Managing Multisite Nonprofits

• Author: V. Kasturi Rangan,Allen Grossman
• Date: 01 March 2001
• Published date: 01 March 2001
• DOI: http://doi.org/10.1002/nml.11306

Managing Multisite Nonprofits

Allen Grossman, V. Kasturi Rangan

Multisite nonprofit systems are organized in a variety of ways,

ranging from central control to local control. Regardless of

where a system falls along this organizational continuum,

inevitable tensions emerge in the relationship between head-

quarters and the local organization. The purpose of this article

is to understand the causes of these tensions and to offer man-

agement action that, regardless of the organizational structure,

leads to greater system cohesion. Our exploration was facili-

tated by intense field research at five multisite systems: Outward

Bound USA, Planned Parenthood, Habitat for Humanity, SOS

Kinderdorf, and The Nature Conservancy.

Our investigation suggests that multisite system behavior may

be mapped on two dimensions—one that exerts forces toward

unit autonomy and the other influencing the degree of organi-

zational affiliation. These forces are associated with a host of

organizational functions that are the traditional domains

of management to influence and shape and thereby enable a

multisite nonprofit to simultaneously optimize the benefits of

organizational affiliation and unit autonomy.

THE struggle to coordinate the work of the center and the affil-

iates is more the rule than the exception in multisite nonprof-

its, with most facing a seemingly never-ending challenge to

reconcile internal issues around power, responsibility, and account-

ability. As a result, critical management decisions often take inordi-

nate amounts of time, energy, and resources. This reality contributes

to the commonly held perception, both inside and outside the sector,

that multisite nonprofits are less efficient and effective than organi-

zations in the for-profit sector.

There is a sad irony to this situation. The very reason nonprofits

exist is to solve complex social problems—from eliminating hunger

to improving education. But often the way nonprofit organizational

NONPROFIT MANAGEMENT & LEADERSHIP, 11(3), Spring 2001 © Jossey-Bass, A Publishing Unit of John Wiley & Sons, Inc. 321

Note: We are grateful to Elaine Backman for her many helpful comments and

suggestions on earlier versions of this article.

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structures evolve creates an additional layer of complexity. Social

entrepreneurs can be so focused on their causes that they pay little

attention to the operational implications when creating multisite sys-

tems. For example, from their perspective, trying to exercise too

much control over the evolution of a system could discourage oth-

ers from catching the mission fever. Josh Miner (interview, Aug. 3,

1998) considered the infectious spread of experiential learning to be

a major goal of Outward Bound, the multisite nonprofit organization

he founded in 1961. Initially, he was eager to give away any aspect of

the Outward Bound model to other organizations and was only

slightly more cautious in creating guidelines for establishing affili-

ates. This facilitated early rapid growth, but it also contributed to per-

nicious tensions within the organization that threatened to

undermine its long-term mission effectiveness.

The premise of this article is that the moment an affiliate is cre-

ated by a nonprofit, a new set of challenges must be addressed. These

challenges deal with defining the relationship between the operating

units and the center and among the operating units themselves.

Drawing upon five in-depth case studies, we identify common ten-

sions within multisite nonprofits and the underlying factors that con-

tribute to these tensions. The case analysis allows us to identify a set

of management levers that can be used by organizational leaders to

structure multisite systems to optimize performance and balance

issues of internal cohesion.

Research Positioning

Although a broad body of work exists on the organizational struc-

ture of NPOs in general (for example, Weisbrod 1998; Tuckman

1998), the literature on multisite nonprofits is relatively focused on

providing basic statistical information about their prevalence or illus-

trating the variety of associational structures encountered. Group-

ings of nonprofit organizations are often labeled “umbrella

associations” (Young, 1998; Hodgkinson, Weitzman, Noga, and

Gorski, 1993). Hodgkinson, Weitzman, Noga, and Gorski report that

approximately 22 percent of U.S. nonprofits belong to one. Oster

(1992) reports a higher number—more than 50 percent, especially

among the top one hundred charitable organizations. Across these

umbrella associations, the question of how much to centralize or

decentralize multisite organizations is an issue of great significance

to nonprofit managers. Multisite NPOs must be responsive to multi-

ple constituencies and stakeholder groups whose differing interests

must be reconciled (Tschirhart, 1996). There are obvious tensions

involved, exacerbated by what Alexander (1998) calls “dominant

coalitions,” which include a cluster of factions that may battle for

control inside umbrella associations.

National and international associations of NPOs take on a variety

of structural forms, ranging from loose associations or alliances to

322 GROSSMAN, RANGAN

Social

entrepreneurs can

be so focused on

their causes that

they pay little

attention to the

operational

implications

when creating

multisite systems

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