PA 3140 Midterm

Influence on ethics at organizational level

one of the most influential methods may be to use values-based leadership. There are five core attributes of ethical nonprofit managers: integrity, openness, accountability, service and charity. Large nonprofits may benefit from having an ethics committee.

Political, cultural, and institutional influences: National Culture

orgs will be reflective of the larger culture. Shown in how organizations structure authority relations, decision making responsibility, control and communication systems, and employee training, recruitment, evaluation and promotion.

How to avoid negative affects of founder's syndrome

"By proactively preparing for the departure of a founder, or in fact any executive director, a nonprofit may be able to avoid some of the vulnerabilities that can arise from these transactions..." p. 248 (Not in Chapter 3, but answers the question)

Strategic issues definition

are the small number of very important issues that emerge from evaluation of internal and external factors that currently are affecting or are likely to affect an organization.

Market penetration

(Existing Offering, Existing Market) The non profit seeks greater impact in its current market. It could do this through reductions in price, further promotion, or increased distribution. For example, the red cross may decide to have bloodmobiles start visiting sites in different parts of a city

market development

(Existing Offering, New Market) The nonprofit seeks to extend its offerings to new markets. It could explore new uses for its offerings or market to new segments. The American red cross could start offering instruction in lifesaving to senior citizens or junior high school students.

Purpose of Business case

(Like business plan): can help the idea originator and potential supporters evaluate the feasibility and needs of a new nonprofit. Includes an assessment of the environment and lays out the business concept, helping to justify investments in the organization's development. Should include financial projections, program objectives, and operational goals, along with a timeline to help leaders define and measure progress. Written for an external audience

product or service development

(New Offering, Existing Market) The nonprofit seeks to enhance its offerings in its current markets. This could be due to the lack of growth of its current offerings or due to customer demand. For example, Go red for Women was a new program of the American Heart and Lung Association in the healthcare market.

diversification

(New Offering, New Market) The nonprofit seeks to offer new products to new markets. New offerings could be related or unrelated to current offerings. Related diversification may be due to the desire to expand. Unrelated diversification may be due to necessity if a service in an area ceases to exist. For example, in a related diversification a nonprofit providing job training in classroom settings may start and landscaping service that employs its own clients.

pyramid of giving

*see image annual giving--->major giving-->planned giving

Accounting

-Accounts- need to keep track of what they own (assets) and what they owe (liabilities). Also need to account for activities: know revenues minus expenses to determine net income or net loss. -The Accounting Cycle- process that allows for the accurate recording and summarizing of transactions by an organization. -->Documenting- need some sort of receipt for all transactions -->Recording- need to record source data in appropriate accounts -->Reporting- adjustment entries are made and financial statements are prepared -Accounting Internal Controls- a sound internal control system improves operational effectiveness, enhances reliability of financial reporting, ensures compliance with applicable laws and regulations, and reduces opportunity for fraud

Authority relationship of board and executive director

-Board makes broad mission-based decisions, Executive Director makes more specific operational decisions day to day -Rubber-stamping board: Executive director has real power, just gets the board to agree with decisions

Public charity vs private foundation

-Both 501(c)(3) organizations -Distinguished primarily by the level of public involvement in their activities PUBLIC CHARITIES -Receive a greater portion of their support from the general public or government units -A 501(c)(3) is presumed to be a private foundation unless it requests/qualifies for determination as a public charity -Emphasis on PUBLICLY SUPPORTED organizations PRIVATE FOUNDATION -Typically controlled by the members of a family or small group of individuals -Derives much of its support from a small number of sources and from investment income -They are less open to public scrutiny, but subject to various operating restrictions and to excise tax for failure to comply with those restrictions

Purpose of (c)(3) organizations

-Charitable -Religious -Educational -Scientific -Literary -Testing for public Safety -Fostering national or international amateur sports competition -Preventing cruelty to children or animals

Financial policies

-Conflict of Interest Policy- ensures that no board members or staff gain excessively from transactions involving the nonprofit -Whistle-Blower Policy- nonprofit cannot retaliate against anyone who reports suspected fraudulent activities -Budget Reserve Policy- should set aside a certain amount of funds in order to protect the nonprofit in times of financial uncertainty -Investment Policy- designates and investment officer, decides whether to pursue and active or passive investment strategy, and spells out the values that will guide investment choices -Document Retention Policy- have policies related to keeping and destruction of documents in coordination with local laws

legal responsibilities of a nonprofit governing board

-Duty of care: board members are required to participate in making well-informed decisions on behalf of the nonprofit. This involved holding adequate meetings, prudently reviewing materials facts necessary to make reasoned decisions, consulting experts if needed and ensuring that a quorum is in attendance to make official decisions. -Duty of Loyalty: board members need to set aside their personal and business interests and make decisions in the best interest of the nonprofit. Each member is expected to stand behind the decision or resign from the board. -Duty of Obedience: board members are responsible for ensuring that the nonprofit remains true to its purpose as stated in its charter or articles of incorporation when it was established. Donated funds should be used to fulfill the nonprofit's mission.

