Introduction to Nonprofit Organizations Midterm
Cons of Transactional Leadership (associated with Management)
Resentment may build among subordinates Workplace morale may eventually suffer
Characteristics of a 501 (c)(4)
Promote social welfare Are often thought of as advocacy organizations Can engage in lobbying activities without restriction, so long as it pertains to the organization's mission Can donate time/money to political campaigns Are tax-exempt, but gifts to them are not tax-deductible
Advisory Boards
Provide advice to the leadership of the agency; have no legal authority over the organization's operations
Characteristics 501(c)(3)
Their purpose must fit into one of eight categories: 1. Charitable 2. Literary 3. Religious 4. Testing for public safety 5. Educational 6.Nat'l/int'l amateur sports 7. Scientific 8. Prevention of cruelty to animals/children Are also subdivided into Public Charities and Private Foundations
How many registered Nonprofit Organizations are there in the United States (as of 2017)?
There are between 1.5 and 2 million
501(c)(3) Private Foundations
Usually receive funding from one source (i.e. one wealthy individual or one wealthy family) Gifts are tax-exempt and tax-deductible up to 30% of donor's income A small excise tax is charged on investment earnings No lobbying allowed Some are funding intermediaries (i.e. Community Foundation of Greater Memphis)
McGregor's Theory X and Theory Y
Workers are either lazy and uninterested in the needs of the organization, thus needing more supervision and direction from the manager(X), or Workers are self-motivated and self-directed, thus able to be given more autonomy and more responsibility (Y)
Examples of Situational theories
Workplace culture personalities
501 (c)(5) Organizations
labor organizations (unions), agricultural organizations
Situational theories
leadership suggest that leadership styles employed within a particular organization should be decided upon after assessing the environment of the workplace
Well-run organizations need both sound __________ and sound __________
management and leadership
501 (c)(7) Organizations
social/recreational clubs (Greek sororities/fraternities, country clubs, hobby clubs)
Leadership Styles
Authority-Obedience style Country Club style Impoverished style Team style
Types of Volunteers
Spot volunteers Episodic volunteers Regular volunteers Marginal volunteer Virtual volunteer
501 (c)(6) Organizations
business leagues, chambers of commerce
What a Nonprofit Organization is/are Not...
"mom-and-pop" organizations. Are not all organizations that don't earn profits. Many DO earn profits! Not all employees work for free. employees are not all poorly paid. Many employees earn wages comparable to their counterparts in for-profit organizations.
Hybrid Boards
A mix of elected, self-perpetuating and appointed members
How many people are employed by Nonprofit Organizations in the United States?
About 11.5 million people (third behind retail trade and manufacturing).
Transactional Leaders
Are Authoritative Are usually sticklers for following rules Tend to be distant, cold Rarely fraternizes with his/her subordinates
Characteristics of a Nonprofit Organization:
Are tax-exempt Are owned by "the people"; when organization goes out of business, organization must be handed over to someone else to run as a NPO Generate revenues in a variety of ways over and beyond fees for service/fees for products Most are mission-driven, concerned with bringing about social change, improving quality of life, etc. Most are concerned with staying true to the mission, but also pay attention to the "bottom line" Most are accountable to multiple audiences, including boards of directors, donors/funders, clients, volunteers
Examples of Familiar Private Foundations
Bill and Melinda Gates Foundation Ford Foundation Kellogg Foundation Annie E. Casey Foundation Hyde Foundation Grizzlies Foundation Poplar Foundation
Similarities between Nonprofit Organizations and For Profit Organizations
Both are concerned with delivering good service or a good product Both need effective, motivated employees and/or volunteers Both need competent, skilled management Both should value a measure of transparency in their business practices
Who Needs Volunteers and Who Doesn't?
Bringing on volunteers may seem like a cost-saving measure for a Nonprofit, but that is not always the case. There can be significant costs associated with recruiting, training and supervising volunteers Volunteers can, however, strengthen connections with clients and donors, and can open doors to new funding sources.
Pros of Transformational or Charismatic Leaders
Can motivate, inspire people Are "people persons" Are engaging, but maintain an air of mystery (rarely get too close to anybody)
Legal Responsibilities of Board Members
Care - be interested in the operations of the agency, that decisions made are being done in the best interest of the agency and clients; stay engaged; regularly attend meetings Loyalty - don't join the board for personal or financial gain; avoid "conflict of interest" situations Obedience - make sure the agency adheres to all applicable laws and sticks to its stated mission
501 (c)(3) Organizations
Charitable organizations that are tax-exempt and gifts to them are tax-deductible. Can be Public Charities or Private Foundations
Religious charity
Churches are classified as 501(c)(3) charities, but cannot accept government funding Churches that wish to receive gov't funding must create a 501(c)(3) organization separate from church operations, and operate as a faith-based organization that does not discriminate
Herzberg's Hygiene Factors
Company policies/administration Relations with supervisors Relations with co-workers Working conditions Compensation Status Security
For Profit Organization
Conduct business for the express benefit of making money
So What Does the Ideal Board Look Like?
