Nonprofit Management

interdisciplinary field of study

"The study of civil society; the dynamics of advocacy, community organizing, & public policy; the political nature of the social sector & the role that non-profits play as places of employment."

social entrepreneurship/social entrepreneur

"social enterprise school" - social entrepreneurship as virtually synonymous with the application of business methods and the generation of earned income. -revenue that is received in exchange for goods & services provided, rather than as gifts. -propose market based solutions to social problems and often emphasize the blurring of the sectors, advancing the idea of the double bottom line & applying it to both businesses & nonprofits. "social innovation school" -view a social entrepreneur as an innovator; a change agent; someone who identifies an opportunity, undertakes direct action to pursue it, & produces change that improves the condition of people & society. -social entrepreneurs might access traditional philanthropy or government funds as well as earned income in order to implement their innovative ideas.

Writing Effective Objectives

(1) To + (2) action verb + (3) specific and measurable result + (4) target date

Is competition among nonprofits organizations an acceptable concept or is it contrary to the values of the sector.

In some cases, nonprofits can help each other, so competition may not necessarily be helpful.

- Content of the 990:

Income by category • Expenses, categorized by functional expense category • Balance sheet • Description of program accomplishments • Certain salary information (public information) • List of certain donors (not public information) • Board List

Why do nonprofit organizations need to be managed?

Increased competition for funding esp. government grants Demand for nonprofit organizations to show measurable results Focus on organizational capacity and sustainability Growth in the nonprofit sector and its assets

impact investors

Individuals & organizations willing to accept lower rates of financial return in exchange for social benefits.

hierarchy of values

Integrity Respect Reciprocity Accountability Financial competence

Level 5: Integrity and the Self-Actualized Nonprofit Organization

Integrity is defined not only as incorruptibility, but as completeness of commitment to ethical behavior With integrity, an organization has an internalized moral code, is able to engage in creative problem-solving, and pursues its mission to the fullest extent possible Attaining integrity relies on achieving financial competence, accountability, reciprocity, and respect Exhibit a stewardship approach to management and administration Stewards place higher value and priority on collectivist rather than individualistic behaviors, that is, on cooperation rather than defection

Questions to Ask Before Starting a Nonprofit

Is there a real need to be addressed? Is somebody already doing what I would like to do? No sense of duplicating an effort that exists Is there an existing agency to address need? Does a support base exists? Is this the right time and place for starting a new organization? How is my timing? is there a true need? Who are the constituents?

Clarify the Organization's Mission, Values, and Vision

Mission "Mission is the psychological and emotional logic that drives an organization" (Phills, 2005, p. 22) It is the organization's self-concept Mission statement explains the reason the organization exists and therefore must be the starting point for strategic planning Characteristics of a mission statement Broad-based, clearly defined, long range, brief, focused, and distinguishes the organization from others Values and vision Vision statement -- a description of an ideal future Values -- principles that the organization holds most important Debate about when vision and values should be articulated in the strategic planning process

Behavior of An Effective Nonprofit CEO

Focus on mission Focus on the board Focus on external relationships Share leadership and empower others Focus on key roles and priorities Use the "political frame" Right person, right time, right place Alignment model (Dym & Hutson, 2005) Founder syndrome and life-cycle theories Executive transitions and leading change

Chapter 7 - What is a strategy?

Focused on the long term, not on the day-to-day A strategy is a plan for pursuing a mission and achieving objectives Strategic planning and strategic management A process that produces product Integrated approach to managing the organization

tax-exempt

A US tax law status. Speaks to the legal status of such organizations & says nothing about what they actually do. Nonprofits are exempt from paying federal income tax & generally from state & local income taxes as well.

civil society

A complex network of voluntary associations, economic groups, religious organizations, and many other kinds of groups that exist independently from the government

institutionally related foundations

A foundation that is a public charity. They solicit & receive gifts from the public, but their support is directed to just 1 organization.

bureaucracy

A large, complex organization composed of appointed officials

Path-Goal Theory

A leader should help elucidate the path for followers to achieve group goals. involves the leader employing particular behaviors in specific situations to increase follower satisfaction and motivate efforts toward task accomplishment. Based on expectancy theory, using combination of: leadership styles Directive leadership (task-oriented) Supportive leadership (relations oriented) Participative leadership Achievement-oriented leadership Subordinate expectations Attitudes of subordinates Acceptance of leader Belief effort will result in achievement which will be valued

philanthropy

A more rational form of long term investment in the infrastructure of society, seen, for example, in gifts made to construct new hospitals, endow universities, or create new charitable foundations intended to exist in perpetuity.