Factors to consider in forecasting changes in services needed and resulting HR capacity demands

-Economic Conditions: As unemployment rises, demand for nonprofit services rises. When unemployment is low, nonprofits need to pay more to compete with other jobs. -Population and Demographic Skills: Nonprofits may have to shift their programs and the staff capacity to serve different areas when population changes or when different demographics need more help. Can also change the abilities workers need to have; language skills, etc. -Realization of Mission: When a nonprofit sees a decline in a need for their services, they may need to reduce staff or increase staff when more people seek their help. -Natural Environment: Service demands can change with conditions in the natural environment; extreme weather can lead to a need of shelter and healthcare services. Need to have staff to handle that. -Other Actors in the Service Network: Demands are likely to shift when other organizations start, expand, or end certain services. Can also be affected by the services provided by the government and private businesses. -External Funding and Government Reimbursement Policies: An organization may need to provide a certain service if receiving government funding and they may need government approval to provide other services. The amount of funding a nonprofit receives from any source also determines what services and in what quantity they can provide -Technological and Cultural Shifts: Technology innovations and popular culture can cause a nonprofit to change its marketing or service approach. If not, they could become irrelevant if the "modern generation" cannot access information in the way they prefer.

Rationals for using volunteers

-Economy and efficiency: volunteers are more dedicated to the job; they will do the gross things better than paid staff because they actually care -Effectiveness/Mission Achievement: cheaper and you're not paying them; they're there because they want to be #1 reason: they're free: But they're not free... staff must teach them to do that, they provide t-shirts/thank you party/ food for volunteers to incentivize them, they might need office space -Only reason is should not be "they're free" : OK to say, we will have paid staff eventually, but we can't afford it right now -Accountability: less accountable; not losing pay or anything -Safety and Reliability: less training than paid staff? -Community Ties: probably have better knowledge of the community -Fundraising Benefits: better at asking for money because people don't think that they're just trying to do their job; volunteers are also likely to donate to organizations they volunteer for -Public Image/marketing -Leadership pipeline development and choice

Founder's syndrome symptoms

-Founder has too much control- believes they should have a central part in decision making -Founder controls board, can sway votes -Board meets infrequently, leaving founding CEO in charge for most decisions -Founder sets agenda for board meetings -Founder believes they should have instrumental role in recruiting board members -Sees board as accountable to them, not other way around -Charismatic leader

common phases of boards

-Founding (collective subphase): invested in creating a new nonprofit -Founding (Sustaining subphase): sees the nonprofit as relatively stable. -Super-Managing: members brought on for their expertise and skills begin to question the executive leader and attempt to influence the nonprofit in their governance role. -Focusing on corporate responsibility: board is focused on its governance responsibility and expects accountability and transparency from the executive leader. -Ratifying: board performs it duties in a cursory manner. Focus is on running efficient meetings.

Application of ideas in chapter to paid staff and volunteers

-HR needs to understand what each type of worker is able to provide and what resources are needed to manage them -Some positions (Big Brother Big Sister) require volunteers rather than paid staff because then the child knows their mentee actually cares about them -Use of paid staff can undermine the idea of "altruistic" work in a nonprofit -But paid staff is able to commit more time per day and is more likely to stick with the organization for a period of time; organizations need workers that can enhance stability -Volunteers can be more passionate about the work than paid staff, or they can be disconnected if it is a required activity for something; productivity is not consistent

Executive succession challenges and using a leadership agenda for process

-If there's founder's syndrome, it can be especially difficult to transition to a new leader because the founder had too much control; leaving it vulnerable and misorganized -Staff and boards who have come to rely on a strong executive director may find that the organization does not have the internal capacity to fill the departing leader's shoes -A director leaving can result in loss of supporters that followed them -A poor choice of a new director may compound problems and make it difficult for the nonprofit to survive the transition and regain momentum -Need to have a procedure for choosing a new director/ a plan for what they want the new person to achieve

Differences among donors and types of gifts

-Individuals -Giving Groups (giving circle; ie pooled donations) -Foundations-private, individual, or family, company sponsored, and community foundations -Federated Funders- solicit donations through workplaces then distribute profits -Businesses Types of gifts: -Monetary -In-Kind- services or items -Stocks, bonds, real estate properties, insurance policies, retirement accounts, and other investments -Designated gift- for a specific purpose -Endowment- nonprofit doesn't touch actual money, just takes interest -Percentage of a purchase

