Performance evaluations of for‐profit and nonprofit U.S. hospitals since 1980

This synthesis of studies examines whether the published literature shows an evidence‐based consensus on performance differences between private for‐profit and nonprofit hospitals in the United States since 1980. The author systematically and comprehensively surveyed peer‐reviewed publications to clarify this question. The author's second objective was to learn what proportion of all research assessing for‐profit and nonprofit health care providers is devoted to hospitals compared to all other providers. The third goal was to discover how any trends in observed performance differences among hospitals compare with trends among other provider types. Computerized bibliographic searches of all relevant databases yielded seventy‐five studies (ninety‐three assessments) that compared the performance of for‐profit and nonprofit hospitals on four performance criteria: access, quality, cost or efficiency, and amount of charity care. The author coded findings on performance in one of three ways: for‐profit superiority, nonprofit superiority, or inconclusive. Most studies (60 percent) reported that nonprofit hospitals have better relative performance than for‐profit hospitals, clear evidence of their organizational effectiveness. Thirty‐one percent were inconclusive, and 8 percent reported that for‐profits were better.     

Doing Better While Doing Good: Motivational Aspects of Pay-for-Performance Effectiveness in Nonprofit Organizations

Management practices in the nonprofit sector have been changing over the last decade. Many nonprofit organizations are now mimicking the management techniques of for-profit organizations. Referring to prevailing economic, psychological, and management theories, this paper deals with pay-for-performance plans and specifies reasons for their introduction into nonprofit organizations. The determinants of pay-for-performance effectiveness are analyzed with special emphasis on the motivational determinants. The results of the analysis are incorporated into a model of pay-for-performance effectiveness. Referring to theoretical reasoning as well as empirical studies, this paper analyzes how the motivational determinants of pay-for-performance effectiveness are coined in different types of nonprofit organizations. The paper ends with a discussion in which the author presents an alternative explanation for the introduction of pay-for-performance plans into nonprofit organizations and some suggestions for future research.     

Advances in Research on Nonprofit Advocacy and Civic Engagement

Nonprofits are collective endeavors that supply a bewildering range of products and services, including some of value to their immediate members only. Many also advocate policy positions on issues of direct interest to themselves, their clients and beneficiaries, and/or the broader community. There is substantial variation in their advocacy strategies, the scope of policy goals they embrace, and the types of individuals they engage in such activities. Consequently, there are also differences in whether and how nonprofit advocacy activities reduce inequalities, enhance civic participation, and promote deliberative democracy. This symposium interprets and theorizes about emerging nonprofit challenges by showcasing research of nonprofit advocacy and civic engagement scholars. Collectively, the papers demonstrate the vibrancy of the field of nonprofit civic engagement and advocacy and identify important areas for future research to capture the complexity of nonprofits as actors guided by both instrumental and normative goals, serving organizational and social missions, and reducing some types of inequalities but creating new ones.     

Agency Problems between Managers and Employees in Nonprofit Organizations: A Discrete Choice Experiment

Most principal–agent literature of nonprofit organizations has focused on the relationship between board members and managers. However, in addition to the role as an agent of the board, the manager also performs a role as principal with respect to the nonprofit employees. By using a discrete choice experiment, we identify the objectives of managers and employees in nonprofit organizations and assess the presence of agency problems in this relationship. Our sample consists of 76 headmasters, 161 teachers, and 39 administrative employees in 74 secondary nonprofit schools in Belgium. We find that the six objectives set out in the experiment play an important role for both headmasters and subordinate staff. However, the results also indicate that some of these objectives are significantly more important for the headmasters. In sum, our results suggest that agency theory and stewardship theory are not necessarily in conflict with each other but can be combined into a more general governance framework for nonprofit organizations. Consequently, we argue that incentive structures that incorporate different types of objectives can facilitate the recruitment and retention of employees in nonprofit organizations.     

The financial information that nonprofit trustees need and how they can get it

With one exception, the accounting principles governing the information reported on the financial statements of nonprofit organizations should be the same as those for business organizations, and trustees should use this information to decide on budgets and analyze actual performance in essentially the same way as do business boards of directors. The exception is that nonprofit organizations receive capital contributions, which are rare in business corporations. In some nonprofit organizations, especially colleges, the information that trustees actually receive is confusing because of the unnecessary use of fund accounting and other peculiarities. Nevertheless, trustees can insist on businesslike financial statements.     

Toward the Importance of Nonprofit Brand Equity

Various brand evaluation approaches assess the value and equity of for‐profit brands; accordant approaches for nonprofit brands, however, have been limited, and there is disagreement on what makes up a strong brand in the nonprofit sector. In response, this article provides insights into the conceptualization and operationalization of stakeholder‐based nonprofit brand equity and derives an initial measurement index. We conceptualize nonprofit brand equity as having three dimensions—nonprofit brand awareness, nonprofit brand trust, and nonprofit brand commitment—thereby empirically investigating trust in nonprofit brand equity building for the first time. The methodological procedure for building the index is based on partial least squares path modeling, and we draw on a sample of forty brands (N = 3,617 brand evaluations) identified as some of the best‐known nonprofit brands in Germany. Applying the index yields some of the strongest German nonprofit brands; for example, German Red Cross has by far the highest value of brand equity, followed by Aktion Mensch and UNICEF. The nonprofit brand equity index provides the basis for nonprofit managers to compare their brands’ performance over time and develop accordant branding strategies; it can be also used by organizations from other countries.     