Organizational Founding

A number of ways of founding By an individual entrepreneur Through legislative action Spun off from a larger nonprofit

Identify four major functions that nonprofits perform in relation to government.

Accommodate diversity Undertake experimentation Provide freedom from bureaucracy Attention to minority needs

Level 2: Establishing Accountability

Accountability refers to the ability of nonprofit organizations to establish transparency and trust When organizations follow external controls and even conform to higher standards of accountability, they are less vulnerable to scandal To establish accountability, nonprofits must ask themselves who they are accountable to, for what, and how

Serve and advocate

Add policy advocacy to acquire government resources and to change legislation

Hybrid Governing Boards

Advantages: May combine the responsiveness of elected boards, the stability of self-perpetuating boards, & accountability to an appointing authority - for example, a sponsoring church. Disadvantages: Different interests & loyalties of board members may lead to a stalemate. Ex-officio members may not be fully committed to the organization.

Measuring Performance: Strategies

Balanced scorecard (Kaplan and Norton, 1992) Originally developed for use in the for-profit sector Combines financial data with other considerations Four perspectives -- financial, customer or client, internal business, innovation and learning Dashboard (Paton, 2003) Developed as a balanced scorecard specifically designed for nonprofits Five perspectives -- current results, underlying performance, risks, assets and capabilities, change projects

collective impact

Combined effect of individual impacts (e.g., social, economic, civic, environmental, political conditions)

What are the ten basic responsibilities of the nonprofit chief executives as identified by Richard Moyers?

Commit to the mission Lead the staff and manage the organization Exercise responsible financial stewardship Lead and manage fund-raising Follow the highest ethical standards, ensure accountability, and comply with the law Engage the board in planning and lead implementation Develop future leadership Build external relationships and serve as an advocate Ensure the quality and effectiveness of programs Support the board

Situational Leadership

Different situations require different styles of leadership Proposes that leadership effectiveness depends on the leader's ability to tailor his or her behavior to the demands of the situation, namely, the subordinate's level of maturity Leader must understand their organization and adapt their behavior to fit the situation Leader behavior also depends on "readiness" of the followers

Economic Theories

Failure theories -Market failure Government failure Gap fillers Contract failure Supply-side theories -Entrepreneurship theory: -Entrepreneurs are the social reformers of contemporary society

ensuring an organization's effectiveness in achieving its mission

Finances emphasis on disclosure, compliance, punishment Governance Board especially for internal controls & legal compliance; strategy, performance & impact Performance requires metrics that link goals, strategies & outcomes Mission demonstrate progress toward public purpose

Level 1: Maintaining Competent Financial Management

Financial competence promotes successful budgeting and recruitment/ retention of staff, volunteers, donors, and clients Lack of fiscal competence leads to financial mismanagement, as exemplified by inaccurate financial reporting, excessive executive compensation packages, misuse of donor monies, and poor auditing procedures Financial mismanagement is less likely to occur in organizations that internalize ethics early

social enterprise

Nonprofits that have a social objective, but employ commercial principles in their generation of revenue. The term is generally associated with those who especially advocate organizations operating like a business & undertaking efforts to increase revenues from commercial activities.

social welfare organizations

Orgs that are exempt under section 501(c)(4) whose purpose is to work for social change are referred to by the internal revenue service (IRS) as social welfare organizations. (advocacy organizations)

Measuring Performance: Strategies

Social return on investment Monetizes the social value created by nonprofits Methodology evolved from cost-benefit analysis Produces a ratio that can be used to compare programs against programs Resource intensive and time consuming Blended value Builds on concept of social return on investment and add a third component of -impact on the environment Three measures -- economic value, social value, and environmental value Attempt to define common measures of performance for organizations across all sectors

tax deductible

Something that can be offset against the amount of tax you need to pay. Only gifts or donations to 501(c)(3)s are eligible for this benefit, because 501(c)(3)s are restricted in the amount of lobbying they can do.

low-profit, limited liability company (L3C)

Spans 4 profit & nonprofit sectors. VT & 9 other states intended to pursue social purposes like a nonprofit, but also able to accept investments that provide a financial return at a rate below what would be expected from a purely commercial entity.

