioning in perception, rather than in practice.     

Financial control in religious organizations: A status report

Several recent high profile cases of financial mismanagement in religious organizations have highlighted the need for all religious nonprofit organizations (NPOs) to have strong internal accounting controls. These organizations are often small, rely on a great deal of volunteer support, and as a result may not have the professional oversight to adequately monitor the resources of the organization or the behavior of its leaders. The purpose of this article is to assess the current state of financial control for one segment of religious NPOs, churches, and give some suggestions for improvement. In this study over 530 churches of widely varying sizes responded to an extensive survey about specific internal controls they may or may not have in place. The results are assessed in light of preferred practices. Readers can use this information to strengthen current practices and provide a greater level of assurance that an organization is directing its resources toward its mission.     

Volunteers for NPOs in Welfare Services in Iceland: A Diminishing Resource?

The question of declining membership of non-profit organizations (NPOs) has been central in academic discussion and research has indicated changes in the way people volunteer. Less emphasis has been on the functions of volunteers as a resource for NPOs and how changes such as increased reliance on professionals in their operations can influence the volume and type of volunteering. This paper examines the value of volunteers as a resource for Icelandic NPOs in the field of welfare services. It is based on a study of the majority of active Icelandic NPOs in the welfare field, as well as an analysis of their respective websites. The findings show that volunteer contributions do not constitute a significant part of the activities of most Icelandic NPOs in welfare services. Apart from membership of boards, volunteers seem to be used primarily as a means of supplementing other resources, such as temporary fundraising efforts. However, the level of volunteering varies according to the size and operational type of organization.     

Devolution of Services to Children and Families: The Experience of NPOs in Nanaimo,British Columbia,Canada

This study focuses on the current experience of Nanaimos nonprofit family and child service organizations (N = 29) providing services on behalf of government and their adaptation to this devolution. The effects and consequences of contracting on organizational practices, accountability, and services were explored through interviews and focus groups with executive directors, board members, line staff, government representatives, and the United Way. Results show that a significant proportion of funding comes from provincial government contracts. The funding climate is uncertain, and there is considerable confusion, stress, and time involved with the contracting process. Accountability requirements are demanding and nonprofit organizations (NPOs) express concern about a shift to a business management model. Recommendations include a need for increased collaboration between NPOs, a body that speaks for the voluntary sector, and improved relationships between NPOs and government funders.     

Nonprofit Organizational Effectiveness: Contrasts Between Especially Effective and Less Effective Organizations

How do key stakeholders of nonprofit organizations (NPOs) judge the effectiveness of their organization? Are the judgments of stakeholders similar, and how are board effectiveness and the use of practitioner-identified correct management procedures related to judgments of effectiveness? This study focuses on a subset of especially effective and less effective NPOs from a larger sample and finds that the especially effective have more effective boards (as judged by various stakeholder groups), have boards with higher social prestige, use more practitioner-identified correct management procedures, and use more change management strategies. Practical implications discussed include adopting more correct management procedures and change management strategies.     

Determinants of Charitable Donations to Large U.S. Higher Education,Hospital, and Scientific Research NPOs: New Evidence from Panel Data

We provide improved evidence on effects that fund-raising, government support, and program revenue of U.S. higher education, hospital, and scientific research nonprofit organizations (NPOs) have on donations to those NPOs and provide improved estimates of price elasticities of donations to, and donor demand for output of, those NPOs. Applying econometric tests, we find the best-specified model is two-way fixed effects, which controls for organization-specific and time-specific factors. Results suggest that U.S. higher education, hospital, and scientific research NPOs fund-raise to the point where the marginal fund-raising dollar brings in zero dollars of donations, donor demand for output of hospitals and scientific research NPOs is price inelastic and price elastic, respectively, and results are not sensitive to specification of price.     

Organizational Antecedents of Pay-for-Performance Systems in Nonprofit Organizations

The applicability of pay-for-performance systems (PfP-systems) in nonprofit organizations (NPOs) is discussed controversially both in literature and in practice. Existing theoretical models emphasize the importance of the employee’s motivation and output control for the effectiveness of PfP-systems. However, empirical evidence on which factors influence PfP-system’s introduction in NPOs is still lacking. Based on an exploratory study of nine Austrian NPOs, this paper develops hypotheses on what organizational factors distinguish NPOs that rely on PfP-systems for managing employees’ performance differences from those that use alternative approaches (e.g., job enrichment, NPO-spirit). Findings suggest that decisions on the application of PfP-systems are influenced by five determinants: perceived degree of competitiveness regarding funding and service provision; degree of strategic freedom; clarity of strategic objectives; existence of management instruments; and organizational culture.     