Ethical standards commonly promoted for nonprofits

-Integrity: honest, fair, predictable behavior -Openness; transparency; willing to explain themselves -Accountability; willing to answer for the decisions they make -Service: Commitment to serve the public good. What they're actually doing and saying; they put the public above their personal and organizational interests -Charity: behavior, attitude towards the world; caring for others, actualized concern for the well-being of others -NP Leaders need to exhibit these characteristics to role-model what everyone else in the organization needs to act like and value **OANO Standards** -Formally and specifically stated mission -Revisit mission and update occasionally -Defined, cost-effective procedures for evaluating programs and projects in relation to its mission -Act with professionalism and respect -Board should engage in planning activities to determine mission of organization, define specific goals, and objectives etc. -Board should establish effective policies for effective management of organization -Board should have no fewer than 5 directors, 7 or more is preferable *Review more

Personal and Positional Sources of Power

-Legitimate Power- comes from having authority from followers to exert influence over them -Reward Power- Arises from the ability to control rewards and positive outcomes for others -Coercive Power- The ability to influence others through fear or punishment -Referent Power- have influence over others because they are personally liked by them -Expert Power- Have technical knowledge and expertise that others rely on -Effort-related power- influence derived from active, dependable performance -Centrality-Related Power- Comes from controlling how others interact and gain information -Executive Centrality- an executive director having centrality related power with their board -Criticality-Related Power- comes from performance of tasks critical to others' performance; people rely on that person to do their own jobs; leverage -Flexibility-Related Power- having discretion over what one does -Visibility-related power- comes from being in a position where one can be known and seen by influential others -Relevance-Related Power- The ability to control the tasks and outcomes of high priority to others

Purpose of articles of incorporation

-Name of -Purpose and duration of -Names and addresses of incorporators, initial board -Address of initial office and registered (statutory) agent -Provisions for distribution of assets if dissolved

The marketing mix

-Product (the thing being offered) -Promotion (the advertisement of it) -Price (the cost of the good or service) -Place (where the product is offered to consumers)

Social entrepreneurship framework/ Social Value Proposition

-Social entrepreneurship: any individual, group, network, organization, or alliance of organizations that seeks large-scale change through pattern-breaking ideas about the ways in which governments, nonprofits, and businesses can address significant social processes. -Social Value Proposition: Unique reason why we should want to be involved in nonprofit over other opportunities --People --Capital --Opportunity Express values important to us Promises desirable benefits/ outcomes Believe nonprofit is likely to succeed

Traditional basic responsibilities of a nonprofit executive director

-Subordinate to the board -Administering day to day affairs of the organization 10 Basic Responsibilities: 1. Commit to the mission 2. Lead the staff and manage the organization 3. Exercise responsible financial stewardship 4. Lead and manage fundraising 5. Follow the highest ethical standards, ensure accountability, and comply with the law 6. Engage the board in planning and lead implementation 7. Develop future leadership 8. Build external relationships, and serve as an advocate 9. Ensure the quality and effectiveness of programs 10. Support the board

Desirable jobs for workers

-What would we like to do differently? -What new activities would we like to test? -What frees staff for tasks better suited to them? -Which tasks: -->Benefit from concentrated attention -->Are goal/product oriented, not schedule oriented -->Can be done by small teams -->Suitable for testing, experimentation, (low risk)

Desirable competencies of for nonprofit board members

1. Contextual competency: boards need to consider the organization's culture, norms, values, principles and history when making decisions. 2. Educational competency: boards that take the time to educate themselves about the organization and its environment and that analyze their own functioning are more likely to have the information needed to recognize poor performance and address emerging concerns about effectiveness. 3. Interpersonal competency: boards need to operate as a group of individuals, taking advantage of individual board members' skills and knowledge, building cohesiveness and grooming future board leaders. 4. Analytical competency: boards are likely to make better decisions when they seek multiple perspectives and feedback to help them recognize complexities in situations and issues the organization is facing. 5. Political competency: boards need to understand and be sensitive to the interests of the organization's key constituents. 6. Strategic competency: boards need to concentrate their time on key strategic priorities and not be waylaid by less important concerns.

Contingencies suggesting particular types of board configurations

1. Policy Governance Configuration: is found in boards that follow a clear delineation between board and staff roles and the board is focused on big-picture strategy and policy setting. 2. Constituency/Representative Governance Configuration: is similar to the policy governance in that it is formalized, with clarity of roles and responsibilities, and uses permanent committees with clean mandates. It tends to be more decentralized in its decision-making, giving more power to committees and staff. 3. Entrepreneurial/Corporate Governance Configuration: less formalized and bureaucratic than the previously described boards. It tends to use short-term task forces and project groups more than permanent committees. There is less clarity and more overlap in the roles of board and staff. 4. Emergency Cellular Governance Configuration: most informal of the types. This board has organized, emergent ways of operating. There is little formalization and bureaucracy. The board regularly seeks input and involvement from non board members. 5. Hybrid Configuration: some board do not fit cleanly into any of these configurations. Adaptations to environmental pressures and preferences of nonprofit leaders.