Discuss the differences between a for profit business providing a good or service to its customers and a non-profit providing a good or service to its customers.

primary role of nonprofit organizations: -Social institutions responsible for preserving social values (emphasizing process) -Social enterprises responsible for achieving a defined mission (emphasizing results) Nonprofit Management as a Distinct Profession -Organizational trade-offs between mission, acquisition of resources, and strategy -Complex relationships among various stakeholders -Double bottom line of social and financial results -Addressing problems that are exceptionally difficult and intractable

benefit corporations

purpose of a benefit corporation includes creating general public benefit, which is defined as a material positive impact on society and the environment. shareholders judge performance based on how a corporation's goals benefit society and the environment

private foundations

receive support from a limited number of individuals or corporations and investment income

Identify the Strategic Issues or Strategic Questions

Strategic issues -- areas in which the organization needs to take action Four types of strategic issues (Bryson, 2004) Issues that go to the heart of the organization's vision and goals, which involve some fundamental change Issues that require no action at present but that must be continuously monitored Issues that are on the horizon and likely to require some action in the future and perhaps some action now Issues that require an immediate response and therefore cannot be handled in a routine way

What is the difference between strategic and operational planning?

Strategic planning the process of developing a mission and long-range objectives and determining in advance how they will be accomplished Long range objectives (more than 1 year) Upper level management Corporate and business planning levels Operational planning the process of setting short-range objectives and determining in advance how they will be accomplished Short-range objectives (less than 1 year) Middle and lower level managers Functional planning level

Why is strategic planning important for a nonprofit organization?

Strategic planning is the process used to seek the strategic fit between the mission of an organization and its internal strengths and external opportunities Time for board members to consider their dreams and visions for an organization and to articulate the essence of its values Strategic planning must fit into an organization's culture Strategic planning is an organizational, political, and rational process it examines all aspects of an organization, involves key internal and external stakeholders

What are the reasons to resist strategic planning and how can an organization overcome these resistances?

Strategic planning many not be the best first step for an organization whose roof has fallen—keeping in mind that every crisis should be managed strategically For example, organization may need to remedy a cash-flow crunch before undertaking strategic planning Organization may need to postpone strategic planning until it fills a key leadership position If the organization lacks the skills, resources, or commitment of key decision makers to engage in deliberative strategic planning, or implementation of the results is extremely unlikely, strategic planning will be a waste time

IRS Form 990

Three forms: -IRS Form 990-N (e-Postcard). Receipts $50,000 or less -990EZ (receipts between $200,000 and $500,000) -Form 990 receipts more than $500,000 Watchdog organizations Guide Star, BBB Wise Giving Alliance, Charity Navigator, American Institute for Philanthropy, Wall Watchers Base their evaluation on financial, not program, effectiveness

What are the different traditional leadership theories?

Trait Approach Leadership Styles/Leader Behaviors Situational Leadership Contingency Approach Path-Goal Theory

Transactional Leaders

Transactional leaders emphasize instrumental values, such as responsibility, fairness, and honesty, which make routine interactions go smoothly. Transactional leaders take a utilitarian approach, judging the morality of actions based on their outcomes. Transactional leaders are concerned with protecting their interests rather than in promoting the interests of the group. Transactional leadership has both active and passive elements: Active transactional leaders engage in contingent reward and management-by-exception. Passive-avoidant or laissez-faire leaders wait for problems to arise before taking action, or they avoid taking any action at all

faith based organizations

church related service organizations. Under Bush, these groups receive federal funding to help with social activities in communities

B corps

for-profit entities that consider society and the environment in addition to profit in their decision making process. differ from traditional bc of purpose, accountability, and transparency. Their purpose is to create general public benefit, positive impact on society and/or the environment.

public charities

funded by the public at large rather than a limited number of donors

Nurture nonprofit networks

help their peers succeed, building networks of nonprofit allies and devoting remarkable time and energy to advancing their fields

intrapreneur

lead change within existing organizations.

Nonprofits and Public Policy

-Nonprofits are affected by public policy, such as laws which encourage use of nonprofit services providers. -Nonprofits influence public policy through efforts such as advocacy and lobbying . -Nonprofit are subject public policy, such as state and federal regulations regarding the handling of donor funds.

public-serving organizations

1 of 2 categorizations of nonprofits developed by Lester Salamon. Churches, charitable & social welfare organizations, as well as foundations & funding intermediaries are examples of the 1st category.

member-serving organizations

1 of 2 categorizations of nonprofits developed by Lester Salamon. These exist primarily to secure benefits for the people who belong to them or who support them thru dues, membership fees or other contributions. They include social & fraternal organizations, business & professional associations, & labor unions. These organizations are tax exempt, but not eligible to receive tax deductible gifts.

What are the 6 practices of high-impact nonprofits?

