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.     

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.     

The Investment Returns of Nonprofit Organizations,Part I

Nonprofit charities and foundations hold endowments and many other kinds of investments. How do these investments perform? Some high‐profile nonprofit endowments, including those of colleges and universities, have been studied previously. This study is the first, to our knowledge, that looks at a large number of the diverse types of nonprofits. We investigate the determinants of investment performance using a large panel data set culled from the 990 forms that nonprofits must file annually with the IRS. In this first part of our article, we discuss our approach and the challenges of using these data to infer investment returns. The IRS data, though less than perfect, yield valuable measures of the investment returns of nonprofits. They reveal that some charities consistently do better in their investment returns than do others.     

The Investment Returns of Nonprofit Organizations,Part II

We continue our examination of the investment performance of nonprofit charities and foundations. This analysis tests hypotheses about what types of organizations do better. Our motivating intuition is that nonprofits with greater focus on investment performance will secure higher returns. Our hypotheses are tested by regressing the rate of return for each organization on various characteristics. As expected, nonprofits whose primary business is predominantly financial, such as insurance providers and pension or retirement funds, consistently earn higher returns. The data also support our hypotheses that larger nonprofits, older nonprofits, and private foundations will tend to outperform. The evidence is mixed as to whether nonprofits that pay higher executive salaries or spend more on management earn higher returns.     

Resolving Accountability Ambiguity in Nonprofit Organizations

Accountability is a much studied subject in the social sciences and is known for its complexity, context dependence, and ambiguity. By conducting a comprehensive literature review and analysis across nonprofit, public, and private sector literatures, this article identifies the causes of ambiguities present in many accountability frameworks and describes the trend toward understanding accountability as a constructed concept combining both instrumental and interpretive elements. The relationship between legitimacy and accountability is considered. The authors develop a holistic accountability framework that facilitates defining and implementing accountability in complex, multi-stakeholder environments, by providing a means to operationalize commonly encountered but ambiguous accountability goals through a social process of deliberative dialogue. The authors conclude by summarizing limitations of the approach and describing future research needed.     

Stakeholder Performance Measurement in Nonprofit Organizations

According to recent findings, nonprofit organizations should address the relationships of nonprofit service quality, satisfaction, loyalty, and organizational identification when planning and evaluating donor surveys. This article presents a donor satisfaction barometer that can be used to gain insights into the strength of these key relationships and thereby establish a basis for calculated relevant indices. With such indices, nonprofit organizations can compare stakeholder performance over time and benchmark themselves against other organizations. Data from 2,599 blood donors to one section of the German Red Cross, collected through the proposed donor satisfaction barometer, show that service quality drives satisfaction, and donor satisfaction and organizational identification both exert significant positive effects on donor loyalty. Therefore, nonprofit organizations should use a combined strategic approach that improves both donor satisfaction and organizational identification to increase donor loyalty. The successful application of the donor satisfaction barometer also suggests its value for other nonprofit industries and offers important insights for managers.     

Stability and Change in Nonprofit Organizations: The Volunteer Contribution

This paper reports on a study of the microprocesses of stability and change in a nonprofit welfare organization in Australia. We position volunteering and voluntarism as core constitutive phenomena in and of nonprofit organizations and the nonprofit sector more generally, and examine volunteer agency in action. Developing a model drawn from neoinstitutional theory and adopting an ethnographic approach, the paper illustrates theoretically and empirically how volunteers create and revise institutional orders operative within organizations in ways hitherto poorly articulated and understood.     

Common Agency in Nonprofit Advocacy Organizations

Most theories of nonprofit organizations and nonprofit leadership recognize the multitude of stakeholders—including board members, donors and volunteers, funders, the media, and policy makers—that organizational leaders must contend with in doing their work. For nonprofits engaged in advocacy, demands from stakeholders may be even more challenging to meet. Although stakeholder theory recognizes the effect of various groups on an organization, it does not explain how leaders manage the preferences of their often‐competing stakeholders while they make choices for the organization. This study develops a common agency framework, evaluating the roles of three groups crucial to nonprofit advocacy organizations: the organization's board of directors, elected officials, and donors/members. The common agency framework is then illustrated with interviews with leaders of nonprofit advocacy organizations in California. Findings suggest that the leaders of these groups have a significant amount of discretion in guiding their organizations’ activities and operations.     

Structural Isomorphism in Australian Nonprofit Organizations

This paper assesses the extent of structural similarity or isomorphism among nonprofit organizations in Australia. Based on neo-institutional theory, the paper explains such isomorphism in terms of these organizations subordination and dependency, the uncertainties they face, and the networks of experts of which they are a part. The analysis uses the nonprofit component of a 2001–2002 random sample of Australian employment organizations. It finds surprisingly little isomorphism in this subsample and few differences in isomorphism according to the level of the factors thought to produce similarity. The discussion of the findings focuses on the suitability of the nonprofit sector as the appropriate organizational field within which isomorphism involving these organizations is likely to be produced. Industries, which include all organizations that produce the same product or service, be they nonprofit, for-profit, or government, may be more appropriate interactional fields for the development of isomorphism.     

