Do Mission Statements Matter for Nonprofit Performance?

In this exploratory study, we examine whether organizational mission statement attributes make a difference to the performance of nonprofit performing arts organizations. We use text analysis to measure two semantic attributes—activity and commonality—of mission statements. We examine whether these attributes are associated with improved performance for the instrumental and expressive functions of nonprofit performing arts organizations. Our findings indicate that the mission statement attribute activity is associated with improved performance for both instrumental and expressive functions. Our analysis of nonfindings for the mission statement attribute commonality suggests that there is a need to develop and use content analysis tools tailored to nonprofit contexts.     

Why do participants in voluntary organizations leave? Exploring the relationship between value congruence and length of stay

Recognizing the importance of values and the specific characteristics of participants and situations in voluntary organizations, we examine how value congruence—the fit or compatibility of values between participants and the organization, or among participants—interacts with personal and situational factors to predict participants' length of stay in their organizations. Introducing the case of a voluntary organization that offers shared housing, we measure value congruence through textual similarity in the self‐introduction documents of 49 participants and the organization's mission statement. This approach differs from the self‐reported measures based on participants' perceptions or recalled interactions used in previous studies. In line with expectation‐disconfirmation theory, participants with the strongest beliefs in organizational values had shorter lengths of stay. The amount of intraorganizational communication also moderated the relationship between value congruence and length of stay. This study provides theoretical and methodological implications for nonprofit management by considering personal and situational factors and evaluating value congruence by textual similarity.     

Nonprofit organizations' use of the internet: A content analysis of communication trends on the internet sites of the philanthropy 400

To evaluate the current status of communication and fundraising strategies on the Internet, a stratified random sample of the Chronicle of Philanthropy's Philanthropy 400 was content‐analyzed in mid‐January 2005. Web sites were coded on variables identified in practitioner and scholarly literature on issues of accountability, fundraising practices, and interactive communication strategies. Chi‐square analysis found that the top nonprofit organizations included copies of their annual reports, organizational goals, and mission statements, while second‐tier organizations were more likely to use a sales approach by using e‐commerce technology and terminology to process online donations.     

Structure and accountability a study of national nonprofit associations

In the 1990s, the integrity and performance of nonprofit organizations in the United States have come increasingly under attack, and there are new calls to hold nonprofit organizations more accountable for their behavior and performance. This article reports on a study of the organizational structures of national nonprofit associations and asks how these umbrella organizations can help to self-regulate the sector through appropriate checks and balances between the national organization and local affiliates. The authors identify a number of differences in how associations with alternative structures hold local affiliates and national organizations responsible for their performances, and they conclude that structure is an avenue of self-regulation for nonprofit organizations deserving further attention.     

Institutional isomorphism and nonprofit managerialism: For better or worse?

Nonprofit organizations (NPOs) have increasingly adopted business‐like practices as a response to institutional pressures. Some researchers argue that this development leads to mission drift, whereas others find a positive effect on organizational performance. However, the institutional pressures responsible for shaping the nonprofit sector have remained hard to distinguish from each other. This study explores the consequences of mimetic, normative, and coercive pressures, and looks at how they affect managerialism, organizational performance, and mission drift. We link these concepts through a structural equation model based on survey data and find that one aspect of managerialism, strategic behavior, is a key construct in influencing the response to isomorphic pressures and can positively affect organizational performance while holding off‐mission drift. Normative isomorphism even has a direct positive effect on organizational performance. Mission drift can take place when organizations are under coercive pressure without having strategies or internal processes in place. These findings imply that organizations should invest in their strategy and the professional development of their staff to increase organizational performance and avoid mission drift.     

Understanding nonprofit missions as dynamic and interpretative conceptions

Missions are central to all nonprofit organizations, and establish their purposes. However, formal mission statements can fail to provide a true picture of a nonprofit’s mission. This article draws on prior scholarship on missions, including the role of interpretation and change, to propose two new concepts: personal and dominant mission conceptions that introduce a dynamic, socially‐constructed understanding of nonprofit mission. Personal mission conceptions are the interpretations that individuals within a nonprofit hold of the mission, while the dominant mission conception is the collective interpretation guiding a nonprofit during a specific time. Examples from two specific nonprofits are provided to demonstrate the conceptions, along with some guidance for how mission conceptions can inform future research and practice.     