1. Advocate& serve. 2. Make markets work. (Some have corporate partnerships or earned income. Some rely primarily on philanthropy. All have used market forces & have used private sector methods in their work.) 3. Inspire evangelists. 4. Nurture nonprofit networks. (Form partnerships with other nonprofits as well as government.) 5. Master the art of adaptation. (Adjusting strategies to environmental changes.) 6. Share leadership. (CEOs, empower others, & delegate authority within their organizations.)

Form 990

1. Annual information return filed with IRS Principal way IRS gathers information about tax-exempt organizations 2. Not a "tax" return - no tax due Separate form (990-T) used to report taxable income 990-T publicly available for returns filed after 8/17/06 3. Report financial, programmatic, compensation information 4. Not just for numbers Ubiquitous "describe" and "explain" Schedule O - Required 5. Requires detailed self-reporting on Activities in furtherance of exempt purposes Changes in activities and governing documents Governance, financial transactions among insiders, compensation Community benefit, bonds and joint ventures Policies and procedures within the organization Disclosure of key governance, financial and mission policies 6. Publicly available - sought by and relied on by media, state regulators, donors www.guidestar.org

Balanced Scorecard

1. Financial Perspective - including financial performance indicators 2. The Customer or client perspective -including measures of customer satisfaction 3. The Internal Business Perspective -including measures of operational efficiency & quality 4. The Innovation & Learning Perspective -including measures of organization's ability to adapt to changes in environment

Make markets work

High-impact nonprofits have learned that tapping into the power of self-interest and the laws of economics is far more effective than appealing to pure altruism NPs leverage markets by partnering with corporations to garner additional resources for their cause Some NPs run their own small businesses, generating income that helps fund their programs

Explain the different types of theories

Historians - NP sector evolved from historical forces and events. - Rebellion again the authority of British monarch. -distrust of government, voluntary associations, religion, First Amendment rights, population diversity, income tax and tax deductions, shifts in public policy Sociologists—focus on relationship between among people in groups---offer important insights on the NP sector. - socialization, reinforcing norms and values, social capital, nonprofits as mediating structures Political Scientists—NPs role in supporting democratic traditions and in terms of power relationship between civic and government - Accommodating diversity -Innovation theory -Freedom from bureaucracy -Attention to minority needs Economists—analyze the work of the market -private versus public goods, externalities, market and government failures, nonprofits as gap fillers, supply-side theories

National Taxonomy of Exempt Entities (NTEE)

Maintained by the National Center for Charitable Statistics (NCCS). Divides the universe of nonprofit organizations into 26 major groups under 10 broad categories. These categories are based on organizations' purposes, activities, & programs and are similar to the industry • Describe fully the steps involved in the strategic planning process classification codes used to group for profit companies. (text - p. 27).

Master the art of adaptation:

Responded to changing circumstances with one innovation after another Combine creativity with disciplined systems for evaluating, executing, and adapting ideas over time

nongovernmental organizations

Those nonprofits that work internationally. Reflects in part the reality that many such organizations are performing government like functions in the countries they serve, & that most receive a substantial portion of their revenue from government services.

Preparing to Plan

Main questions What is the purpose of the planning effort? What will the planning process be? What reports will be produced, and when? Who will be involved, and what are their roles? What are the resources available? Clarifying the limitations and boundaries to planning Reviewing the nonprofit's mission and values

voluntarism

Also called volunteerism. Voluntary action for the public good. Implies a more hands on role.

independent sector

An alternative to nonprofit; nonprofits are financially dependent on resources derived from both government & private donors & are subject to an increasing array of state & federal law, so independence would not seem to capture their essence. It is also the name of the principal organization representing the interests of nonprofits in Washington, DC - Independent Sector.

Level 4: Instilling the Value of Respect

An organization is respected by others and has respect for itself and others. Employees feel worthwhile and appreciated. Donors, volunteers, and clients are treated as integral members of the team. Proper training, assignment, risk management, and motivation are crucial elements in respecting everyone associated with a nonprofit Clear job descriptions that explain the work needed, the skills required, the tasks involved

Assessing the situation

Analyzing the environment 1.Assessment of the present strategy based on performance 2.SWOT analysis 3.Assessment of competitive strength and identification of competitive advantage 4.Conclusions concerning competitive position 5.Determination of the issues and problems that need to be addressed through the strategic planning process

Inspire evangelists

Build strong communities of supporters who help them achieve their larger goals They value volunteers, donors, and advisers not only for their time, money, and guidance, but also for their evangelism

What are the 12 principles of an empowered board? Describe governance through the organizational life of cycle.