Structures,Challenges, and Successes of Volunteer Programs Co‐managed by Nonprofit and Public Organizations

This article presents a mixed‐methods, multicase study and comparison of volunteer programs in US national parks that have evolved, in response to growth and fiscal pressures, to be co‐managed by national park staff and their nonprofit support partners. Findings detail why and how the expanded partnerships were formed; how they operate; challenges they face; ways in which they adhere to, stretch, and depart from theories of nonprofit management, collaboration, and program institutionalization; and the significant—even exponential—volunteer program growth that resulted in each case. These nonprofit?public volunteer program partnerships—at Acadia, Arches and ­Canyonlands, Cuyahoga Valley, Golden Gate, the National Mall, and Yosemite national park sites—employ many standard forms of interorganizational relations, even though in these cases the nonprofits give money to the government organization instead of the reverse. Their volunteer program and management structures also share similar elements because of coercive, normative, and mimetic pressures. At the same time, each volunteer program partnership is a distinct blend of collaboration and management practices because of the unique natural features, climate, needs, adjacent populations, and personalities of leaders at each site. The cases employ innovative strategies to substantially increase the number of staff who lead volunteer programs. Recommendations are offered for nonprofit management research and practice, and findings are instructive for organizations that utilize volunteers either as a single entity or as part of a collaboration.     

Volunteer Motivation and Organizational Climate: Factors that Promote Satisfaction and Sustained Volunteerism in NPOs

Keeping volunteers committed and engaged is one of the toughest challenges for NPOs. The aim of the present study is to investigate the individual and organizational factors that promote volunteer satisfaction and, vice versa, foster intentions to quit. Two hundred forty-seven volunteers operating in four different NPOs were asked to fill in a self-report questionnaire that aimed to explore their motivations to volunteer, their degree of satisfaction and their perception of the organizational climate in the NPO they worked with, in addition to providing details of the activities which they were involved in. Results showed that the organizational climate mediates the relationship between autonomous motivation and satisfaction, as well as that between external motivation and intentions to leave an organization.     

“Don't you want to stay?” The impact of training and recognition as human resource practices on volunteer turnover

Managing volunteers is a difficult undertaking. This study draws on human resource (HR) management theory and literature to investigate the effect of two HR practices—training and recognition—on volunteer turnover. We use longitudinal administrative data collected by an Indiana nonprofit organization, which contains individual volunteer characteristics, organizational HR practices, and information on actual turnover behavior. We found that recognizing volunteer contributions with awards predicted volunteer retention in the following year. Training did not have a direct effect on volunteer turnover, but interacted with gender; men who received training were more likely to stay than women. The study contributes to the literature on HR management in the volunteer context, adds to the emerging literature on awards as incentives for volunteers, and addresses the common method bias by using longitudinal data.     

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.     

The Third Way Reconfigured: How and Why Nonprofit Organizations are Shifting Their Human Resource Management

Nonprofit organizations (NPOs) are facing increasing demands to become more efficient and effective, especially given increasing financial cutbacks, the rising demand for services and the push toward performance-related management. Human resource management (HRM) is claimed to play an important role in coping with these challenges. Yet, within the field of nonprofit management, little is known about the configuration of HR architectures in NPOs, let alone their impact on performance. To bridge this gap, we conduct an exploratory multiple case study in ten health and social services NPOs. The case study data indicates a shift toward a dominant strategic orientation in the configuration of HRM. Our article makes a central contribution by uncovering a third way in which NPOs seek a specific configuration of HRM to confront the challenges they face in their internal and external environments.     

A nonprofit manager's guide to online volunteering

As access to the Internet expands, volunteer managers have the option of using this new technology to manage pools of volunteers online. Online volunteering can appear deceptively simple: post an opening, select a volunteer, and then manage them by e‐mail. However, our evaluation of an active online volunteering service used by more than three hundred organizations and ten thousand potential volunteers indicates that additional planning and management are frequently needed. Through an analysis of two years of quantitative data and interviews with more than forty volunteers and managers, we have extracted suggested practices and programmatic implications for managers in the areas of program design, volunteer selection, training, ongoing operations, and evaluation.     