Nonprofit management practices and work processes to promote gender diversity

Nonprofit organizations have long provided an important space for women to establish roles in public life. Using establishment‐level data on for‐profit and nonprofit organizations, we show that the proportions of women in full‐time and mission‐critical positions are higher in nonprofits. In contrast, for‐profit businesses have more women in part‐time jobs and in jobs that are peripheral to the organizational purpose. We also demonstrate that the greater proportions of women in full‐time and mission‐critical positions in nonprofits are due to the use of inclusive work processes and transparent human resource management practices. Our findings provide evidence to pursue the aspects of nonprofit organizations that expand opportunities for working women.     

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     

Fraud survival in nonprofit organizations: Empirical evidence

This study examines the survival of nonprofit organizations after the discovery of a fraud. Literature on nonprofit fraud claims that fraud has a destructive impact on nonprofit organizations. This study is the first to provide empirical evidence of the impact of fraud on a nonprofit organization's survival, and to analyze the significance of underlying organizational and fraud factors. An analysis of 115 nonprofit organizations experiencing a fraud shows that over one fourth of these organizations did not survive at least 3 years beyond the publication of the fraud, a rate considerably higher than the typical nonprofit failure rate. This article investigates the characteristics of surviving organizations and finds that older and larger organizations are more likely to survive, indicating the liabilities of newness and smallness hold in fraud survival situations. In cases where an executive‐level perpetrator committed the fraud, or where the organization victimized the public, the organization was less likely to survive. These findings suggest nonprofit organizations, particularly those that are new or small, could benefit by implementing governance policies and procedures that are consistent with those employed by more established organizations.     

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.     

Managing stakeholder relationships and nonprofit organization effectiveness

This research examined how nonprofit organizations manage their relationships with stakeholders and how these practices relate to perceived organization effectiveness. We conducted semistructured, open‐ended interviews with executive directors of nonprofit organizations (NPOs) to discover whom they see as their stakeholders, the types of expectations they encounter from stakeholders, and the practices they use in managing stakeholder relationships. The two nonprofits that were evaluated as most effective used a consistent, thematic rationale in dealing with stakeholder issues: one organization discussed its actions in terms of its mission and core values, the other based its actions in terms of building relationships and networks. Our study suggests that organizations that ground their external relations in issues that are recognized as good nonprofit management, and do so consistently across stakeholder groups, will tend to be rated as more effective by multiple, external evaluators.     

Commitment and performance of nonprofit board members

Boards of nonprofit organizations are entrusted to oversee and ensure that the organization remains true to its mission, functions within the confines of state and federal laws, and operates in a financially responsible manner. This critically important oversight is carried out by volunteers. This study examined the relationships between board member commitment and individual performance. Commitment was assessed using Meyer and Allen's Three‐Component Model of Commitment: Affective, Continuance, and Normative (1991). The population in this study was volunteer board members of midsized, social service nonprofit organizations in the Orange County, California, area. The strongest findings were between affective commitment and performance in board roles. Committed board members reported more involvement and are perceived by the executive to be more engaged and valuable. Analysis revealed that executive judgments of participation are based on both board member behavior and Affective commitment expressed by the board member.     

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.     

Organizational Self‐Censorship: Corporate Sponsorship,Nonprofit Funding,and the Educational Experience*