Constructive partnership Partnership with the CEO , established through trust, open communication, respect Mission driven Uphold mission Articulate vision Strategic thinking Honing the organization's direction Strategic planning Intentional board practices Fulfill essential governance duties and to support organizational priorities Culture of inquiry Institutionalize a culture of inquiry, mutual respect, and constructive debate that leads to sound and shared decision making Independent mindedness Do not allow their votes to be unduly influenced by loyalty to the CEO Ethos of transparency Stakeholders have access to appropriate and accurate information regarding finances, operations, and results Compliance with integrity Use mechanism such as independent audits, to ensure accountability and sufficient controls; to deepen their understanding of the organization; and to reduce the risk of waste, fraud, and abuse Sustaining resources Results oriented Linking budgeting to strategic planning, they approve activities that can be realistically financed with existing or attainable resources Measure the organization ' s progress toward mission goals and evaluate the performance of major programs and services Continuous learning Increasing knowledge and skills Exploring alternative methods Revitalization Energize themselves through planned turn-over thoughtful recruitment, and inclusiveness

Approaches To Strategic Issue Identification

Direct approach Planers go straight from a review of mandates, mission, and SWOTS to the identification of strategic issues Suitable if: There is no agreement on goals, or goals on which there is agreement are too abstract to be useful There is no preexisting vision of success, and developing a consensually based vision will be difficult There is no hierarchical authority that can impose goals on the other stakeholders The environment is so turbulent that development of goals or visions seems unwise, and partial actions in response to immediate, important issues seem most appropriate Goals approach An organization first establishes goals and objectives for itself and then goes on to identify issues that need to be addressed to achieve those goals and objectives, or else goes straight to developing strategies Vision of success approach Organization develops a best picture of the organization in the future, as it fulfils its mission and achieves success The issues involve how the organization should move from the way it is now to how it would look and behave based on its vision of success Indirect approach Identify strategic issues and is useful when major strategic redirection is necessary but many members of the planning team and organization have not yet grasped the need Action-oriented strategy mapping Involves creation of word-and-arrow diagrams in which statements about potential actions the organization might take, how they might be taken, and why, are linked by arrows indicating the cause-effect or influence relationships between them The approach is useful when participants are having trouble making sense of complex issue Alignment approach Clarify where there are gaps, inconsistencies, or conflicts among the various elements of an organization's governance, management, and operating policies, systems, and procedures Issue tensions approach There are four basic tensions around any strategic issue. Tensions involve human resources, and especially equity concerns; innovation and change; maintenance of tradition; and productivity improvement System analysis-used to help to discern the best way to frame issues when the issue area may be conceptualized as a system

Timeline for the Study of Nonprofit Management

Early management theorists did not distinguish between management in business, public, and nonprofit sectors 1960s -- recognition of differences between business and public management 1970s -- recognition of differences unique to nonprofit management 1980s -- government outsourcing delivery and management of social and human services draws attention to nonprofit sector 1990s -- significant attention paid to nonprofit management by scholars and writers

Contingency Approach

Effectiveness of the group is contingent on the relationship between the style of the leader and the degree to which the situation enables the leader to exert influence Task-oriented leader concerned with relationships to complete the task at hand Relationships-oriented leader concerned with tasks to have successful interpersonal relationships

charity

Giving intended to meet current individual human needs or to alleviate current human suffering.

Develop Goals, Strategies, and Objectives

Goals -- directions that an organization will pursue with respect to strategic issues Articulates broad directions but does not state how they will be accomplished Strategies -- approaches the organization will take to address strategic issues and to achieve goals Objectives -- specific, quantified targets that represent steps toward accomplishing the goals

Why Strategic Planning Is Important

Guide the board in future decision making, facilitate and inspire fundraising efforts, and help the board better understand how the organization operates Clarify the mission to all stakeholders Assess, reassess, and adjust programs- reevaluate performance Reaffirm that an organization is headed where it wants to go or should be going .direction is maintained Focus thinking outside the box Develop a framework within which to make difficult programmatic and financial decisions Address external uncertainties and change

Trait Approach

Leaders are more intelligent, dependable/responsible and more active than other group members Leadership traits associated with: Age, height, weight, appearance Relationship to followers is more important than traits

Share leadership:

Leaders distribute leadership within their organizations and empowers other to lead.

Chapter 4 - Why do nonprofits need boards-legal, practical and ethical reasons?

