Leadership succession and the emergence of an organizational identity threat

Leadership succession, and the associated changes that new leaders make, can have profound impacts on nonprofit organizations. Despite its importance, there is limited research that examines succession from the point of view of employees and considers how their interpretations of organizational identity and proposed change shape their responses to leadership transitions. In this article, we examine the dynamics that ensued when the founder of Friends of the Earth, a nonprofit environmental organization, stepped down. The case shows how the succession process can expose latent disagreement about an organization's identity and give rise to internal conflict. These patterns suggest that leaders must be attentive to different and often conflicting interpretations of an organization's identity.     

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.     

Fraud survival in nonprofit organizations: Empirical evidence

This study examines the survival of nonprofit organizations after the discovery of a fraud. Literature on nonprofit fraud claims that fraud has a destructive impact on nonprofit organizations. This study is the first to provide empirical evidence of the impact of fraud on a nonprofit organization's survival, and to analyze the significance of underlying organizational and fraud factors. An analysis of 115 nonprofit organizations experiencing a fraud shows that over one fourth of these organizations did not survive at least 3 years beyond the publication of the fraud, a rate considerably higher than the typical nonprofit failure rate. This article investigates the characteristics of surviving organizations and finds that older and larger organizations are more likely to survive, indicating the liabilities of newness and smallness hold in fraud survival situations. In cases where an executive‐level perpetrator committed the fraud, or where the organization victimized the public, the organization was less likely to survive. These findings suggest nonprofit organizations, particularly those that are new or small, could benefit by implementing governance policies and procedures that are consistent with those employed by more established organizations.     

Organic and sustainable

The terrorist attacks of September 11, 2001, spawned 252 new nonprofit organizations. We know little about these organizations, including how they emerged, formalized, met constituents' expectations for immediate performance, and ultimately survived. This article explores these issues through a case study of one successful organization, the Windows of Hope Family Relief Fund. Using concepts from disaster, organizational ecology, and entrepreneurship research, the analysis identifies six propositions that link these literatures, notably the role of resource acquisition in formalization and the role of legitimacy in both fund development and organizational endurance. The study contributes new knowledge about the role of collaboration in acquiring capacity to enhance responsiveness. The findings suggest potential parallels to the evolution of new nonprofit organizations in other contexts.     

External Perception Matters: The Phenomenon of Identity Coupling in Interorganizational Relations

This qualitative study investigates interorganizational relations (IORs) via 16 nonprofit organizations serving Chinese Canadians in Canada. This study reveals how potential partnering organizations perceive each other’s organizational identities that influence the formation and outcomes of IORs. An organizational ecological perspective of organizational identity is adopted. The study finds that value-based and resource-based organizational identity coupling of potential partnering organizations can facilitate the respective forms of IORs. The facilitating effect of Identity coupling is weakened in the presence of a third party with resource. The study demonstrates the utility of the orgnization ecology’s organizational identity literature and contributes to our understanding of value-based IORs.     

Organizational sensegiving: Indicators and nonprofit signaling

Resource acquisition depends upon the agreement between an organization's sense of identity and the perceptions of organizational identity held by resource providers. To smooth the flow of resources and buffer against potential issues, organizations seek to manage external perceptions and, to the extent possible, control their organizational identity. Using exploratory factor analysis, we examine the data from 300 GuideStar profiles to develop a sense of how nonprofit organizations “give sense” to resource providers and attempt to manage their organizational identity. We find evidence of three sensegiving strategies. We then use a seemingly unrelated regression model to examine the relationship between these strategies and revenue outcomes, finding evidence that (a) nonprofit organizations demonstrate intentional sensegiving, and (b) different sensegiving approaches are related to different income streams.     

A Review of Models for Measuring Organizational Effectiveness Among For‐Profit and Nonprofit Organizations

Induced by unprecedented growth, invasion of for‐profit organizations in the nonprofit domain, and high‐profile cases of mismanagement in the nonprofit sector, a recent surge in the literature suggests ample opportunities for research to compare the organizational effectiveness of for‐profit and nonprofit organizations. This article presents a literature review of nonprofit organizational effectiveness from which four models of organizational effectiveness are selected. These models are discussed and analyzed because they apply to both for‐profit and nonprofit organizations.     