La dépendance croissante du secteur privé envers la commandite a eu des conséquences sur la gouvernance des organismes sans but lucratif (OSBL). La recherche traditionnelle sur le financement a pris un angle d'observation essentiellement positif, montrant que les OSBL peuvent trouver des occasions d'influencer les intérêts de leurs bailleurs de fonds de manière à ce qu'ils deviennent plus compatibles avec la mission de l'OSBL. Dans cet article, les auteurs s'inspirent de ce travail en fournissant un examen plus nuancé de l'intermédiaire dans l'OSBL. Plus précisément, les auteurs introduisent une forme négative d'intermédiaire connue sous le nom d'autocensure organisationnelle. En examinant l'autocensure, ils montrent que les OSBL devraient plutôt redéfinir leurs propres buts de manière à attirer les bailleurs de fonds du secteur privé. Increasing reliance on corporate sponsorship has impacted the governance of nonprofit organizations. Traditional research on funding has taken a predominately positive vantage point, expressing that nonprofit organizations may find opportunities to influence their funder's interests such that they become more compatible with the nonprofit organization's mission. In this article, we build upon this work by providing a more nuanced examination of agency in the nonprofit organization. Specifically, we introduce a negative form of agency known as organizational self‐censorship. By examining self‐censorship, we reveal that nonprofit organizations may instead redefine their own goals in order to appeal to private sector funders.     

The Relationship between Provision of Membership Benefits and Fulfillment of Representational Roles in Nonprofit Advocacy Membership Organizations

This article explores the ways nonprofit advocacy membership organizations can manage their resource dependence on members and fulfill the organizations' representational roles, focusing on the provision of membership benefits. Membership organizations rely on financial or other resources from members and thus are constrained by them. For a nonprofit that aims to primarily speak for members, constraints by members may help to focus organizational attention on members' interests. Contrarily, for a nonprofit that aims to mainly represent broader constituents, members' constraints may hamper an organization's ability to advocate for broader constituents because members do not necessarily share the same policy goals with broader constituents. The provision of membership benefits can be a useful strategy for organizations to fulfill their representational roles and to satisfy and engage members, because people often join an organization to enjoy certain membership benefits. For an empirical analysis, this study collected a large‐scale data set through web and mail surveys of nonprofit advocacy organizations across the United States. The mixed‐mode surveys achieved a 57.5 percent response rate (729 responses). The survey and regression analysis results show that member‐serving nonprofits providing members with opportunities to participate in advocacy work are more likely to represent members' interests directly. Although broader constituency‐serving nonprofits tend to prioritize members' opinions, these organizations are more likely to adhere to the mandates of broader constituents when providing selective material membership benefits. However, when providing purposive membership benefits, these nonprofits are more likely to represent members' opinions.     

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 Pyramid of Nonprofit Responsibility: The Institutionalization of Organizational Responsibility Across Sectors

Observers have noted that organizations in all sectors, whether business, nonprofit, or government, have been moving toward rationalized structures that presuppose and express empowered organizational actorhood. We draw upon neo-institutional theory in this paper to extend the argument: The arrival of organizational actorhood has precipitated a concomitant, cross-sectoral movement toward organizational social responsibility. Whereas existing research has tended to theorize the social responsibilities of businesses, we develop a pyramid conceptual schema to array the social responsibilities of nonprofits. We then document the coevolution of organizational actorhood and responsibility across both sectors with a metastudy of nearly 200 extant surveys. We chart the institutionalization of a slate of formal structures that express organizational actorhood (i.e., mission statements, vision statements, and strategic plans) and that profess and define organizational social responsibilities (i.e., core values, ethics codes, and responsibility communications). We close with implications and future directions for organizational studies and research on corporate social responsibility.     

Past work experience and organizational assimilation in nonprofit organizations

This study compares seven dimensions of organizational assimilation (OA)—familiarity with coworkers, familiarity with supervisors, recognition, acculturation, involvement, job competency, and role negotiation—into nonprofit, for‐profit, and governmental organizations incorporating the role of similarity of past work experience (magnitude of transition [MoT]). An online survey of 294 employee newcomers (tenures of 3 months or less) revealed differences in OA between those entering nonprofits and those entering for‐profit, and governmental organizations. Compared to newcomers entering for‐profit and governmental organizations, nonprofit newcomers reported higher levels of job competency, involvement, acculturation, and role negotiation. Interactions between organization type and MoT from past work to current roles were examined for effects on OA. When MoT was low, nonprofit newcomers were higher on acculturation and involvement than for‐profit newcomers; governmental newcomers with high MoT were significantly higher on role negotiation than for‐profit newcomers. Theoretical and practical implications for nonprofit organizational management, trainers, and nonprofit newcomers are discussed.