The first three years of NML: Central issues in the management of nonprofit organizations

The articles published in the first three years of NML define a broad spectrum of management challenges and problems for future research. These issues fall into five broad categories: governance, executive leadership, human resources management, development of financial resources, and strategic adaptation to change. This article summarizes the contributions of NML authors and suggests areas where new research would advance understanding and practice of nonprofit management and leadership.     

The political dimension of effective nonprofit executive leadership

Recent research by the authors adds to their evolving model of the leadership provided by effective chief executive officers of nonprofit organizations. Effective chief executives understand the centrality of their leadership role and accept responsibility as initiators of action—with their boards—to find resources and revitalize the missions of their organizations. These actions are carried out as part of the political dimension of effective executives. The importance of this criterion of leadership practice is examined in light of the hesitance of chief executives to espouse or advocate political action. Implications for chief executive training and development are discussed.     

Culture and human resources management: Selecting leadership in a nonprofit organization

This article examines the influence of culture in a nonprofit organization on a major human resources management decision: the selection of a new leader. Specifically, this article investigates the recent selection of the national executive vice president (known as EVP, the highest-ranking, paid staff member) in the American Cancer Society and details how three particular aspects of the culture influenced the structure, process, and outcome of the selection decision.     

Pursuit of mission: The rise and fall of elite nonprofit leadership

The University Circle Development Foundation (UCDF) was created in 1957 to implement a master plan for the development of Cleveland's University Circle district. Run by the presidents of three major institutions, UCDF was successful in coordinating land use and construction projects in its early years. However, its elite authority structure proved insular and inflexible when dealing with students, faculty, and adjacent neighborhoods, and it was dissolved in 1970.     

The nonprofit leadership deficit: A case for more optimism

Recent headlines claim that a looming nonprofit leadership crisis will soon be precipitated by retiring baby boomers. Analysis of baby boom demographics, using national census data on the age distribution and other demographic characteristics of top leaders by sector, confirms the aging nonprofit workforce. However, the issue of whether the aging workforce portends a nonprofit leadership crisis, when analyzed within a theoretical framework of supply and demand in the market for nonprofit executives, reveals flaws in most commentaries about the leadership crisis. Workings of the labor market and nonprofit organizations themselves suggest trends that could be expected to affect labor supply and demand and mitigate a leadership deficit. Reasonable—and likely—market and organizational adjustments, including higher executive pay, increased labor force participation of older workers, skill acquisition of younger workers, possible consolidation of nonprofit organizations, board and volunteer skill sharing, and even venture philanthropy, can be expected to moderate the shock of baby boom retirements, much in the way that schools, job markets, and housing markets have accommodated the movement of this “bulging” generation through earlier decades of their lives.     

The economics of performance management in nonprofit organizations

This article analyzes whether and how private‐sector notions of performance management apply to nonprofit organizations. To this end the author shows that each concept of performance management used in the private sector is based on a specific economic theory of the firm and its environment. Before transferring concepts and tools derived from a certain model of the firm and its environment to nonprofit organizations, one must determine whether the assumptions underlying this model are also adequate for nonprofit organizations. Otherwise, one must first adjust those assumptions and analyze whether the derived concepts and tools are still meaningful in the new context; if not, one must determine how to modify them accordingly. The analysis elaborates on the differences between for‐profit and nonprofit organizations that are important for applying performance management concepts. Moreover, the author discusses the practical implications for the use of balanced scorecards in nonprofits.     

The trickle‐down effect of ethical leadership in nonprofit soccer clubs

Nonprofit soccer clubs are currently facing many ethical challenges, such as abuse, doping and match fixing. While research suggests that organizational (board) ethical leadership may be effective to tackle these ethical issues, empirical support in the context of sport remains limited. Drawing on the perceptions of a sample of nonprofit soccer players (n = 438) and coaches (n = 106), we indicate that the coaches play an important mediating role regarding the associations between board ethical leadership and ethical climate. The theoretical underpinnings of ethical leadership—formed by social learning theory and social exchange theory—and the social distance between the board and the players in nonprofit soccer clubs provide support in this regard. In sum, our results demonstrate that the influence of board ethical leadership in nonprofit soccer clubs partly trickles down to the players via coach ethical leadership. Finally, practical implications for nonprofit soccer club management are discussed.     