Legal reasons: State laws require that nonprofit corporations have a board to assume the fiduciary role for the organization's well - being State laws stipulate the minimum size for a board — mostly between one and three members — and other requirements that define how boards may function or be structured Federal law expects the board to serve as the gatekeeper for the organization Ethical Reasons -Board goes beyond the legal requirements to ensure that the organization not only does things right, but does the right thing Acts as the agent for the organization's constituents Work with management to ensure that goals are met and that ethical principles guide all activities Provides oversight on how funds are used Practical Reasons In start-up organizations boards draft the organizational documents, hunt for supplies and equipment, and procure funding Before a staff is hired, board members usually manage the daily affairs and run the programs of an all - volunteer organization Detached from daily affairs — to look at the organization as part of its larger sphere and not just as an office that carries out the strategic plan Provides continuity

Chapter 6 - What are the mechanisms of accountability?

Legal requirements State laws, federal laws, Sarbanes-Oxley Act, and IRS regulations-Form 990 Self-regulation Panel on the Nonprofit Sector (Independent Sector, 2005) Standards and accreditation Charity watchdogs (transparency) Proactively examine nonprofit organizations, applying their own standards Complete their evaluations with or without the cooperation of nonprofit organizations Media scrutiny

Measuring Performance: Outcomes

Measuring against mission Theory of change-how we effect change Logic model- what we do and how Links between program objectives, activities, and expected program outcomes Inputs-what resources are committed Money, time, staff, expertise Outputs—what we count Program created, number of people served, activities carried out Outcomes- what we wish to achieve Changes intended, expected, Outcome indicators -what we use to stay on course Specific, observable, measurable Impact- what we aim to effect Common indicators Identifying a common set of outcomes and indicators for all nonprofit organizations Urban Institute and the Center for What Works

management

Peter Drucker: "for most Americans, the word 'management still means business management'. Non-profit sector growth brought about a need for the adaptation of the theories & skills of business management to the planning, managing, financing of non-profits. -Management is the attainment of organizational goals in an effective and efficient manner through planning, organizing, staffing, directing and controlling organizational resources.

Describe fully the steps involved in the strategic planning process

Plan to plan Determination of Nonprofit Values, Mission, Vision Assess the situation-organizational accounting via SWOT analysis or other analytic tool Identify the strategic issues or questions that need to be addressed Develop goals, strategies, and objectives Write and communicate the plan Develop operational plan Execute the plan Evaluate the results-Learning from evaluation: midcourse corrections/new strategies

Components of Management

Planning:the process of setting objectives and determining in advance exactly how the objectives will be met. Organizing: is the process of delegating and coordinating tasks and allocating resources to achieve objectives Leading: the process of influencing employees to work toward achieving objectives. Controlling: the process of monitoring progress and taking corrective action when needed to ensure that objectives are achieved.

operating foundations

Private foundations that do not make many or any grants to other nonprofits legally private foundations, but all funds used to support their own programs & operations.

How do we define and measure an organization's impact?

Program evaluation: -the application of systematic methods to address questions about program, operations, & results -may include ongoing monitoring of a program as well as one-shot studies of program processes or program impact Organizational performance -organizational effectiveness is measuring achievement against mission -organizational performance encompances other concepts such as, efficiency, productivity, or equality. Effectiveness versus efficiency -efficiency is "a measure of the proportion of resources used to produce outputs or obtain inputs-cost rations -effectiveness is comparing the results achieved with the results sought Organizational versus program effectiveness

What are the benefits of a strategic planning?

Promotion of strategic thinking, acting, and learning especially through strategic conversation and deliberation among key actors Strategic thinking is thinking in context about how to pursue purposes or achieve goals Strategic acting is acting in context in light of future consequences to achieve purposes and to facilitate learning Improved decision-making Focuses attention on crucial issues and challenges the organization faces, and helps key decision makers figure out what they should do about them Enhanced organizational effectiveness, responsiveness, and resilience Good management helps create good organizational systems, produce the outputs and outcomes that indicate organizational effectiveness Enhanced organizational legitimacy Organizations that satisfy key shareholders according to the shareholders' criteria and that create real public value at reasonable cost earn a right to exist Enhanced effectiveness of broader societal systems Most of the public problems we face these days stretch beyond any one organization's boundaries Issues faced today need to be conceptualized at the higher organizational or system level It can directly benefit the people involved It is a cost-effective tool for finding or creating useful ideas for strategic interventions and for figuring out how to organize the participation and coalition needed to adopt the ideas and protect them during implementation

Level 3: Establishing Reciprocity

Reciprocity the ability of nonprofit organizations to serve their constituents and donors in a manner that maximizes acceptance and trust Nonprofits achieve reciprocity when they recognize and celebrate the match between donor interests and their own Specific interests of the donors, volunteers, and staff associated with an organization, thereby employing a supply-side rationale

