Organizational Identity in Nonprofit Organizations: Strategic and Structural Implications

Organizational identity is what is central, distinctive, and enduring about an organization. This article argues that clarity and consensus about organizational identity are essential elements in setting successful long‐term strategy and making structural choices in a nonprofit organization. Four classes of nonprofit organization are examined here: grantmaking foundations, federated fundraising organizations, nonprofit academic centers, and social enterprises. In each case, alternative identities are described and the implications of each identity for organizational strategy and structure are analyzed. The article suggests that examination of identity should become an integral part of organizational development for nonprofit organizations and a subject for continued research.     

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     

Nonprofit Board Balance and Perceived Performance

Based on prior literature, this article offers a reconciliation of the core roles of nonprofit boards and aligns these role‐sets with organizational theories. A survey instrument was developed and validated to measure each of four role‐sets (monitoring, supporting, partnering, and representing) to assess whether emphasis on specific roles affects board members’ perception of performance. Our study of nonprofit boards in a midsized midwestern city found that balance across the role‐sets was associated with effective organizational performance. Furthermore, when board members describe any of the four role‐sets as deficient, they perceive the organization as less effective. The results of the study provide practitioners with a validated survey tool that provides nonprofit boards with a method to identify which roles their board emphasizes.     

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.     

Is organizational behavior in U.S. Muslim nonprofit institutions religious?

Several researchers argue that religion influences organizational behavior in nonprofit institutions (Lotfy, 2004; Brinckerhoff, 1999). This article examines this claim by outlining major organizational values embraced by the leadership of twenty‐eight American Muslim nonprofit institutions. Two surveys were distributed to a random sample of 224 board members and 416 constituents in the southern and southeastern United States. Findings indicate that American Muslim nonprofit institutions remain religious even when they provide nonreligious services. Exhibiting religious organizational behavior is not random or accidental. Rather, it can be a reflection of the role of faith in nonprofits. Exploratory factor analysis reveals nine religiously important values that characterize managerial leadership in American Muslim nonprofit institutions. These values and their implications are discussed.     

Collaborations with faith‐based social service coalitions

Based on the first national survey of faith‐based social service coalitions in the United States, this article presents data on the degree to which these nonprofit organizations collaborate with other specific organizational types, as well as the range and intensity of these collaborations. In general, faith‐based coalitions tend to collaborate most frequently with other faith‐based agencies, a pattern especially characteristic of the more religiously expressive ones. However, collaboration with non‐faith‐based organizations is also quite common. Based on seven organizational characteristics, we are able to predict which faith‐based coalitions are most likely to collaborate with different types of organizations: coalitions that have more explicitly religious policies and practices with reference to clients and staffs are less likely to participate in intense collaborations with some types of secular organizations, and consistently less likely to do so with all types of governmental agencies.     

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.     

The Contextual Impact of Nonprofit Board Composition and Structure on Organizational Performance: Agency and Resource Dependence Perspectives

We study the relation between stability of the nonprofit organization’s environment and its board structure and the impact of this relation on organizational performance from the perspectives of both Agency Theory and Resource Dependence (Boundary Spanning) Theory. The impact of board characteristics on organizational performance is contextual. Specifically, we predict and show for a sample of U.S. nonprofits that board mechanisms related to monitoring are more likely to be effective for stable organizations, whereas board mechanisms related to boundary spanning are more effective for less stable organizations. We find that the two theories are complementary and address different aspects of nonprofit performance, but the results are statistically stronger and more often consistent with resource dependence than with agency theory. Overall, this study supports Miller-Millesen’s (Nonprofit and Voluntary Sector Quarterly, 32: 521–547 2003) contention that, because the nonprofit environment is often more complex and heterogeneous than the for-profit world, no one theory describes all tasks of nonprofit boards.     

Called to order: A board president in trouble

This is a fictionalized case based on real events. It is intended as a teaching tool to stimulate discussion about procedural issues in nonprofit governance; board roles and responsibilities; communications; and relationships between boards, chairs, and executives, particularly in the context of smaller organizations. It is meant to support sessions on nonprofit boards and governance in introductory courses on nonprofit management or for use in workshops with new or less experienced executives and board members. Set in an organization engaged in cultural exchange, the case can be used in introductions to nonprofit management, arts administration, or international nongovernmental management.     