Characteristics of Innovative Nonprofit Organizations in Argentina

The purpose of this study was to discover the characteristics of innovative organizations as perceived by employees of Argentine nonprofit organizations. The free listing technique, adapted from the field of cognitive anthropology, was used to achieve this task. Fifteen representatives of a variety of Argentinean nonprofit organizations participated in the study. Among the highest rated characteristics were: searching for new ways, solutions, and unconventional forms of work; adapting to new times; suggesting new forms for solving problems; and reflecting over organizational activities and actions. Rated as least characteristic were: encouraging role changes within teams; focusing on organizational mission; not being afraid of failure; and generosity (sharing information with other organizations).     

Information Technology,Adaptation and Innovation in Nonprofit Human Service Organizations

This report examines how two measures of performance—adaptation and innovation—can be predicted by the use of digital communication. It suggests that information technology in nonprofits offers strong leverage for adaptation but not for innovation. This suggests that (a) the two measures are dissimilar in both their nature and their relevance to organizational performance in nonprofit settings, (b) that service organizations are more likely to use information technology for adapting to change, and (c) it is probable that large and well-founded organizations will use IT for establishing innovations.     

The Philanthropic Consequence of Government Grants to Nonprofit Organizations

Do government grants displace or leverage private donations to nonprofit organizations? Although research on this topic is flourishing, the findings remain extremely contradictory, creating difficulty in developing a cumulative knowledge available to scholars and practitioners. This study employs a meta‐analysis to systematically synthesize the competing findings from the existing literature. Using a sample of sixty original studies with 637 effect sizes, this study finds government grants have almost no correlation with private donations. In addition, this study demonstrates, through meta‐regression, that nonprofit subsector variation, organizational age as a control, longitudinal data structure, and endogeneity correction help explain the effect size heterogeneity within and across original studies. Nonprofits should be more concerned about the capacity of competing for different funding sources rather than the tradeoff among them.     

Professionalization and Voluntary Transparency Practices in Nonprofit Organizations

There are currently no public disclosure requirements for privately controlled charitable organizations in Germany. This study examines under which conditions German nonprofits, including both public charities and foundations, voluntarily choose transparency. Transparent nonprofits are defined herein as those that publicly disclose their annual reports and detailed financial information. A very small number of German nonprofits do so. The results of a crisp‐set Qualitative Comparative Analysis suggest that the driving force behind the voluntary transparency of organizations is professional management rather than revealed cases of malpractice or stakeholder demands.     

Networking Modes and Performance in Israel's Nonprofit Organizations

The present article examines the relationship between networking modes and performance for 138 nonprofits in Israel. We draw upon the bridging and bonding concepts and social exchange theory and introduce the sharing and consulting networking modes to predict performance in terms of organizational growth in resources. We suggest that differences in networking modes (1) reflect variations in organizational size and age and (2) affect organizational growth in resources. We show that (1) the consulting networking mode is more frequent among managers of smaller and younger nonprofits, (2) sharing is characteristic of managers in older and larger nonprofits, (3) sharing has a strong effect on organizational growth, and (4) the sharing and consulting modes are better predictors of organizational performance than those of bonding and bridging. The results indicate that nonprofit growth in organizational resources is possible with networking when managers aspire to higher involvement in the networking process due to the scope and extent of goals.     

Strategic Performance Measurement and Management in Nonprofit Organizations

The managers and constituents of nonprofits are increasingly concerned about measuring and managing organizational performance. Financial measures alone, or even supplemented with a collection of ad hoc nonfinancial measures, are not sufficient to motivate and evaluate mission accomplishments. This article describes the adaptation of a new performance measurement and management approach, the Balanced Scorecard, to the nonprofit sector. Several examples of actual implementation are provided.     

Innovation,Professional Interests,and Nonprofit Organizations: The Case of Health Care in Poland

Nonprofit organizations have a role in spreading technological innovation. The experience in Poland illustrates that entrepreneurial health care professionals prefer nonprofit organizations over for-profit organizations to introduce novel services to the market because nonprofits create favorable public perceptions of those services.     

The Role of Nonprofit Advocacy Organizations in Australian Democracy and Policy Governance

Australia, like many Western liberal democracies, has experienced an unprecedented shift toward market driven policy governance in the past decade, influenced heavily by the demands of globalization but also the dominance of conservative ideas of liberal democracy and market oriented neoliberalism. In this context nonprofit advocacy organizations (NPAOs) have not only been subject to criticism and a reduction in governmental support, but have had their legitimacy challenged and questioned. This paper responds to an audible, visible, and highly contestable critique of NPAOs by exploring their contemporary place and role in Australian democracy. This discussion relies on a review of some key ideas and theories of liberal democracy and an overview of the current Australian context in which NPAOs operate, particularly in regard to their participation in policy governance. A key observation about how integral NPAOs are to ensure an active and open democracy, challenges the current directions of Australian governance and suggests a need for reflection on what actually constitutes a fully functioning democracy that fits the demands of the twenty-first century.

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.     

Dimensions of Capacity in Nonprofit Human Service Organizations

The purpose of this paper is to present and develop a firmer grasp of the underlying dimensions of organizational capacity in nonprofit human service organizations. The paper draws on the resource-based view of the organization (Barney et al. in Journal of Management 37:1299, 2011; Wernerfelt in Strategic Management Journal 5:171, 1984), which recognizes that organizational attributes and capabilities facilitate performance. Interviews were conducted with 66 executives in moderate sized, human service organizations to discuss factors that influence performance. Findings suggest that human, financial, and social capital all contribute to organizational performance. Executives emphasized the quality of people associated with the organization including the role of the board of directors in supporting performance. Many respondents also believed that maintaining healthy and dynamic external relationships was critical to success.