Enterprise Schemes for Nonprofit Survival, Growth, and Effectiveness

• DOI: http://doi.org/10.1002/nml.11303
• Date: 01 March 2001
• Published date: 01 March 2001
• Author: John M. Bryson,Gary Shaye,Michael J. Gibbons

Enterprise Schemes for

Nonprofit Survival, Growth,

and Effectiveness

John M. Bryson, Michael J. Gibbons,

Gary Shaye

The need for nonprofit organizations to develop a viable enter-

prise scheme is discussed in this article. An enterprise scheme

indicates how the organization can meet social needs and stake-

holders’ interests in a self-sustaining way over the long haul.

Without a viable enterprise scheme, the organization will not

survive, let alone grow, prosper, and achieve its mission.

NONPROFIT organizations come in many different shapes, sizes,

and legal forms. All, however, are justified by what they do

to address important social needs and stakeholder interests

(Salamon, 1992; Oster, 1995). A nonprofit organization must

find some way to address these needs and interests so that the orga-

nization will be self-sustaining over the long haul, or else the

organization will not survive and grow, let alone prosper and achieve

its mission. In other words, the organization must develop and imple-

ment a viable enterprise scheme if the organization and society are to

be better off in the long run. We argue that developing a viable enter-

prise scheme is an important, and probably crucial, leadership task.

We assume that nonprofit organizations exist within open, nat-

ural systems (Scott, 1987; Stone and Bryson, 2000). The organiza-

tions are thus open to their environments, have relatively permeable

boundaries, and are called upon to do work that is deeply affected by

formal and informal coalitions and networks. A crucial feature of this

theoretical perspective is that each organization is itself a system that

must garner the resources needed to produce outputs that are valued

NONPROFIT MANAGEMENT & LEADERSHIP, 11(3), Spring 2001 © Jossey-Bass, A Publishing Unit of John Wiley & Sons, Inc. 271

Note: Special thanks to Peter Bell, president of CARE USA, and to Jim Austin,

Coralie Bryant, Bob Klitgaard, Christine Letts, Kash Rangan, and Steven R.

Smith, who provided helpful comments to improve this article. This article rep-

resents our viewpoint and not the official view of CARE USA.

nml11303.qxp 1/24/01 1:22 PM Page 271

enough by key resource controllers to trigger the continuing resource

flows necessary to sustain the organization. This perspective thus

implies that systems thinking on the part of organizational members

is needed to understand the organizational system and its intercon-

nections with larger social systems (Senge, 1990; Oshry, 1995, 1999).

Understanding system elements and the relationships among them,

including feedback relationships, is absolutely crucial (Richardson,

1991). Systems thinking tools are needed to help the board, leaders,

and managers formulate effective means for addressing social and

stakeholder concerns in ways that are self-sustaining for the organi-

zation in the long run (Senge, Kleiner, and Roberts, 1994; Senge and

others, 1999).

In this article we present the idea of a viable enterprise scheme as

a useful systems thinking tool for capturing the essence of a nonprofit

organization as a self-sustaining system. A viable enterprise scheme

may be defined as a set of interrelated elements—a system—that

demonstrates in a plausible and sensible way how the organization

can produce things valued enough by its external environment to gen-

erate the resources needed for organizational survival, growth, and

mission accomplishment. The elements of an enterprise scheme are

presented in Figure 1.

Enterprise Schemes

An enterprise scheme clearly is related to a strategic plan, and devel-

oping an enterprise scheme may be seen as a strategic planning task.

What is special about the enterprise scheme idea, however, is its

emphasis on coherence across its components and on the importance

of self-sustaining, dynamic feedback. Too often, strategic plans are

lists of items without the necessary coherence, and too often strategic

272 BRYSON, GIBBONS, SHAYE

Figure 1. Elements of an Enterprise Scheme

Pursue meaningful

mission and fulfill

mandates

Build and draw on

core and distinctive

competencies

Pursue competitive

and collaborative

advantages

Understand social

needs and

stakeholders and

their interests

Employ coherent and

effective strategies

and operations

Cultivate support

and legitimacy

Secure needed

resources

Produce desirable

results

Too often,

strategic plans

are lists of items

without the

necessary

coherence, and

too often strategic

planning

processes do not

produce the kind

of dynamism and

feedback thinking

needed to

understand and

strengthen

systems

nml11303.qxp 1/24/01 1:22 PM Page 272