Common Agency in Nonprofit Advocacy Organizations

• Author: Dyana P. Mason
• Published date: 01 September 2016
• DOI: http://doi.org/10.1002/nml.21211
• Date: 01 September 2016

11

N M  L, vol. 27, no. 1, Fall 2016 © 2016 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.21211

Journal sponsored by the Jack, Joseph and Morton Mandel School of Applied Social Sciences, Case Western Reserve University.

Correspondence to: Dyana Mason, University of Oregon 1209 University of Oregon 119 Hendricks Hall, Eugene, OR

97403-1209. E-mail: dmason@uoregon.edu.

Research Articles

Common Agency in Nonprofi t

Advocacy Organizations

Dyana P. Mason

University of Oregon

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 frame-

work, 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 organi-

zations in California. Findings suggest that the leaders of these groups have a significant

amount of discretion in guiding their organizations’ activities and operations.

Keywords: advocacy , nonprofit , theory

NONPROFIT ADVOCACY ORGANIZATIONS—and the leaders who lead them—have become

central players in American political and policy processes by helping to connect citizens with

their elected officials and other decision makers. These groups also help to frame issues, edu-

cate voters and other interested parties on the issues before them, and mobilize members of the

public to take action (Berry 1993 ; Berry and Arons 2005 ; Child and Grønbjerg 2007 ; Jenkins

2006 ; Verba, Schlozman, and Brady 1995 ). However, the inner workings of these organiza-

tions, or how leaders make decisions in these organizations, are not well understood. Previous

studies on nonprofit management and decision making focused mostly on the organization ’ s

board of directors rather than the executive or president. Additionally, nonprofit advocacy

organizations are rarely evaluated independently as a discreet subsector in the wider nonprofit

community. This article addresses these gaps in the literature by developing a new theoretical

framework that may be used to better understand how and why organizations—or more spe-

cifically, their leaders and executives—make decisions on organizational activities, structure,

and strategy in an environment with multiple stakeholders.

Nonprofi t Management & Leadership DOI: 10.1002/nml

12 MASON

Through the insights offered by agency theory (Eisenhardt 1989 ; Jensen and Meckling

1976 ), I use an extension of agency theory called common agency (Bernheim and Whinston

1986 ), which models the relationship between one agent and multiple principals. Addition-

ally, I also use Romano ’ s ( 2013 ) typology of stakeholders in an organization ’ s environment.

Although common agency is not inconsistent with stakeholder theory (Donaldson and

Preston 1995 ; Freeman 1984 ; Freeman and Reed 1983 ), it is better able to demonstrate how

the incentives available to the executive, and his or her stakeholders, may allow executives

more discretion, defined as the autonomy to make decisions, than has previously been sug-

gested. In other words, it places the individual leader at the center of a dynamic and complex

stakeholder environment.

This article first develops a common agency framework and applies it to nonprofit advocacy

organizations. Then, it introduces some initial evidence from exploratory semi-structured

interviews with a small set of leaders of nonprofit advocacy organizations in California,

providing evidence of common agency in practice. Specifically, I address the relationship

between a nonprofit leader (the individual responsible for day-to-day decisions) with three

leading stakeholder groups in the organization ’ s environment, which Romano ( 2013 ) consid-

ers key participants in the organization ’ s “governing coalition”: (1) the organization ’ s board

of directors, (2) elected officials and other policy makers, and (3) donors, members, and vol-

unteers. Findings from the interviews suggest that, contrary to the existing board-heavy view

in studies of nonprofit governance, the leaders of these groups have a significant amount of

discretion in guiding their organizations.

Nonprofi t Advocacy Organizations

Nonprofit advocacy organizations can be characterized as having a social or policy change mis-

sion; they include social movement organizations, civic engagement organizations, political

organizations, and even “interest groups.” Outside of most policy-making institutions, they

“represent the collective interests of the general public and underrepresented groups as opposed

to the interests of well-organized powerful groups, especially business, mainstream social insti-

tutions, and the elite professions” (Jenkins 2006 , 307). They also help to facilitate a wide range

of civic engagement activities meant to influence either policy making or public opinion (Boris

and Mosher-Williams 1998 ). Because they are conceptualized as being outside of both govern-

ment and corporate structures (DiMaggio and Anheier 1990 ; Nicholson-Crotty 2011 ), they

are important to political processes because they provide a way to link the interests of constitu-

ents with those of their elected officials and other decision makers (Boris and Krehely 2002 ).

They also are leaders in agenda setting and framing of political issues and act as monitors to

the policy-making and implementation processes (Berry and Wilcox 2009 ). As such, they are

crucial to our understanding of American politics and policy making.

Nonprofit advocacy organizations often have internal structures and external stakeholders

that are distinct from other nonprofit organizations that are more focused on service deliv-

ery. For one, they are often organized as 501(c)(4) organizations and contributions to them

are not tax deductible, unlike charitable 501(c)(3) organizations. As advocacy organizations,

the relationship with government agencies and elected officials might also be adversarial

rather than collaborative (Anheier 2005 ; Frumkin 2005 ), which is different from many non-

profit organizations that partner with government to provide services. In those cases, the

government–nonprofit relationship can be seen as more interdependent (Alexander and