A Model of Strategic Nonprofit Human Resource Management

This article presents a model of strategic nonprofit human resource management (SNHRM) that draws from resource-based view and resource dependence theory, to explain the determinants of strategic human resources management (SHRM) in nonprofit organizations. Three guiding principles, strategy types and propositions are presented to explain the complex interactions and processes in the SNHRM system. The article lays a foundation for future research and offers managers a framework for SHRM planning and implementation in nonprofit organizations.     

Examining the influence of organizational characteristics on nonprofit commercialization

A growing body of literature discusses the (dis)advantages of nonprofit organizations becoming commercial by engaging in the sale of organizational services and products. However, when explaining this phenomenon, scholars tend to focus on resource uncertainty, thereby disregarding the organizational ability to commercialize. Complementing resource dependency theory with insights from contingency theory, this study presents arguments drawn from a comparative case study of six sociocultural nonprofits in Belgium. We find that, when resource uncertainty is similar, organizational differences in terms of commercial income can be explained by differences in (a) organizational origins, (b) professional capacity, and (c) types of tasks. We conclude that organizational characteristics can either enable or disable the ability of nonprofits to commercialize and consequently their ability to self‐sustain in an increasing challenging resource environment.     

Evaluating Public Charity Websites

In this study, we explore nonprofit website development by applying two different types of website assessment tools to US charity websites. One instrument is theoretically based in nonprofit tendencies; the other is a commercial automated service. The results of these evaluation tools are further analyzed to determine whether the instruments are sufficiently independent for evaluation of nonprofit websites. The results illuminate differences in the assessment tools, finding them to be complementary. Each method offers different insights into website development deficiencies and avenues for improvement.     

What Accounts for the Variations in Nonprofit Growth? A Cross-National Panel Study

Previous studies of nonprofit growth have lamented the lack of cross-national longitudinal data measuring the size of the nonprofit sector across countries, which has made it difficult to assess the current state of knowledge about the nonprofit sector beyond national boundaries. Recent progress in measuring nonprofit growth using panel studies or cross-national data has compensated for the limitations of the existing research, but even the recent data are either country specific or cross sectional in nature. This study takes on the challenge of supplementing the current research by measuring nonprofit growth using internationally comparable longitudinal data. Specifically, this study focuses on whether certain key indicators of the overall state of the economy can be used to predict and explain the size of nonprofit sectors cross-nationally. The overall state of the economy has considerable relevance for nonprofit growth, as it influences the levels of government funding and private philanthropy that benefit the nonprofit sector. The results indicate that the existing theories about the nonprofit sector account for variations in nonprofit growth but are limited in their explanations of the underlying dynamics of such variations beyond national boundaries. Social origins theory is a useful addition that helps to explain cross-national variations in nonprofit growth. Importantly, the interplay among the government, private philanthropy, and the nonprofit sector is dynamic, and its effect on economic indicators varies across nonprofit regime types when sociodemographic variables are controlled.     

What affects nonprofit survival?

This article describes mortality patterns for nonprofit organizations in a major U.S. metropolitan area between 1980 and 1988. Twenty percent of the nonprofits in a panel ceased operations during this period. Mortality rates were found to vary widely. In some instances, high mortality was found in parts of the sector that were growing rapidly. Overall, nonprofits that ceased to operate were younger and smaller, used fewer strategies to attract funders, and had less diversified income streams than survivors. These patterns also varied substantially. The results point to the drawbacks of using limited or commonsense information and the necessity of theory-based research.     

Understanding how corporate social responsibility partnership factors influence nonprofit supportive intentions

Public relations literature on corporate social responsibility (CSR) has long detailed the impact of CSR outcomes for corporations. This study seeks to understand how CSR influences the nonprofit partners involved in these initiatives and what types of CSR partnerships lead to nonprofit supportive intentions. This study merges perspectives on organization-public relationships (OPR) with nonprofit management literature. An online 2 (NPO reputation: low vs high) x 2 (partnership duration: short vs. long) x 2 (CSR fit: low vs. high) experiment was conducted. A few key factors emerged in the analysis: Positive nonprofit reputation strongly predicted all OPR outcomes and mission accomplishment. Unexpectedly, the short-duration condition led to more positive outcomes and intentions. Fit did not seem to have a direct effect on outcomes, but the high-fit, short-duration partnership led to increased levels of all outcomes. For mediation, satisfaction and commitment had the strongest indirect effects on nonprofit supportive intentions (donation, volunteer, and word-of-mouth). This study expands the understanding of CSR effects on nonprofit partners, specifically by showing how different CSR partnership types play a role in the relationship-building efforts of nonprofits. Additionally, demonstrating how mission accomplishment can strengthen these relationships helps to disentangle the unique position of nonprofits in CSR, whose reputation and mission are at stake.     

