Five dimensions of effectiveness for nonprofit annual reports

Annual reports are an important communication device through which nonprofit entities can satisfy their duty to be accountable to donors and the public at large. The primary objective of this article is to identify best practices for annual reports based on five dimensions: completeness, accessibility, transparency, full disclosure, and relevance. This article reports on both the financial and nonfinancial content in voluntarily provided annual reports. Based on our survey, we include recommendations and examples to help nonprofit leaders improve communication with stakeholders. While many of the recommendations can be adopted at little or no additional cost, achieving the most important criterion, relevance, will require nonprofit leaders to substantially improve their reporting of organizational goals and accomplishments.     

Ethical dimensions in trauma research

This article examines the methodological and ethical challenges in studying trauma caused by sexual abuse, poverty, homophobia, and racism. I propose that the challenges of studying trauma add nuance to perennial methodological questions about insider-outsider relations, research techniques, and the possible impact of research on social change. By drawing on a multiracial study I conducted that examined African American, Latina, and white women’s methods of coping with trauma, I trace how issues of identification and overidentification, boundary maintenance, narrative structures, and transference raise new ethical and methodological issues for researchers. I suggest that the longstanding sociological concern with oppression and injustice, and the trauma they often cause, requires continued exploration about why and how questions of ethics and methods are intertwined in trauma research. She is the author ofA Hunger So Wide and So Deep: American Women Speak Out on Eating Problems (U. of Minnesota Press, 1994) and co-editor (with Sangeeta Tyagi) ofBeyond A Dream Deferred: Multicultural Education and the Politics of Excellence (U. of Minnesota Press, 1993) andNames We Call Home: Autobiography on Racial Identity (Routledge, 1995).     

Self-assessment by nonprofit boards

Can nonprofit boards conduct accurate and trustworthy evaluations of their own performance? Factors that limit trustee self-assessments include problems with available instruments as well as with trustees' critical abilities. Drawing upon previous research that identified six dimensions of board competencies, the author developed and field-tested a new instrument for use in board self-assessments. Information on the reliability and validity of this approach is presented, and implications are drawn for board efforts to monitor and appraise their performance.     

The DIRECTIONS nonprofit resource assessment model: A tool for small nonprofit organizations

Rapid growth in the number of nonprofits has created a shortage of trained staff and experienced volunteer leadership for nonprofit organizations. The Nonprofit Education Initiative (NEI) in South Carolina developed the DIRECTIONS nonprofit resource assessment model to provide tools to help nonprofits better meet the challenges facing our communities—tools that will help nonprofits develop effective plans, integrate resources, diversify revenue, communicate effective messages, and motivate constituents. These tools are also inexpensive and available close to home. The research and development process was a cooperative effort between the Department of Parks, Recreation, and Tourism Management and Clemson University Cooperative Extension Service, with funding from the W. K. Kellogg Foundation. Cooperative Extension is a component of the land grant university system, the largest educational delivery system in the world. Cooperative Extension's role is to plan, execute, deliver, and evaluate learning programs consistent with locally identified needs. It helps people acquire the understanding, capabilities, attitudes, and skills essential to solving farm, home, and community problems. This article gives a background of the challenges facing nonprofit organizations in South Carolina, the steps taken to develop this new assessment model, and results of research conducted throughout the development process.     

Succession planning in nonprofit organizations

Executive leadership is a critical component in the success of nonprofit organizations. An upcoming period of leadership transition is anticipated as substantial numbers of baby boomers, now at the peak of their careers, reach retirement age. With nonprofit organizations growing in both size and number, an impending leadership deficit is a concern. To help prepare for these important transition events, this study focuses on planning for executive succession. A survey exploring details of succession planning was undertaken of executive directors of 501(c)(3) charitable nonprofits and CEOs of 501(c)(4) cooperative organizations—the more business‐oriented user‐owned and controlled nonprofit organizations prominent in agricultural, utility, and finance sectors. We found that planning and preparation do not match the level of interest and concern for executive succession. Although the replacement of long‐serving leaders is acknowledged as difficult, few proactive steps are undertaken.     

Lessons for successful nonprofit governance

Boards of nonprofit organizations malfunction as often as they function effectively. As the best-managed nonprofit organizations demonstrate, both the board and the executive are essential to the proper functioning of a nonprofit organization. These administrative organs must work as equal members of a team rather than one subordinate to the other. Moreover, the work of the executive and the board does not divide neatly into policy-making versus execution of policy. Boards and executives must be involved in both functions and must coordinate their work accordingly. In a well-functioning nonprofit organization, the executive will take responsibility for assuring that the governance function is properly organized and maintained.     