Female leaders and board performance in member‐serving nonprofit organizations

Despite an active stream of “good governance” research, there is not yet much nonprofit scholarship examining how the gender composition of a board or its leadership relates to board performance. This article helps to fill this gap, focusing on the governance practices of US‐based nonprofits serving a domestic or international membership. A structural equation model finds that the presence of female leaders relates to the performance of nonprofit boards both directly and indirectly through these leaders' presumed influence on board characteristics and operation. This research advances the field by empirically testing a longstanding theory that board performance is both multidimensional and contingent on the market and labor environment, organizational capacity and other characteristics—in this case, gender dynamics. We find there are some positive relationships between female board leadership and clearly defined measures of board performance. These findings also suggest that a strategy to balance a board's gender may serve many nonprofits, but gender representation works in tandem with other board characteristics.     

Creating positive change in community organizations: A case for rediscovering Lewin

As nonprofits, especially those with a community mission, pursue developmental goals, they may benefit from various planning and analytical tools. This article explores an application of Kurt Lewin's planned change model to an assessment and revisioning process undertaken by a community‐based organization, indicating the ongoing usefulness of Lewin's work in the nonprofit sector. Using a case study approach, we examined the actions embarked on by the organization to address decreased funding and client losses. The Lewin model is overlaid to illustrate its value in structuring organizational decision making and development. The model is a three‐step process of unfreezing from old practices, moving and changing the organization into new directions based on formally identified needs, and refreezing into more effective organizational modes. When combined with other standard practices such as strategic planning, Lewin's model provides a practical and theoretically insightful tool for nonprofits wishing to refine their missions and programs and engage in successful organizational change.     

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.     

Succession,strategy, culture,and change at Santropol Roulant

Santropol Roulant is an innovative nonprofit organization in Montreal focused on youth training, food security, and intergenerational community building. Since its inception, the Roulant has delivered more than 250,000 meals to isolated seniors and trained more than sixteen hundred young volunteers. Within a few short months, the Roulant will lose half its board members, five senior staff members, and its dedicated and wellliked executive director. The leadership turnover will be a highstakes test for the Roulant: Can they turn a period of vulnerability into an opportunity for growth and rejuvenation? This teaching case is intended to develop familiarity with key issues related to succession planning, transition management, and organizational change. Students will learn about managing a period of complex, high‐intensity organizational change, develop an understanding of the linkages between organizational form and strategic objectives, and become familiar with the structural and substantive issues facing transition teams.     

Casa de Esperanza [Part C]

The challenges of nonprofit management and leadership often lie in balancing the constant demands of internal issues and the rapidly changing external context. As the third and final segment of the Casa de Esperanza case illustrates, there is no point of perfect balance. Part C documents the various mechanisms used to institutionalize the organization's identity as a community‐based Latina organization, including new structures, planning processes, and human resource management. In all, leaders strive to make the organization truly bicultural, allowing it to participate in mainstream circles while remaining grounded in core community values and practices. When faced by a new mandate from state funders, leaders use these internal changes as a new filter when considering the most appropriate action. As such, the case illustrates how proactive structural change can propel an organization to recognize realities.     

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.     

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.     

What Nonprofit Executives Want and What They Get from Board Members

In theory, nonprofit boards of directors exist to perform mission‐setting and oversight functions that help to ensure organizational accountability. Yet there is evidence that board behavior often falls short of this ideal. Using survey data from a sample of 241 executive directors of nonprofit agencies, we investigated whether nonprofit boards are meeting executive directors’ expectations, and if not, what factors explain this? We find that although board behavior tends to align closely with executive directors’ preferences for involvement in administration and management tasks, there is a greater disconnect between board behavior and executive directors’ preferences for involvement in mission‐setting and oversight duties. Factors that mitigate this gap include organizational professionalization and stability, whereas more extensive reliance on government funding exacerbates it. Female executive directors experience a greater disconnect in their preferences for board involvement and actual board involvement than male executive directors. We conclude by discussing the implications of our findings for both theory and practice.     

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.     

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.