Constructive partnership between board and ED The board helps the organization stay mission driven They are strategic thinkers They ask good questions of the organization's management/staff to understand the organization's work Independent-minded, putting the best interest of the organization above all else Transparent Operate with integrity Support the organization financially, and commit to tapping into personal/professional networks to bring in financial resources Results-oriented Commits to promoting good governance and oversight for the organization Committed to continual learning - about the organization, about new ways to govern, about new legislation affecting the organization, etc. Willing to re-energize itself, though membership turnover, recruitment of diverse new members, etc.
Ethical Responsibilities of Board Members
Contribute to the work of developing a clear mission for the organization Be aware of the agency's programs and/or services, and endorse or support them! Closely monitor the agency's fiscal health, and call attention to problems when you recognize them Hold the agency's staff accountable for their work by helping to establish performance measures and reviewing them regularly
A Strong Board...
Creates and implements policies for the organization Makes sure the organization's work lines up with the stated mission Hires/fires the organization's Executive Director Monitors the organization's budget Act as chief spokespersons for the organization Takes a lead role in fundraising for the organization Makes recommendations on staffing decisions
Strategies for Effectively Managing Volunteers
Develop good volunteer job descriptions Develop formal volunteer policies Develop a budget to manage the volunteer program Funds for adequate training, equipment, transportation, supervision, etc. Recruit and hire volunteers similarly to how paid staff are recruited and hired Provide training for volunteers Set clear goals, evaluate performance and recognize the achievements of volunteers
Types of Nonprofit Boards
Elected Boards Self-Perpetuating Boards Appointed Boards Hybrid Boards Advisory Boards
Self-Perpetuating Boards
Existing board members recruit new people to serve; existing board members vote to accept the recruited prospects
Faith-based charity
Faith-based organizations are 501(c)(3) charities and can accept government funding Cannot discriminate if they receive gov't funding Faith-based charities are not affiliated with any specific congregation
Leaders
Focus on vision; focus on change for the organization; TRANSFORMATIONAL
501(c)(4) Organizations
Further the common good and general welfare of the people
501(c)(3) Public Charities
Gifts are tax-exempt and tax-deductible up to 50% of donor's income Receive support from a variety of donors and government funding Some provide direct services to clients, while some are "funding intermediaries" (i.e. United Way, community foundations) Not allowed to support political candidates, but limited lobbying is allowed
Volunteers in Nonprofit Agencies
Growing numbers of Nonprofit Agencies are relying upon a mix of paid staff and volunteers to perform the work of their organizations Growing numbers of Nonprofit Agencies are requiring their volunteers to have specialized skill sets, similar to those of paid staff members Volunteers are motivated by the agency's mission, or want to advance a cause, or want to repay society for some benefit they've (the volunteer) has received ("paying it forward")
Transformational Leaders
Have vision that is unconventional, but acceptable to people Have unconventional ways to achieve the vision Are willing to sacrifice personally in order to live out the vision Are confident that his/her approach or proposals are the right way to achieve the vision Are persuasive, even if not in a position of authority when promoting the vision Know how to assess the mood and sentiment of his/her audience when deciding how to articulate the vision effectively
Team style
High on production, high on relationships
Authority-Obedience style
High on production, low on relationships
Maslow's Hierarchy of Needs
Human needs progress from lower levels to higher levels as the lower levels are met. Each level builds upon the last one: Physiological needs Safety needs Social needs (love) Self-esteem needs (ego) Self-actualization needs Following this theory, managers understand that people come to the workplace each day at varying levels of the needs hierarchy, requiring the manager to know how to help them address these needs to get them to a level where they can be most productive.
Examples of better names for the Nonprofit Sector?
Independent sector Third Sector Charitable Sector Voluntary Sector Tax-exempt Sector Civil Society Sector
Marginal volunteer
Is pressured or strongly encouraged to participate in activities
What is key in a Nonprofit Organization?
Leadership
Country Club style
Low on production, high on relationships
Impoverished style
Low on production, low on relationships
Regular volunteers
Makes a commitment to an activity and gets a sense of gratification and accomplishment from the work
So How Do Managers Effectively Manage Nonprofit Staff?
Managers should be reflective and proactive about their own motivation Managers should be aware that what motivates them is not necessarily what will motivate others Managers should have realistic expectations about the extent to which they can influence the motivation of others Managers should participate in setting clear and challenging goals Managers should think about the salience of various rewards (what works for one may not work for others) Mangers should be honest with people about what rewards are possible and what rewards are not Managers should treat people equitably and fairly Managers should make the work satisfying and meaningful Managers should think about the life stages of the people they work with and offer appropriate support
Realities are...