Organizational Crisis Resistance: Examining Leadership Mental Models of Necessary Practices to Resist Crises and the Role of Organizational Context

This study explores which governance practices nonprofit leaders consider necessary to avoid organizational crises. Further, it explores whether these leadership mental models of crisis resistance depend on the organizational context. This helps determine whether practical learning points are organization specific or can be applied broadly. With a multilevel sample of 304 leaders from 44 Belgian nongovernmental development organizations, an exploratory path analysis reveals that nonprofit leaders consider continuous improvement, as a governance practice, particularly relevant for effective organizational crisis resistance. A multilevel analysis also shows that variations in leadership mental models cannot be explained by the organizational variables used in this study (organizational size, leadership group size, operational activities, and languages in the leadership group). This article concludes with a discussion of consequences for further research.     

The Social-Entrepreneurship Advantage: An Experimental Study of Social Entrepreneurship and Perceptions of Nonprofit Effectiveness

A common assertion in the nonprofit literature is that nonprofit organizations can become more efficient, effective, and sustainable by embracing social entrepreneurship in their operational and strategic posture. In this article, we examine whether the mere label of social entrepreneurship results—with no actual organizational differences—in an increase in positive attributions associated with a nonprofit organization, an effect we call the social entrepreneurship bias. We experimentally test for the existence of a social entrepreneurship bias by examining how the label of social entrepreneurship alters how people judge a nonprofit’s effectiveness and decide how to allocate scarce donation funds.

     

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.     

The Relationship between Provision of Membership Benefits and Fulfillment of Representational Roles in Nonprofit Advocacy Membership Organizations

This article explores the ways nonprofit advocacy membership organizations can manage their resource dependence on members and fulfill the organizations' representational roles, focusing on the provision of membership benefits. Membership organizations rely on financial or other resources from members and thus are constrained by them. For a nonprofit that aims to primarily speak for members, constraints by members may help to focus organizational attention on members' interests. Contrarily, for a nonprofit that aims to mainly represent broader constituents, members' constraints may hamper an organization's ability to advocate for broader constituents because members do not necessarily share the same policy goals with broader constituents. The provision of membership benefits can be a useful strategy for organizations to fulfill their representational roles and to satisfy and engage members, because people often join an organization to enjoy certain membership benefits. For an empirical analysis, this study collected a large‐scale data set through web and mail surveys of nonprofit advocacy organizations across the United States. The mixed‐mode surveys achieved a 57.5 percent response rate (729 responses). The survey and regression analysis results show that member‐serving nonprofits providing members with opportunities to participate in advocacy work are more likely to represent members' interests directly. Although broader constituency‐serving nonprofits tend to prioritize members' opinions, these organizations are more likely to adhere to the mandates of broader constituents when providing selective material membership benefits. However, when providing purposive membership benefits, these nonprofits are more likely to represent members' opinions.     

Social Justice Approach to Community Development

This article presents a case study examining nonprofit board and director roles in the first 5 years of an organization’s life, using 3 organizational change approaches: contingency, life-cycle, and cognitive-interpretive. Data include monthly board meeting minutes and director’s reports for the first 5 years of a nonprofit human service agency’s existence. The article concludes that although all 3 theoretical approaches are productive explanatory frameworks for organizational change, each one, on its own, is incomplete. The findings point to the need for further theoretical synthesis and paradigm elaboration to inform our understanding of nonprofit director and board relationships.     

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.     