Inclusion and commitment as key pathways between leadership and nonprofit performance

Given the projected growth of workforce diversity in the United States and the fact that heterogeneous workforces result in both positive (increased retention and performance) and negative (increased conflict and turnover) organizational outcomes, nonprofit leaders are faced with the challenge of effectively managing their workforces. Findings ways to ensure positive workplace outcomes, such as employee commitment (an emotional attachment to the organization) and performance, is especially critical for the overall functioning of nonprofit organizations. Using longitudinal multilevel path analyses, this study examined whether transformational leadership influenced work group performance through both creating a climate for inclusion and increasing employee affective commitment in a diverse nonprofit health care organization. Results indicate that transformational leaders help increase perceptions of inclusion, which improves employee commitment to the organization, and ultimately enhances perceived work group performance. This suggests inclusion and affective commitment as key factors for how leaders can increase nonprofit performance.     

Transformational leadership,organizational culture,and innovativeness in nonprofit organizations

This is an exploratory study of leadership, organizational culture, and organizational innovativeness in a sample of nonprofit human service organizations: Associations of Retarded Citizens. Although leadership has been held out as one of the most important predictors of innovation, this study found it was not correlated with organizational innovativeness. Examination of the relationships between leadership and cultural variables provided some alternative explanations for this finding. Positive relationships among transformational leadership, organizational values, and cultural consensus (degree of agreement among employees on those values) indicate that leadership practices employed in this sample created strong cultural consensus around values that may inhibit innovation. These findings suggest that examining the link between leadership and organizational culture is important for understanding how leadership and innovation are related. This article sets out practical implications, based on the results of the study, that may help nonprofit managers create workplaces supportive of innovation.     

Jane addams and hull house: Historical lessons on nonprofit leadership

Jane Addams, founder and head of Hull House, a social settlement in Chicago at the turn of the century, offers an intriguing model of a nonhierarchical, value-oriented manager and leader. As the head resident of a group of some twenty volunteer residents—the staff of the settlement—Addams created an organizational culture and structure that encouraged individual initiative and self-governance. Addams herself taught by example the value of tolerance and the meaning of social democracy, the moral goals whose attainment she sought.     

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.     

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.     

What's new in nonprofit management?

Managing the Nonprofit Organization: Principles and Practices, by Peter F. Drucker. New York: HarperCollins, 1990. 235 pp., $22.95 cloth. Changing Hats: from Social Work Practice to Administration, by Felice Davidson Perlmutter. Silver Springs, Md.: National Association of social Workers Press, 1990. 160 pp., $12.95 paper. Managing Voluntary and Non-Profit Organizations: Strategy and Structure, by Richard J. Butler and David C. Wilson. London: Routledge, 1990. 190 pp., $55.00 cloth.     

On a career in nonprofit management

Careers for Dreamers and Doers: A Guide to Management Careers in the Nonprofit Sector, edited by Lilly Cohen and Dennis R. Young. New York: Foundation Center, 1989, $24.95 paper. Doing Well by Doing Good: The First Complete Guide to Careers in the Nonprofit Sector, by Terry W. McAdam. New York: Penguin Books, 1988. $6.95 paper.     

Coping by nonprofit organizations during the Reagan years

Contrary to expectations that a divested federal role would lead to the demise of nonprofit agencies, the relationship between nonprofit and government sectors in New York at the end of the 1980s was stronger than ever. This article presents longitudinal data for six nonprofit agencies in Rochester, New York, to demonstrate "management by groping along" during the Reagan years, behavior that resulted in increased reliance on state and local governments for funds and programs and in different ways of doing business.     

Exploring a model of servant leadership,empowerment, and commitment in nonprofit organizations

This study examined a model of servant leadership's relationship to organizational commitment through structural and psychological empowerment, focusing on leader–follower dyads in a nonprofit organization. Survey data was collected from 128 employees of a nonprofit organization in a northeastern U.S. city. After model re‐specification, a well‐fitting model emerged, indicating that structural empowerment mediates the relationship between servant leadership and organizational commitment. Moreover, the model suggests that structural empowerment's effect on organizational commitment is both direct and indirect—the latter occurring through the meaning dimension of psychological empowerment. This study provides initial support for structural empowerment being a mechanism through which servant leadership impacts organizational commitment in nonprofits. In addition, the role of meaningful work is highlighted as an antecedent to organizational commitment for nonprofit employees. Servant leaders are suggested to create structurally empowering working environments, which support employees' stronger commitment to the organization.     

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.