The Effects of Volunteerism on Self-Deception and Locus of Control

This study examines whether volunteering for not-for-profit Organizations (NPOs) which are involved in providing social welfare services and which actively promote sociobehavioral factors like social responsibility, leadership, and self-confidence among its volunteers, reduces an individual’s likelihood of engaging in corrupt practices. We identify two psychological traits: propensity to rationalize (as evidenced by self-deception) and an external locus of control (as compared to an internal LOC) that facilitate unethical behavior. With the help of volunteers from two NPOs, we investigate whether engaging in social welfare activities organized by such NPOs would create awareness about the adverse consequences of corruption faced by large segments of the society, which in turn would make it difficult to rationalize unethical and corrupt acts. Additionally, most NPOs actively strive to develop self-confidence and leadership skills among its volunteers. Prior literature indicates that individuals possessing such qualities are more likely to have an internal LOC and also that individuals possessing an internal LOC are less likely to act in a corrupt manner. The overall results indicate that greater experience with such NPOs leads to a significant reduction in propensity to rationalize and leads to a higher likelihood of having an internal LOC.     

The influence of perceptions of practice characteristics: An examination of agricultural best management practice adoption in two Indiana watersheds

Agricultural best management practices (BMPs), or conservation practices, can help reduce nonpoint source pollution from agricultural lands, as well as provide valuable wildlife habitat. There is a large literature exploring factors that lead to a producer’s voluntary adoption of BMPs, but there have been inconsistent findings. Generally, this literature has not examined specific attributes of BMPs that may affect acceptability to farmers and ultimately adoption. To address these limitations, a qualitative analysis of in-depth interviews with farmers was conducted to determine which characteristics make four common BMPs more or less acceptable to agricultural producers. Interviews were conducted with forty-five producers in two watersheds in Indiana, USA. The producers were asked about their use of these conservation practices and the reasons behind their decisions. This study outlines the perceived characteristics of each conservation practice that are most important in either facilitating or impeding adoption of those practices. Results indicate that perceived high levels of relative advantage (e.g., reduced inputs, time-savings, and on-farm and environmental benefits), compatibility (with farm system and needs of producer), and observability (observing practice’s advantages) are most important in increasing adoption of conservation practices. Low levels of perceived relative advantage and incompatibility of practices were found to be most important in non-adoption of conservation practices. Perceived risk and complexity associated with specific practices were only found to limit adoption for a few practices, though it was an important barrier for conservation tillage. In order to increase adoption, conservation promoters should focus on raising awareness of the on-farm and financial benefits, the environmental benefits, and compatibility of conservation practices with current farm operations.     

Retaining Critical Human Capital: Volunteer Firefighters in the Commonwealth of Pennsylvania

Effective delivery of services for the public good involves a multiplicity of organizations and actors, including those from the public, nonprofit, and private sectors. In some cases, service delivery is accomplished using programs that directly engage volunteers, including key public services like community-based and nonprofit volunteer fire departments. Volunteers in fire departments—often highly engaged volunteers with specialized training—provide vital services for a substantial portion of the United States, allowing local governments to realize considerable cost savings. Thus, issues of volunteer retention are a critical challenge for fire departments. Existing research has addressed issues of retention in a variety of settings; we argue that the challenging and particular context of fire departments is worthy of focused research. This article is an exploratory study of the predictors of voluntary firefighter retention in the Commonwealth of Pennsylvania. We use data from a web-based survey of volunteer firefighters to examine the factors that influence volunteer retention, focusing specifically on volunteer management practices and broader job-related concepts. Results indicate that volunteer training, performance management, job satisfaction, and organizational commitment influence both short- and mid-term intent to remain, indicating that management practices and programs, as well as other contextual factors that shape satisfaction and commitment, are important in retaining volunteers.     

Liability and volunteer organizations: A survey of the law

The question of how and when liability attaches is one of the most important issues facing volunteer organizations today. The liability issue has three related components: (1) whether the organization is liable to third parties for acts performed by volunteers, (2) whether the organization is liable to volunteers who are injured while performing their duties, and (3) whether an individual volunteer is liable for acts performed while working with a volunteer organization. This article explores each of these issues and suggests effective risk management practices that can reduce, although not eliminate, liability in most instances.