Managing Nonprofit Organizations

Mary Tschirhart, Wolfgang Bielefeld

• Publisher: Jossey-Bass
• Year: 2012
• ISBN:
  9781118233887
• Edition: 1
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

MANAGING NONPROFIT ORGANIZATIONS

This essential resource offers an overall understanding of nonprofits based on both the academic literature and practitioner experience. It shows how to lead, manage, govern, and structure effective and ethical nonprofit organizations. Managing Nonprofit Organizations reveals what it takes to be entrepreneurial and collaborative, formulate successful strategies, assess performance, manage change, acquire resources, be a responsible financial steward, and design and implement solid marketing and communication plans.

" Managing Nonprofit Organizations is the only introductory text on this subject that manages to do three critical things equally well: It's comprehensive, covering all the key topics leaders of NPOs need to know about; it's practical, providing lots of examples, case incidents, and experiential exercises that connect the content to the real world; and, best of all (and most unique compared to others), it's research-based, drawing on the latest and best empirical studies that look into what works and doesn't work in the world of nonprofit management."
—Vic Murray, professor, School of Public Administration, University of Victoria

"This book is a rarity—a text that can be used both as the focus for academic study and as a source of stimulating ideas for those practitioners who want to explore theories about management and how they can be applied so they can do a better job. Tschirhart and Bielefeld have explained all aspects of nonprofit management and leadership in a way that will stimulate as well as inform."
—Richard Brewster, executive director, National Center on Nonprofit Enterprise, Virginia Tech University

" Managing Nonprofit Organizations presents a comprehensive treatment of this important topic. The book satisfies the competencies and curriculum guidelines developed by NASPAA and by NACC and would be ideal for instruction. The book maintains its commitment to informing management and leadership throughout the nonprofit sector."
—Jeffrey L. Brudney, Albert A. Levin Chair of Urban Studies and Public Service, Cleveland State University

"This is an important book, written by two of the leading scholars in the nonprofit studies field. Nonprofit managers, board members, funders, educators, and others will find Managing Nonprofit Organizations extremely valuable."
—Michael O' Neill, professor of nonprofit management, University of San Francisco

"Here's the book that my students have been asking for—just the right mix of theory presentation, research findings, and practical suggestions to serve the thoughtful nonprofit management practitioner. It will inform, instruct, and ultimately, inspire."
—Rikki Abzug, professor of management, Anisfield School of Business, Ramapo College

PART ONE
UNDERSTANDING, ENVISIONING, AND CREATING

CHAPTER ONE
UNDERSTANDING NONPROFIT ORGANIZATIONS

It all starts with the mission. Nonprofit organizations have a distinct mandate to be good stewards of the resources they receive toward the pursuit of their mission, whether those resources come in as philanthropic dollars, government contracts and grants, membership dues, or earned income through revenue-generating activities. In this book we focus primarily on how nonprofits pursue their missions in the general social, cultural, legal, historical, and economic context of American life. We offer some examples from other countries and believe much of what we offer is applicable to international contexts. Still, this is a book about leadership and management and thus needs to be embedded in a particular place and time.

The importance of context becomes clear when we look at the competencies proposed in November 2011 for nonprofit managers and leaders by the Non-Profit Management Education Section of NASPAA (National Association of Schools of Public Affairs and Administration). Members of this NASPAA section suggest that students pursuing nonprofit careers should be able to apply knowledge and understanding of

1. The history, values, ethics, and philosophies of nonprofit organizations, and the need for transparency in nonprofit management practices to maintain the public trust
2. The current legal frameworks for operating a nonprofit organization, and the process of forming an incorporated nonprofit organization
3. The fundamental principles and concepts of fiscal management, revenue generation, and fundraising, and the ethical imperative to be a good steward of the financial resources of the nonprofit sector
4. The leadership challenges of the sector as they relate to the strategic management of nonprofit organizations, which requires integrating the roles, responsibilities, and relationships of the board of directors, the executive director, the employees, the volunteers, and all stakeholders in meeting the mission of the organization
5. The human resource and volunteer management principles necessary to manage a nonprofit organization’s core services and functions
6. The standards for accountability, performance measurement, and program evaluation, and the appropriate techniques for using both quantitative and qualitative methods to measure the performance of nonprofit organizations

The contents of this book can serve as a foundation for these six competency areas. We go beyond building knowledge and understanding in each area and add additional topics to enhance leadership and management capacity. To orient readers and provide a roadmap of what is to come, we offer a quick overview of each part and chapter.

