Achieving Success in Nonprofit Organizations

Timothy J. Kloppenborg, Laurence J. Laning

• Publisher: Business Expert Press
• Year: 2014
• Print ISBN: 9781606497289
• eBook ISBN: 9781606497296
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

This book is an essential tool to help you grow with yournonprofit organization. Whether you are an executive director, manager, board member, pastor, or key volunteer, the details here will help you achieve so much more.The four overarching areas of what the authors term a"virtuous cycle in nonprofit organization success"—livingthe mission, making good decisions, getting things done, developing your team—emerged from literature searches, focus groups, and surveys to discover objectively whatcritical skills and knowledge are most useful to leaders ofnonprofit organizations.Inside, experts contribute individual chapters in each ofthese four areas. This book can be used as a reference forspecific skills and knowledge in any of these areas. It canalso be used as a text since it covers 16 specific chapterswithin the four major sections and each chapter has a majorcase study, assessment questions, and summaries ofkey concepts.

Chapter 1

Introduction

Over 2.3 million nonprofit organizations operate in the United States.1 They range from neighborhood organizations that meet a few times per year to major universities and foundations that have billions of dollars in assets.

This book is focused on the topics and skills that leaders of nonprofit organizations in the United States have indicated in recent research (conducted by the authors) that they need to understand and master, to lead their organization to success as defined by their organization’s mission.

Rather than the ­co-­authors of this book selecting topics that we thought were important for leaders of nonprofit organizations, we elected to do the research and ask the leaders of nonprofits themselves what topics they wanted to know more about. This is an example of ­data-­based research (see Chapter ­7—­Making Good Decisions Using Data).

Organization of Book

Our research (described in Appendix A) arrived at four strong factors that form the major sections of this book. Each factor has multiple related elements which form the chapters. These four factors are illustrated in Figure 1.1 which is a unifying graphic for this book.

Figure 1.1 A virtuous cycle in nonprofit organization success

These four factors form what we termed as a “Virtuous Cycle in ­Nonprofit Organization Success.” As you do things well in one section/factor, it helps to do other things well in other sections/factors. Instead of the traditional negative viscous cycle, this is a very positive or virtuous cycle. In Figure 1.1, the bold arrows show the most frequent direction of influence from one section to another. But also note that each section/factor has some influence on each other section/factor.

Living the Mission is the focus of Section 1. It explains how to develop and refine your organization’s mission over time and to work well with your board. It also explores in depth the key topics of ethics, values, and governance that living a mission must entail. The concluding chapter of this first section develops the critical concept and methods of how to effectively engage with your communities.

Section 2 concentrates on Making Good Decisions in running a nonprofit organization. The relevant topics here are how to create successful new products and services through innovation, how to use quantitative and qualitative data to make good decisions, how to establish and manage an excellent portfolio management process, and how to leverage information technology to run an effective organization.

Section 3 illustrates Getting Things Done with excellence. This section includes chapters on managing the financial assets of an organization, introducing and managing change in an organization, and managing projects well which includes how to effectively plan projects and how to sponsor projects successfully.

Section 4 focuses on the critical tasks of Developing Your Team of people. Topics in this section include human resource management where items like performance reviews, hiring, retention, and succession planning are covered. Other topics are total quality management and empowerment, using a ­strengths-­based approach for managing your ­people, and key insights and learning from ­employee-­owned enterprises that are relevant for all nonprofits.

Nonprofit Organizations in the United States of America

It is helpful to understand some basic statistics for what the population of nonprofit organizations looks like in the United States. It provides an important perspective and magnitude of the nonprofit sector in American life.

According to the latest Nonprofit Almanac 2012 published by the National Center for Charitable Statistics,2 some basic statistics on nonprofits in the United States of America are as follows:

1. There are 2.3 million nonprofit organizations operating in the United States.

2. There are 1.54 million nonprofit organizations registered with the Internal Revenue Service (IRS). This number has grown 24% over the past 10 years (beginning in 2010, only nonprofit organizations with $50,000 or more in gross receipts are required to file with the IRS).

3. Of the 30 types of nonprofits in the United States, public charities are the largest number with 956,000. Public charities represent arts, education, health care, human services, and other types of organizations to which donors can make tax deductible donations.

4. Most nonprofits are small. Only 4% of all nonprofits have $10 ­million or more in ­expenses—­primarily hospitals and higher education institutions. 75% of public charities report less than $100,000 in gross receipts.

5. In 2010, 9.2% of all wages and salaries in the United States came from nonprofit organizations.

6. Nonprofits share of the gross domestic product (GDP) was 5.5% in 2012.

7. 26.5% of all Americans over the age of 16 volunteer for a nonprofit organization.

Key Leadership Challenges for Nonprofit Organizations

Nonprofit organizations present unique leadership challenges. Many of these challenges will be covered in significant depth in each chapter. But it is useful to identify the major unique challenges that confront the leaders in nonprofit organizations. Four of the key challenges are discussed as follows.

First, many nonprofit organizations have limited number of staff resources as well as limited financial resources from which to operate. They must have a scarcity mentality to make ends meet and keep the doors open.

Second, volunteers play a vital role in running many nonprofit organizations. Recruiting, training, and retaining volunteers are no small tasks. Also it is very hard to “fire” a volunteer when someone is just not ­working out.

Third, the organizational structure of many nonprofit organizations is complex and includes a governing board and a myriad of key stakeholders. Nonprofits do not have the profitability yardstick companies have, so other considerations such as mission take on more importance.

And finally, there is a saying that “no margin means no mission.” This means that even though a nonprofit organization’s primary goal is not to make money, if a nonprofit does not generate adequate cash and revenue, it will not be able to fund and operate its primary mission. This is often called a dual goal strategy.

Key Features of This Book

This book is written for nonprofit leaders and practitioners working actively in the field. These leaders tend to be well educated within their area, bright, and highly motivated. However, many have not had formal training in business, management, or leadership. The intent of this book is to provide in a concise format the skills and knowledge these leaders most need. To get the most from this book, please take advantage of these key features:

• Each chapter i...

Table of contents

• Cover
• Title
• Half Title
• Copyright
• Dedication
• Abstract
• Contents
• List of Figures
• List of Tables
• Preface
• Chapter 1 Introduction
• Section 1: Living the Mission
• Chapter 2 Developing and Living Your Mission
• Chapter 3 Noses In, Fingers Out: The Board’s Role in Achieving Success
• Chapter 4 Walking the Talk: Serving Stakeholders with Ethics, Values, and Governance
• Chapter 5 Community Engagement
• Section 2: Making Good Decisions
• Chapter 6 Innovation: Creating New Products and Services
• Chapter 7 Making Good Decisions Using Data
• Chapter 8 Portfolio Management
• Chapter 9 Leveraging Information Technology
• Section 3: Getting Things Done
• Chapter 10 Financial Management
• Chapter 11 Change Management
• Chapter 12 Planning and Managing Projects More Effectively
• Chapter 13 Sponsoring Projects
• Section 4: Developing Your Team
• Chapter 14 Creating Value Through Human Resources
• Chapter 15 Total Quality: Integrating Customer, Employee, and Process Voices
• Chapter 16 A Strengths- - Based Approach for Managing Your People
• Chapter 17 Creating a Sense of Employee Ownership: Lessons From Worker-Owned Cooperatives
• Concluding Comments
• Appendix: Our Research Process
• Index
• Ad