Nonprofit Management and Leadership

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  • 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.

  • Improving and measuring transparency in NGOs: A disclosure index for activities and projects

    Nongovernmental organizations (NGOs) are established not with the aim of making profits but rather to provide social values by implementing different projects and activities. Transmitting complete information about these projects to society is a key element of transparency, as they operate within an atmosphere of public trust. Although there is a large body of literature on transparency in NGOs from a global perspective, very little research has been conducted on transparency within the area of projects and activities. This study takes a deeper look at this line and contributes to the literature on transparency in NGOs by proposing an index to measure the information transparency of the projects implemented by these organizations. The index captures three dimensions of the information about the projects (technical, financial, and scope) and makes it possible to: analyze the level of transparency of the portfolio of projects, detect the specific aspects that could be improved in each organization, and carry out comparisons among organizations.

  • Is your church “liked” on Facebook? Social media use of Christian congregations in the United States

    Despite the increasing interests in social media platforms among religious congregations, little is known about the patterns of these organizations' social media use. This study examines religious congregations' adoption of Facebook, using the data from the 2012 National Congregations Study. The results show that Christian congregations' involvement in nonreligious activities, both social service and political activities, predicts their Facebook adoption. Congregations' membership size and staff resources are also positively associated with their Facebook use. Other organizational characteristics, including religious tradition, clergyperson's age, and urban location, also explain congregations' Facebook use. Overall, the findings suggest that Christian congregations' adoption of social media platforms is closely related with their community outreach and social marketing activities as well as their resources. This study concludes with suggestions for narrowing the gap in social media use between resource‐rich and resource‐restricted congregations, as well as between urban and rural congregations.

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  • Do operating reserves stabilize spending by nonprofit organizations?

    The public budgeting literature has a long and rich tradition that examines the role of budget stabilization funds as fiscal stabilizers for state and local governments during periods of declining revenues and deteriorating economic conditions. Similarly, nonprofit organizations may accumulate operating reserves that allow them to smooth out annual imbalances between revenues and expenses, especially when facing a fiscal shock. Agency theory, on the other hand, indicates that managers might use these reserves to enrich themselves at the expense of the organization. This article is a step toward addressing a gap in our knowledge by analyzing the implications of reserves on nonprofit spending in general and also on particular functions (program versus overhead spending). Using a long panel of data from 1995 to 2011 and controlling for sample selection bias, the empirical results suggest that operating reserves held by nonprofit organizations do reduce expense gaps during downturns, but the effect is small. The results also suggest that nonprofit managers value current spending more than reserving funds for the future. Further, operating reserves are not associated with agency problems as predicted by theory. The empirical results suggest that the current rule of thumb—that nonprofits ought to hold up to 6 months of operating reserves—is inadequate if these pools of savings are intended to maintain all spending at trend during poor fiscal times. If, however, reserves are intended to only offset trend deviations partially while alternative strategies are sought, then the current rule of thumb may be sufficient.

  • Innovativeness of social economy entities in Poland. An empirical study from the perspective of Positive Organizational Scholarship

    The Polish system of tackling social exclusion is based on social economy entities, such as social integration centers and social cooperatives. The aim of the article is to define the essence and conditions of their innovativeness while answering the question to what extent the organizations can make use of management theories created for business entities. The empirical basis for the article are 3 focus group interviews with representatives of social integration centers and social cooperatives operating in Poland. The results suggest that low innovativeness of the entities is, among others, the effect of an authoritarian management style and a lack of care about positive relationships among employees.

  • Determinants of the recovery of financially distressed nonprofits

    Financial ratios are traditionally used to predict and diagnose financial vulnerability; this is helpful, but leaves unanswered how the vulnerable nonprofit should prioritize this information in order to survive. Using panel data, this empirical study observes the financial behaviors of distressed nonprofits for 4‐year periods where the first 2 years are financially vulnerable. Two definitions of vulnerability are tested: when liabilities exceed assets (insolvency) and when net assets shrink by more than 25% annually (financial disruption). In determining which nonprofits recover during the final 2 years, we find that the type of vulnerability impacts which financial indicators a nonprofit should target, and that common tactics such as improving profitability may be counterproductive. Finally, we do not find evidence for liabilities of newness or smallness in the statistical analysis.

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  • Strategic philanthropy and its challenges in India: A multiple case study of grantmaking organizations

    Grantmaking organizations in the United States play an increasingly important role in philanthropic giving toward international development issues. Champions of strategic philanthropy have encouraged grantmakers to set clear goals, use evidence‐based strategies, and monitor programs. This exploratory study delves into grantmaking in one of the largest emerging economies; India. Although India is a major recipient of private philanthropy, it continues to perform below average on various socio‐economic indicators. The impact of grantmaking has been unclear. We conducted in‐depth interviews with managers and leaders (n = 9) engaged in decision‐making within U.S. based grantmaking organizations, including nonprofit intermediaries and philanthropic foundations. We examine how the concept of strategic philanthropy is operationalized by participant organizations. Although the participants acknowledge the importance of starting out with a well‐defined strategy, they also face several challenges. We identify some of these challenges, outline how they are being addressed, and discuss implications.

Featured documents

  • The Effects of the Facial Expression of Beneficiaries in Charity Appeals and Psychological Involvement on Donation Intentions

    To increase the effectiveness of fundraising campaigns, many human‐need charities include pictures of beneficiaries in their ads. However, it is unclear when and why the facial expression of these beneficiaries (sad versus happy) may influence the effectiveness of charity ads. To answer these...

  • Back to Basics

    Nonprofits are under increased accountability pressures to demonstrate their effectiveness. Output measurement (how much is produced) is disregarded as simplistic. Emphasis is made instead on measuring outcomes (changes in the lives of beneficiaries) or impacts (effects developed relative to the...

  • In Search of Strategy

    The canon of volunteer administration contends that adoption of specified practices separates effective from ineffective programs. Alternatively, structural contingency and strategic human resource management theories suggest that managers make adoption decisions based on how organizational...

  • Social Media Management

    Do foundations effectively use social media to engage stakeholders? Do usage and engagement vary by foundation type? This article has been written to stimulate discussion and research about social media use and user engagement by foundations beyond measuring social media presence. We analyzed...

  • Episodic Volunteering at a Religious Megaevent

    In preparation for Pope Francis's visit to Philadelphia and the 2015 World Meeting of Families, organizers looked for thousands of volunteers to help carry out these events. This is common for many one‐time and episodic events, such as large sporting events (from marathons to Special Olympics),...

  • Organizational Identity and Philanthropic Institutions

    This article proposes a framework for viewing the behavior of philanthropic institutions through the lens of organizational identity via semi‐structured interviews with twenty‐seven grantmakers representing seventeen foundations, along with content analyses of these foundations’ public documents....

  • 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...

  • Playing the Numbers Game

    Nonprofit organizations are often evaluated using the program ratio: the proportion of mission‐related program expenses to total expenses. Nonprofit managers have incentives to manipulate the reporting of financial information to enhance the program ratio. This article reviews the scholarly...

  • The Effects of Capital Campaigns on Other Nonprofits’ Fundraising

    This study focuses on the effects of capital campaigns on the fundraising performance of other nonprofits within the same geographic region. Drawing from research in organizational ecology and charitable giving, we offer a theory of capital campaign impact that says any impact of a campaign must be ...

  • 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...

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