A Roadmap Through the Chapters

Our comprehensive approach to excelling at managing and leading nonprofits is built around competency and curriculum guidelines developed by NASPAA and by NACC (Nonprofit Academic Centers Council). A summary of the NACC guidelines appears in the Appendix, where they are mapped to the chapters in this book. The six NASPAA competency guidelines have been given earlier in this chapter. Both NASPAA and NACC recognize the importance of understanding the historical development of the nonprofit sector and its values base. These issues are touchstones for our chapters. We discuss how ideas about specific management and leadership topics evolved over time and whether or not they are backed up by theory and empirical evidence. We repeatedly return to the ways in which values influence management and leadership decisions as well as the behaviors of board members, donors, staff, volunteers, and others, and how all this affects the effectiveness of a nonprofit.

As a social psychologist and a sociologist, we are steeped in our respective disciplinary traditions. However, we draw from additional disciplines as well to introduce readers to source documents and thought leaders for the ideas in the book. All our topics and recommendations for practice are grounded in the academic literature. In choosing our main examples we made sure that readers would have enough background information and in some cases even videos for a further exploration of these cases. We also provide additional learning tools in the form of questions for discussion and exercises at the end of each of the main content chapters.

In Part One, we discuss understanding, envisioning, and creating nonprofit organizations. In Chapter One, after this introduction to the book, we give a general overview of the nonprofit sector. In Chapter Two we explore ways to consider the effectiveness of nonprofits and encourage ethical behavior among those working within them. We look at multiple dimensions of organizational effectiveness: goal achievement, resource acquisition, health and efficiency of internal processes, stakeholder satisfaction, and ability to learn and adapt. In Chapter Three we examine topics important to those interested in establishing a nonprofit organization and laying an effective groundwork for future action. We show the many different origins of nonprofits. Drawing on the entrepreneurship literature, we consider how people, capital, and opportunity come together in nonprofits to deliver social value. We also discuss how to make the case for a new nonprofit, including writing the business plan. Chapter Four covers options for organizational structure. We look at formalization, complexity, and other structural elements that influence information processing, and we consider possible structural deficiencies.

In Part Two we turn to strategizing, resourcing, and aligning, because throughout their existence nonprofits should have a mission and a vision and should acquire and manage resources to pursue them. Chapter Five covers the formulation of strategy. Topics include the general strategic orientations that nonprofits adopt and the strategic planning process. We also consider the emergence of strategies in nonprofits. Chapter Six covers resource acquisition. In this chapter we examine the variety of revenue sources employed by nonprofits, including grants, gifts, and earned income. We discuss philanthropy, addressing types of gifts and donors, as well as fund development and grant proposal writing. Chapter Seven reviews financial stewardship and management. We outline best practices for policies, accounting, budgeting, banking, borrowing, financial risk management, auditing, and financial analysis. Chapter Eight provides knowledge and tools for effective marketing. We cover the philosophy of and orientations to marketing, marketing planning, and branding. In addition we explore options for the pricing, promotion, and distribution of goods and services.

In Part Three we focus on human resources and discuss leading, managing, and delivering the mission. Chapter Nine covers boards and the broader topic of governance. We discuss the responsibilities of boards, roles of executive directors in relation to boards, determinants of board effectiveness, options for board configurations and composition, and tools for facilitating governance and managing conflict. Chapter Ten adds leadership and executive directors to the mix. We explore the basis of leadership and the responsibilities of executive directors. We also consider nonprofit founders, leadership transition, and leadership development. In Chapter Eleven we turn our attention to strategic human resource management. We look at ways to measure and build human resource capacity. We then look at human resource management through the stages of initial involvement, development, maintenance, and separation. As a follow-up to Chapter Eleven, in Chapter Twelve we explore performance as determined by ability and motivation. We offer tools to increase ability and to enhance motivation to perform.

Our final section, Part Four, covers evaluating, connecting, and adapting the nonprofit. We begin with program evaluation in Chapter Thirteen. We see an effective program evaluation process as key to accountability management. We review how to prepare for evaluation, choose an evaluat...