Contextual Factors and Negotiating Spaces: Exploring the Emergence of Nonprofit and Hybrid Voluntary Organizations

The emergence of nonprofit organizations has largely been explained by the prevalent “three failures” theory. However, evidence suggests that such theories fail to capture a variety of contextual nuances that may influence nonprofit formation. In particular, these theories have remained relatively silent about the emergence of hybrid voluntary organizations. This article posits the notion that some nonprofit organizations (for example, hybrid voluntary organizations) emerge through cross‐sector negotiations, amid a number of social, policy, and political contextual complexities. We contend that any theory purporting to explain the emergence of nonprofit organizations should not neglect to account for the role contextual factors play in defining their emergence and their subsequent character and function.     

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.     

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.     

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.     

When the management is the message: Relating values to management practice in nonprofit organizations

The values-expressive character of many private, nonprofit organizations is what distinguishes them from business and government organizations. The distinctive character of these organizations creates a special context for their management. This article examines the origins and development of private nonprofits in the religious realm and explores the implications of this character for management and for education of nonprofit managers.     

Collaboration Between Nonprofit and Business Sectors: A Framework to Guide Strategy Development for Nonprofit Organizations

Collaboration between nonprofit and business sectors is widely regarded as a value creation process that benefits society, business, and nonprofit organizations (NPOs). This process, however, has rarely been considered from a nonprofit perspective. In this paper, we discuss a new framework to assist NPOs in developing strategic collaborations with businesses. We argue that, by being strategically proactive rather than reactive to what businesses might offer, NPOs can increase the scale of their cross-sector collaborations and thus enhance their sustainability. Implications for research and practice are discussed.     

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.     

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.     

“The advancing of management”: Cross‐sector agents and rationalization of nonprofits in Eastern China

This study examines and extends former theoretical argument of nonprofit rationalization in the Chinese context. Based on a survey study of 179 nonprofit organizations across Zhejiang province of Eastern China, we find that nonprofits led by individuals with prior business experience and with more extensive business networking are more likely to adopt rationalized rules and practices. Moreover, the results indicate support for the mediation effect of business networking on the relationship between prior experience and rationalization. We also find the moderation effects of management training on the direct effect of prior business experience and on business networking, as well as the indirect effect of prior business experience on rationalization via business networking. Our findings contribute to explaining the formation of rationalization in the Chinese nonprofit sector and provide implications for future research, practice, and policy.     

Saving the Moral Capital of NGOs: Identifying One-Sided and Many-Sided Social Dilemmas in NGO Accountability

The literature on nonprofit management has embraced the concept of “accountability” to target urgent challenges related to NGO probity and integrity, and there have been attempts in the literature to use rational-choice-based governance approaches to solve them. Although the existing principal–agent frameworks provide important insights, they are limited to the analysis of financial relationships between NGOs and donors. We contribute to the literature in developing a comprehensive rational-choice-based governance approach to analyze all stakeholder relationships of NGOs. Applying the research program of ordonomics, we unpack two fundamental interaction problems: (a) the “stakeholder dilemma” between the NGO and a single accountability holder as a one-sided social dilemma and (b) the “competition dilemma” among rival NGOs as a many-sided social dilemma. We show that improving NGO accountability in relation to intended beneficiaries, peer organizations, and the general public also requires identifying the underlying governance problem as a competition dilemma focusing on collective self-regulation as a solution.     

Structure and adequacy of human service facilities: challenges for nonprofit managers

Findings from a statewide survey of nonprofit human service organizations in Illinois show great diversity in access to and use of facilities. Large proportions have facility-related problems that will require substantial investments beyond the financial capacity of the organizations themselves. The findings also point to major shortcomings in attention to or knowledge about facility-related problems among managers of these organizations. The findings have important policy implications for nonprofit managers, as well as for public and private funders and policy makers.     

Healthy Organizations,Unhealthy Communities?

Nonprofit organizations are an important part of local social networks that connect individuals and organizations and enhance the capacity of communities to solve social problems. However, the commercialization of nonprofit organizations influences their ability to contribute to this social capital. We reason that commercialization of a nonprofit organization may reduce its ability to contribute to social capital if it weakens its social networks; makes its network of relationships less stable; reduces the size, diversity, or involvement of its governing board; or reduces its level of voluntary participation.     

Merging nonprofit organizations: Analysis of a case study

This article presents a case study of merging among nonprofit organizations that provide social and community services. The study sheds light on the dynamics and problems of merging nonprofit organizations, whose espoused ideology focuses on promoting the well-being of their clients. The author describes and analyzes a merger in metropolitan Jerusalem, Israel, and highlights the potential problems that may ultimately undermine its success. This merger is the outcome of an ongoing power and political struggle. The analysis focuses on the organizational ideologies and culture as well as the strategies and structure of the merging organizations. In addition, the author deals with the underlying motives for merging, the driving and restraining forces, and the implications of merging nonprofit community services organizations with other social and human services organizations.     

Adaptive Strategies of Nonprofit Human Service Organizations in an Era of Devolution and New Public Management

This article reviews the results of a multiphase study of nonprofit human service organizations serving children and youth in Cuyahoga County, Ohio. The purpose of the study was to identify adaptation strategies organizations found effective for the current environment. The study reviews the results of longitudinal focus groups and a final workshop directed to analyzing strategies for maintaining organizational viability. Effective adaptations included strategic expansion of services and client bases, networking as a means to acquire and stabilize revenue streams and resources, and increased use of business techniques and technology to generate outcome measures and an image of effectiveness with funders.     

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.     

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.     

Beyond Cans and Capacity

Many essential public services are provided through networks of community‐based nonprofit organizations. Previous research has demonstrated that simply providing additional resources to these organizations is insufficient to better address demands for public services. We also know little about how and why these organizations adopt network‐level objectives related to service provision. In this analysis, we expand the focus of service provision beyond capacity to incorporate the unique roles that define the very existence of nonprofit organizations, and how these roles affect organizational behavior with respect to service network objectives. We use focus group, survey, and administrative data from one hundred community‐based nonprofit organizations in an emergency food service network to explore the relationships among capacity, roles, and specific program objectives.     

Nongovernmental Organizations,Business, and the Management of Ambiguity

Partnerships between business and nongovernmental organizations (NGOs) that seek to promote fair trade between small scale producers in poor countries and Western consumers are opening up new and potentially challenging approaches to development in terms of income generation, local capacity building, and alternative sources of NGO funding. However, such ventures face a distinctive set of problems, many of which arise because these ventures are located uncomfortably on the boudary between the nonprofit and the business sectors. The concept of sectoral ambiguity helps to explain observed problems with confused expectations, management tensions, and lack of sustainability. Strengthening these partnerships will require greater transparency, market diversification, long-range planning, and the building of a set of more realistic expectations.