Understanding the Compensation of Nonprofit Executive Directors: Examining the Influence of Performance and Organizational Characteristics

In this study we aimed to provide a better understanding of executive compensation in nonprofit organizations. We examined factors including organizational size, market, subsector, organizational type, staffing level, and organizational performance as potential influences driving variation across the nonprofit sector. The models utilize data on the population of nonprofit organizations required to file Form 990 returns with the Internal Revenue Service in order to broadly examine compensation. The results indicate associations between various measures of performance and compensation in nonprofit orga‐nizations and also suggest that different types of nonprofits may be sensitive to different measures of performance.     

Assessing Value Differences Between Leaders of Two Social Venture Types: Benefit Corporations and Nonprofit Organizations

This study considers key value differences between leaders of two types of social ventures: for-profit social benefit corporations and nonprofit organizations. The research question asks to what degree the value sets of leaders of benefit corporations are congruent with those of similarly situated individuals in nonprofit organizations. The results show the values of leaders working in benefit corporations and nonprofit organizations are in many ways aligned, but there are notable statistical differences. A sectoral association of values is also present with employees in both types of organization, especially when the previous work experience of employees is considered.     

Understanding workplace deviant behavior in nonprofit organizations

Workplace deviant behavior has traditionally been studied with respect to business or for‐profit organizations. In this article, we argue that nonprofit organizations also experience deviance, and due to their unique characteristics, they deserve special attention for extending the understanding of workplace deviant behavior to other types of organizations. Based on a review of the literature on deviance, we develop a general model of workplace deviance that we apply to nonprofit organizations. Based on the integrative conceptual framework, we advance relevant propositions for understanding and explaining deviance in nonprofit organizations.     

Nonprofit Leader Perceptions of Operating Reserves and Their Substitutes

This exploratory study has three objectives: (1) to understand the various ways academics, consultants, and practitioners conceptualize operating reserves; (2) to explore differences among academic findings, consultant recommendations, and nonprofit leader perceptions of operating reserves; and (3) to identify how practitioners operationalize operating reserves within their organizations. Using intensive interviews with nonprofit executives, we find that the operating reserve ratio (ORR) commonly used in the nonprofit literature does not accurately indicate whether an organization holds an operating reserve according to nonprofit leaders. In addition, results indicate that experienced nonprofit leaders perceive a variety of other fund types including endowment and investment savings as well as ability to borrow, other assets, sister foundations, and donor networks as legitimate substitutes for a reserve.     

The Role of the Nonprofit Sector in a Self-Governing Society: A View from the United States

This article explores the role of private, nonprofit organizations in a self-governing society. A framework identifying the diverse theories that explain the various types of nonprofit organizations observed in contemporary American society is sketched. This provides a fuller understanding of the varied and complex ways that nonprofit organizations contribute to the institutions of governance.     

The Influence of Ethical Reasoning on Leader Effectiveness

In making decisions about ethical issues for their organizations, effective nonprofit executives differ substantially from ineffective nonprofit executives according to the study reported here.     

Crisis in leadership or failure to plan?

During the past ten years, succession planning and managing executive transitions have emerged as important issues in the nonprofit sector. Demographers and economists have speculated for years about the potential effects of the retirement of baby boomers. The time has finally arrived: the oldest of the baby boomers are now eligible for retirement. The question that remains is how this trend will affect the nonprofit sector and the communities they serve. This study examines the issues of turnover and succession planning at the executive level, along with career development among young nonprofit professionals in Charlotte, North Carolina. Not only do the findings suggest that the community may very well see a crisis in leadership, but they also illustrate a growing disconnect between executive leaders and young professionals in nonprofit organizations. In addition to struggling with the realities of working in the nonprofit sector (limited benefits, challenging workloads), most young professionals reported that they felt undervalued by older managers and staff, and very few aspire to the position of executive director. Taken together, these findings have important implications for the local community and the broader nonprofit sector.     

Training Policy Governance in Nonprofit Boards of Directors: The Views of Trainer‐Consultants

Although scholars widely discuss John Carver's (1990) Policy Governance model for nonprofit organizations, they have conducted little formal research on the implementation of the model. For this study, the researchers surveyed ninety‐two trainer‐consultants who graduated from Carver's Policy Governance Academy. The goal was to learn three things from their experiences: (1) whether trainer‐consultants maintain the model as a coherent whole or teach only parts of it; (2) what they perceive as the major challenges for nonprofit boards in implementing the Policy Governance model; and (3) what contextual factors, if any, they feel affect implementation of the model across nonprofit boards with different characteristics. Survey responses indicated that (1) consultants predominantly teach the model as a whole, (2) particular policy areas appear to be problematic for nonprofit boards of directors that implement the model, and (3) two contextual factors may negatively affect the ability of a board of directors to successfully implement Policy Governance boards larger than fifteen members, and organizations with no hierarchy, where the board also functions as staff. Overall, consultants' responses indicated that they feel Policy Governance is far superior to other models, but they recognize the problems and challenges that boards face in trying to implement it.