An Effective Strategy Must Meet Several Criteria

Technically workable and administrative feasible Politically acceptable to key stakeholders and result oriented Must fit the organization's philosophy and core values, even if the purpose is to change them It should be ethical, moral, and legal, and should further the creation of public value It must deal with the strategic issue it was supposed to address and create significant public value at reasonable cost

Component of Strong Ethical Culture

The focus of leaders' attention Leaders' responses to crises Leaders' overall behavior Allocation of rewards by leaders Handling of personnel issues such as hiring and firing

Transformational Leadership

The term "transformational leader" was the product of a book written by James MacGregor Burns, a former presidential advisor, political scientist, and historian Moral commitments are at the heart of Burns's definition of transforming leadership. Transformational leaders focus on terminal values such as liberty, equality, and justice. Transformational leaders are driven by duty, they are guided universal ethical principles- are altruistic Transformational leadership is characterized by the following: Idealized influence: They become role models for followers and put followers' needs above their own Inspirational motivation: motivate by providing meaning and challenge to the tasks of followers and they arouse team spirit Intellectual stimulation: Transformational leaders stimulate innovation and creativity. Individualized consideration: act as coaches or mentors who foster personal development

What are the distinctions between the different types of leadership described in class (transformational, transactional, servant, and charismatic). What are behaviors of an effective executive director?

Transactional: -Involves and exchange of valued things No deep and enduring link Transformational: -Leader and follower raise one another to a higher level of morality and motivation Mutual support for a common purpose -Transformational leaders raise the morality of both the leaders and followers; transformational leaders prescribe how leaders should act; and they are much less prone to ethical abuses Servant: -Leadership begins with a commitment to serve others Doesn't pursue own self-interest Bottom-line is less important than honesty, integrity, character & spirit -Stewardship -The basic premise of servant leadership is that leaders should put the needs of the followers before their own needs. -Servant leaders are less likely to cast shadows by taking advantage of the trust of followers, acting inconsistently, or accumulating money and power. Charismatic: -Charismatic leaders are more person centered; followers have a strong connection to the leader, approaching idol worship; their success as leaders is based on their personal characteristics; and are result focused Behaviors that cause others to see a person as charismatic (Rainey, 2003) Leader advocates a vision that is different from the status quo but still acceptable Acts in unconventional ways in pursuit of the vision; self-sacrifice and risk taking; displays confidence; uses persuasive appeals to influence followers Need for social distance (Fisher, 1984)

double bottom line

a non-profit exists to pursue a social mission, and success must be measured in terms of its ability to achieve that mission. That is one bottom line. Non-profit managers also must pay close attention to financial bottom line; to maximize profit in order to increase the value of the owners' equity.

Chapter 2 - Should gifts made by individuals to a non-profit organization that receives the largest portion of its revenues from fees for services be fully tax deductible, partially deductible, or not deductible at all?

***Regardless of whether the nonprofit's income comes from fees for services, as long as they are abiding by their mission, individuals providing gifts to that organization should at least be partially deductible and not fully deductible, because the organization is gaining revenue from fees.***

advocacy organizations

4 categories - Public charity 501 (c)(3)s, private foundation 501(c)(3)s, organizations that are exempt under Section 501(c)(4)s, refered to by the IRS as Social Welfare Organizations, other tax exempt organizations such as, labor unions, chambers of commerce, social &recreational clubs, trade associations, & others.

charitable nonprofits

1/3 of revenue comes from government grants & payments for services under programs such as Medicare& Medicaid. Some nonprofit organizations exist primarily as government contractors implementing government programs. And also some government agencies also have begun to tap the private sector to supplement the funds they receive from tax revenues.

flexible purpose corporations

1st established in CA & WA. Some features similar to a benefit corporation. Board & management required to agree on social purposes, boards & managers protected against liability if they do not exclusively pursue profits for the benefit of shareholders.

What are the core components of accountability? Discuss the different types of accountabilities? Discuss three types of measures used by nonprofit organization to evaluate their performance.

4 Core Components of Accountability: -Transparency all financial records open to the public -Answerability of justification knowing why you do/do not act -Compliance monitoring, evaluation, reporting outcomes -Enforcement or sanctions for shortfalls in the first 3 Measuring Performance: -Financial Ratios -Benchmarking -Outcomes -Common Indicators -Balanced Scorecard -Social Return on Investment -Blended Value

Servant Leadership

5 concepts that appear to be central to Servant Leadership -1. Stewardship: Being a servant leader means acting on behalf of others. 2. Obligation: Servant leaders take their obligations or responsibilities seriously. 3. Partnership: Servant leaders view followers as partners, not subordinates. 4. Emotional healing: Servant leaders help followers and organizations recover from disappointment, trauma, hardship, and broken relationships. 5. Elevating purpose: Servant leaders also serve worthy missions, ideas, and causes Applications of Servant Leadership -Focus on followers -Act as a steward -Cultivate self-awareness -Pursue elevating purposes

Self-perpetuating Governing Boards

Advantages: Can maintain continuity of culture, priorities, goals Can craft the board membership to gain needed skills Can select members who are helpful in fund-raising. Disadvantages: May become unrepresentative of the community or constituency. May become too stable to respond to changes in the environment. May become too passive & yield too much authority to the CEO.