Many Nonprofit boards are guided by their strong ED Many boards often defer to the ED's opinions and thoughts when determining the direction of the organization Boards can easily become "rubber stamp bodies" if strong EDs don't make a special effort to find ways to keep the board engaged
Characteristics of a For Profit Organization
Many are property of the organization's owners and/or stockholders Most measure success by how much money they make If organization goes out of business, its assets can be liquidated and the proceeds distributed among the owners and/or stockholders
Herzberg's Motivator Factors
Motivators bring satisfaction to workers and hygiene factors bring dissatisfaction to workers. Achievement Recognition the work itself Advancement Growth Responsibility
Familiar 501(c)(4) organizations
NAACP National Rifle Association AARP Rotary clubs Kiwanis clubs Volunteer fire companies PACs and Super PACs
Paid Staff and Volunteers
Nonprofit agencies often have a mix of Paid Staff Members and Volunteers that do the work of the organization on a day-to-day basis Paid staff are expected to produce results for the organization, and are paid for their work. Volunteers are expected to produce results for the organization as well, but with varying levels of engagement
Who runs Nonprofit Organizations
Nonprofit organizations are governed by boards, which are most often made up of volunteers
Nonprofit Organization
Organization that conducts business for the benefit of the general public without a profit motive
Spot volunteers
Participate in activities as a one-time commitment
Virtual volunteer
Participates from a distance using electronic technology
Episodic volunteers
Participates in activities from time to time
Appointed Boards
People are asked to join a board by an authority figure, such as the POTUS, governor, mayor, etc. or by a representative from the entity that created the organization (i.e. the Catholic Diocese appointing a person to serve on the Catholic Charities Board of Directors)
Elected Boards
People are elected to the board by the general membership; prospective board members can either self-proclaim their interest in running for a seat, or people can nominate someone to run for a seat on the board.
A Strong Executive Director...
Probably has more informed knowledge about the day-to-day operations and inner-workings of the organization Is likely to be more of an expert than board members on whatever the organization is providing Is likely to be "the face of the organization" more so than board members Sets meeting agendas; guides meeting discussions Introduces and promotes policy decisions Responsible for the supervision of the organization's staff members (including hiring and firing of staff)
Pros of Transactional Leadership (associated with Management)
Productivity may be high Roles, boundaries, and expectations are well-defined
Examples of Familiar Public Charities
Salvation Army MIFA Catholic Charities American Cancer Society Ballet Memphis Goodwill Industries St. Jude's Children's Research Hospital Friends for Life CBU/Rhodes College/LeMoyne-Owen College UNICEF Amvets Dress for Success
Popular Theories of How to Effectively Manage Workers
Scientific Management - people operating much like machines Hawthorne experiments - when workers are closely supervised, productivity goes up; when they are not closely supervised, productivity goes down
The Board is best utilized when it:
Sets the agenda and priorities for the organization Focuses on the results the organization is trying to achieve Sets boundaries the Executive Director should maintain to achieve the results Decides what responsibilities are given to the Executive Director Decides on board membership criteria, when applicable
Spirit of Cooperation...
Some organizations work best when the working relationship between boards and EDs is more of a partnership than that of employer/employee Both can have joint responsibility for Overseeing the budget Setting long-term goals for the organization Thinking outside the box when setting goals and priorities
What tasks can or should be delegated to Volunteers?
Something performed periodically, perhaps once a week Something not requiring specialized training or expertise of paid staff... ...or when something requires a specific skill set (that a volunteer may possess) Something where there is no in-house expertise among the paid staff Something that may be performed virtually or through computer technology
How Did NPOs Come to Be
The 19th century saw a number of groups/associations forming to address social needs in America Industrial revolution of the late 19th century saw many people becoming wealthy Many wealthy people adopted the philosophy of "giving back" as a way for the rich to show gratitude for all they've earned Andrew Carnegie helped define the difference between Charity, Philanthropy and Volunteerism The 1960s saw a great expansion of the federal government, thus an expansion of the nonprofit sector
What about the Government?
The government sector, a.k.a. the public sector, serves the public good by using public money (taxes) to create laws, policies and services to benefit every citizen of the country. The public sector often calls upon the nonprofit sector to help provide or administer some of the services and programs created by the government.
Cons of Transformational or Charismatic Leaders
To lose their air of mystery can result in a loss of effectiveness Organizations that become to dependent on these leaders may become adrift when these leaders move on
Charismatic Leaders are similar in definition to __________
Transformational Leaders
What amount and percent of wages earned in the United States are earned by Nonprofit Organizations?
about $668 billion in wages, nine percent of wages earned in the United States
Managers
ad people; concerned with making things work properly; TRANSACTIONAL
The Executive Director is best utilized when:
he/she focuses on developing strategies to promote the organization's mission he/she makes staffing, programming decisions that fit with the mission Communicates to the board about the work going on within the organization
Hawthorne experiments
when workers are closely supervised, productivity goes up; when they are not closely supervised, productivity goes down