Pathways to sector selection: A conceptual framework for social enterprises

As hybrid organizations with financial and social objectives, social enterprises must balance competing logics for governance, stakeholders, and outcomes when considering organizational design and structure. The existing legal landscape for organizations exacerbates this dilemma by forcing social enterprises to incorporate as either a nonprofit or for‐profit organization. This research examines the entity formation process for social enterprises by presenting sector choice as an interaction among four factors: equity financing, organizational lineage, human capital, and funding environment. Using a qualitative comparative case analysis, this research demonstrates that contingent factors drive sector choice when legal incentives and institutional pressures are unclear. For those choosing nonprofit forms, the status of the parent organization—the organizational lineage—is determinative. For those operating in the for‐profit context, human capital is predictive. The resulting conceptual framework contributes to existing organizational theory on hybrid organizations by presenting the sector selection process as independent of the motives or legal incentives typically associated with sector choice. This research concludes with a discussion on the advantages of delaying the formal sector declaration process.     

Ethical dimensions of nonprofit administration

This article explains why ethics is a necessary and powerful aspect of organizational life and why the managerial ethics of executive responsibility is arguably the most important part of management. While ethical considerations in management are largely the same regardless of organizational type, there are some unique characteristics of nonprofit organizations that create a special ethical context for the nonprofit administrative role. This uniqueness, the immensity and organizational complexity of the American nonprofit sector, and the importance of ethical considerations in an increasingly amoral society, are grounds for giving more attention to this topic.     

The effectiveness of nonprofit lead‐organization networks for social service delivery

Public agencies increasingly contract with nonprofit organizations to lead community‐based networks for social service delivery. We explore the role that partnership characteristics play in the effectiveness of these networks. Using data on children and family services in Los Angeles County, we consider the impact of both the motivations for forming partnerships and the nature of the resulting partnerships on perceived outcomes for clients, interorganizational relationships, and organizational learning. We find that client outcomes and interorganizational relationships are enhanced when partnerships are formed to meet certain programmatic and organizational goals. Organizational learning, however, is affected only when partnerships are formed to enhance organizational legitimacy. Partners selected because they share common vision increase effectiveness, while those selected because there are few alternative partners decrease effectiveness. Finally, when partnerships use an interorganizational coordination mechanism, client outcomes are improved. The managerial implications of these impacts for the nonprofit sector are developed. The results lend considerable support to the role of partnership motivation and partner selection in the effectiveness of nonprofit lead‐organization networks, and specificity about the nature of that role.     

Nonprofit Lobbying Strategy: Challenging or Championing the Conventional Wisdom?

Research on nonprofit lobbying conceives of strategy in various ways. This article presents a more comprehensive view encompassing four components: lobbying motivation (lobbying for organizational or self-interest as well as for societal benefit), concentration (lobbying in a narrow versus wide range of policy domains), type (lobbying policymakers directly or indirectly), and target (lobbying different levels of government). Based on the analysis of the population of nonprofit organizations that registered to lobby in the State of North Carolina in 2010 (N = 402), findings demonstrate the complexity and distinctiveness of nonprofit lobbying strategies: Most nonprofits register to lobby for organizational and societal benefit, in multiple policy domains, directly and indirectly, and at several levels of government. The article discusses the findings and their implications and suggests a research agenda on nonprofit lobbying strategy that would incorporate the roots of these strategic choices.     

Leadership in faith‐based nonprofits

This case study illustrates the unique challenges of leading a faith‐based nonprofit organization within a multifaith constituency in Asia. The core themes of the case are based on research conducted with the staff, executive team, and board members of an international faith‐based nonprofit organization in Asia. Specifically, the case focuses on three identity‐based leadership dilemmas in relation to (1) creating a shared sense of organizational identity, (2) talent management, and (3) board governance. By describing the challenges faced by the CEO, the case shows how a strong faith‐based identification can positively bind an organization together, but also result in organizational blind spots with unintended consequences.     

Casa de Esperanza [Part B]

When nonprofit organizations make significant changes in mission, there are many issues of organizational structure and culture that must be re‐examined and re‐aligned. As the second segment in the case of Casa de Esperanza illustrates, there are many human issues that must be navigated by leaders making such changes. Case B illustrates the challenges that must be confronted as leaders embrace the agency's identity as a community‐based Latina organization, rather than a government‐funded domestic violence organization. The case describes the management planning and implementation processes, including changes in leadership, programming, and operations. Staff responses to these changes are also stressed, revealing the very human elements of organizational change. © 2004 Jodi Sandfort     

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.