Elected Governing Boards

Advantages: Helps ensure that the organization & the CEO will be responsive to members' needs & priorities Disadvantages: Division among the membership may create disagreement on the board. Turnover on the board may make it difficult to sustain focus on long-term goals & plans. Skills of board members may be uneven, since personal popularity or positions on issues may influence election.

Advisory Boards or Councils

Advantages: May be a vehicle for gaining expert advice on technical matters and/or for engaging more people as advocates and donors Disadvantages: if roles and responsibilities are not clearly defined and understood, may intrude on areas in which only the governing board has authority

Describe the steps of starting a nonprofit

Determine the purpose and mission of the organization Form a board of directors File articles of incorporation Draft bylaws Develop a strategic plan Develop a budget and resource development plan

Discuss the different of governing boards, their advantages and disadvantages of each. Discuss the legal and functional responsibilities of the nonprofit governing boards.

Elected Governing Boards Self-perpetuating Governing Boards Hybrid Governing Boards (Often including appointed, self-perpetuating, ex-officio) Advisory Boards or Councils

Effective CEO

Embrace responsibility for helping the board to its job Initiate and maintain a structure for board work Show consideration and respect toward board members Facilitate interaction in board relationships Provide helpful and useful information to the board Promote board accomplishments and productivity Envision change and innovation with the board Does not manipulate or dominate board

Chapter 5 - Why is leadership essential in NP sector?

Employee participation is more prevalent and we need leader styles to match this Top down models of leadership don't work any more In need of creative and imaginative solutions to problems "Command and Control" doesn't encourage risk and innovation

IRS Form 1023 - asks what is/are

Funding sources Plan for fund raising Planned activities next 3-5 years Board members Affiliation of board members Financial affiliation with other organizations Assets owned Plans for owning facilities Pricing method Position on lobbying Financial condition Date of incorporation

What does the act of satisfying customers of for-profit organizations & of nonprofits do to their resources? Is this always true?

In a nonprofit, mission, money, & management are interdependent. Increased activity associated with nonprofits can strain resources already limited rather than enhance them. Achieving organizational objectives through efficient and effective utilization of resources. Efficient means doing things right so as to maximize the utilization of resources. Effective means doing the right thing in order to attain an objective. For-profit organizations are in business to address their financial bottom line, meaning they want to increase the value of the business & the wealth of the owners. Nonprofits also want to maximize profit in order to increase the value of the owners' equity. They also need to satisfy their social mission. Organizational trade-offs between mission, acquisition of resources, and strategy. Complex relationships among various stakeholders. Addressing problems can be exceptionally difficult and intractable. *This tends to be true because of constant trade-offs, acquisition of resources, & strategies.

Other Macro Theories

Motivation theories (why do people give?) -Theories of altruism and giving vs. self-interest -Similar to supply-side economic theories, the focus is on the supplier of goods, not the client Theory of Commons: An Interdisciplinary Approach -How are common goods different from private and public goods? NPs produce common goods Member-serving category

charitable choice

Name given to four federal laws passed in the late 1990s specifying the conditions under which nonprofit religious organizations could compete to administer certain social service delivery and welfare programs.

Chapter 3 - • Explain the different characteristics of nonprofits organizations.

Nonprofit organizations do not distribute profits to individual owners or use profits to enhance the wealth of owners. Additionally, profits must be retained within the organization & be used to further its programs.

Is management of a nonprofit organization really different from management of a business or government agency?

Organizational trade-offs between mission, acquisition of resources, and strategy Complex relationships among various stakeholders Double bottom line of social and financial results Addressing problems that are exceptionally difficult and intractable

unrelated business income tax (UBIT)

Organizations are subject to this tax if any activities do not directly address their social missions. An activity is unrelated if it (a) is a trade or business, as defined by the IRS, (b) it is regularly carried on & (c) it is not substantially related to the exempt purpose of the organization.

hybrid organizations

Organizations that operate under both nonprofit & for profit legal forms.