Adapting surveys for nonprofit research

Many useful survey instruments have been developed in the for‐profit management arena, but they often require varying levels of adaptation for relevant application in the nonprofit context. This research note first explains key steps in the process for adapting and testing a survey instrument. It then illustrates how each step should be applied and reported using a case study adaptation of Hodgkinson's (1992) strategic locus of control instrument for nonprofit use.     

Enhancing nonprofit resources through barter

This article discusses the objectives and formats that countertrade (barter) assumes as a means of expanding the financial and other resources of nonprofit institutions. Examples of the different types of agreements practiced by various types of institutions indicate the pervasiveness of the practice. The author calls for greater levels of institutional commitment to the proactive seeking and consummating of countertrade agreements.     

Incentive-based management for nonprofit organizations

Nonprofit organizations should consider using incentive-based management programs so long as such programs are studied thoughtfully, implemented carefully, and closely tied to other important management practices. The article describes the experiences of one nonprofit organization, Citizens' Scholarship Foundation of America (CSFA), in successfully conducting a staff incentive program during the past several years. The author also reports briefly on the results of a recent survey among CSFA staff involved in the incentive plan, outlining the benefits of such a program in helping the organization to reach its objectives. Finally, the author addresses potential pitfalls to avoid in implementing an effective staff incentive program.     

Social capital and nonprofit leaders

The concept of social capital seems to be a very compatible, useful, and important one for nonprofit organizations. Nonprofits must sustain and enhance the original social capital with which they were formed and broaden it into a variety of key areas. Nonprofits and their leaders must foster social capital in order to recruit and develop board members, raise philanthropic support, develop strategic partnerships, engage in advocacy, enhance community relations, and create a shared strategic vision and mission within the organization and its employees. Nonprofit executives have a pivotal role in carrying out these functions, but they do so through relationships and networks with others. These activities are time‐consuming and demanding, and they require planning. This article provides a focused literature analysis on the concept of social capital as it applies to nonprofit management and leadership. The author views the literature with respect to definitions of social capital and the way nonprofits generate and mobilize social capital in order to achieve organizational goals. The author also cites methods for measuring social capital.     

Competing nonprofit organizations also collaborate

Cooperation among voluntary organizations is examined from the perspective of an Israeli project in which local voluntary organizations formed a joint forum. An analysis of questionnaires filled in by members of nine such bodies (“roundtables”) shows that cooperation among voluntary organizations may be functional in nature and not necessarily based on common goals. The degree of independence of the organizations did not affect their cooperation, but it influenced the way they looked on the “convenor” (external change agent), who played an important role in the process of interorganizational cooperation. The authors show that competition and cooperation are not mutually exclusive among voluntary organizations.     

Developmental contexts of nonprofit management education

The 1980s and 1990s saw the beginning and rapid growth of nonprofit management education. Literature on this topic has focused principally on directly practical concerns such as rationale, curriculum, faculty, students, funding, alumni, and employer satisfaction and the best place for such programs within universities. Broadening that discussion, this article clarifies why nonprofit management education took the form it did and happened when it did by setting it within three contexts: professional education, management education, and the post–World War II growth of the nonprofit sector.     

The anticipated growth of nonprofit unionism

Although unions are not typically associated with nonprofit organizations, many nonprofit agencies have unionized work forces. The author predicts that there will be an increase in the number of unions representing nonprofit employees. Parallels are drawn between the evolution of unions in the public and nonprofit sectors.     

Risk and diversification of nonprofit revenue portfolios: Applying modern portfolio theory to nonprofit revenue management

This study uses modern portfolio theory (MPT) to estimate the risk of nonprofit revenue portfolios and examines to what degree the revenue concentration measure based on Herfindahl–Hirschman Index is associated with the portfolio risk measure based on MPT. The findings suggest that nonprofits with greater revenue concentration have lower revenue portfolio risk in the whole sample analysis. However, it is plausible that this result is dominated by organizations reliant on commercial income, which comprise over half of the sample. In fact, when examined separately, the relationship varies by an organization's primary funding structure. While higher revenue concentration is positively associated with portfolio risk for organizations relying on donations or those without a consistent primary funding source, it appears to associate with a lower portfolio risk for commercial organizations and those relying on government grants. This study reflects on the concept of diversification derived from portfolio theory and calls attention to a more nuanced approach to nonprofit revenue strategy.     

Culture and change in nonprofit boards

The actions of boards, like all organizational behaviors, emerge from board culture, which is composed of members' customary practices, shared beliefs, and assumptions about reality. It is a board's culture that enables its participants to deal with ambiguity and complexity by providing familiar meanings and solutions to problems. Board development efforts that do not take these factors directly into account are likely to produce only superficial and short-term changes. This article presents alternative approaches to board development, using two levels of learning drawn from examinations of board cultures.