Traditional responsibilities of nonprofit governing boards

1. Set the organization's mission and purpose 2. Select the chief executive 3. Provide proper financial oversight 4. Ensure adequate resources 5. Ensure legal and ethical integrity and maintain accountability 6. Ensure effective organizational planning 7. Recruit and orient new board members and assess board performance 8. Enhance the organization's public standing 9. Determine, monitor, and strengthen the organization's programs 10. Support the chief executive and assess his or her performance

Four stages in socialization of workers

1. Stage One: Confronting and Accepting Organizational Reality -Worker confirms or disconfirms expectations -Conflicts may emerge between worker's personal values and the organizational climate -Worker discovers which behaviors are rewarded and which are punished 2. Stage Two: Achieving Role Clarity -Worker is initiated to the job tasks and interpersonal roles -Worker copes with others' resistance to change -Worker builds congruence between self and organization -Worker copes with place in structure and any role ambiguity 3. Stage Three: Locating Oneself in the Organizational Context -Worker learns behaviors congruent with organization's desires. -Worker resolves conflicts of interest related to outside needs and work interests -Worker feels commitment to organization -Worker develops new interpersonal relations, values, and altered self-image 4. Stage Four: Detecting Signposts of Successful Socialization -Worker demonstrates dependability and commitment -Worker feels high general satisfaction -Worker and others have feelings of mutual acceptance -Job involvement and intrinsic motivation increase

Value of branding to nonprofits

A way for the public to identify and recognize the nonprofit. It can convey perceptions and attributes that can hold a variety of meanings about the nonprofit including its attributes, benefits, values, culture, personality and the nature of its users. Successful branding can lead to these benefits: -Differentiation: users know what they will get -Enhanced Performance: users come to trust the nonprofit and that leads to more use of its products and services -Reputation Insurance: Users will have confidence in nonprofit, enabling it to weather any short-term problem or crisis -Enhanced Loyalty: Users will develop emotional ties with the nonprofit -Partnerships: organizations will be more likely to want to associate with the nonprofit

Functional structure

Activities are grouped together into units or departments by types of work skills and tasks- common functions such as fundraising, marketing, and service provision. This structure can facilitate economies of scale because the organization only needs one unit for each function. Also, grouping all the knowledge and skills for one function together can promote the development of functional expertise. This structure functions best when little horizontal coordination is needed, as horizontal coordination or communication between functional departments would be difficult. Communication between two departments would need to go through a higher organizational level so that decision making can be centralized, with upper-level units deciding on matters that cut across functions in addition to matters that affect the orgs as a whole. This communication resulting in slow response time in changing environments, poor horizontal coordination, and reduced innovation. This structure is therefore best for organizations with relatively few products and working in relatively stable environments.

Influence strategy: reciprocity

An individual encourages others to WANT to do what the individual desires -Pros: less aggressive than retribution; usually results in more trust in work relationships -Cons: may not work as well/ could encourage a continuous "what's in it for me?" Mentality about all work tasks

Psychological contract

An unwritten contract that captures the individual's perceptions of the obligations he has to the organization and the obligations the organization has to him. These exist for all types of workers. Breaches of this contract can result in reductions in satisfaction, productivity, and desire to continue with the nonprofit.

Types of training useful to nonprofit board members

Bylaws, Officers, Committees, orientation, Training, Self-Assessments, and Organization Reports, and finally advisory groups.

Borrowing

Choosing to take on short-term or long-term debt due to financial shortage. -Line of Credit- permits borrowing up to a preset amount over a one-year period. Interest accrues on the line until it is paid -Loan- has fixed repayment terms. -Bond- issuing a bond to be repaid with interest at a later date; sometimes not tax exempt -Lease- rather than purchasing an asset; makes sense when something, like a computer, is likely to become obsolete

Hierarchy of authority of organizational structure

Describes who reports to whom and the span of control for each manager, as covered previously in our discussion of organizational charts.

Purpose and nature of marketing audit

Detailed reviews of internal and external factors likely to impinge upon the organization in ways relevant to marketing. The current and future status of these factors. External analysis can be used to gather information on the general environment, including important political, economic, environmental, sociocultural, and technological factors. (PEST can be used.) An internal analysis will assess the nonprofit's own marketing activity and its marketing strengths and weaknesses.. Five areas should be assessed: -Trends -Share of the Market -Stability -Efficiency -Flexibility

Effective leaders change their style to fit the situation

Effectiveness of a given leadership style depends on situational factors; leaders have different styles in their repertoire to handle that -Task Oriented- define and organize work relationships, determine roles and responsibilities, and establish communication channels and procedures -Relationship Oriented- nurture warm and friendly working relationships, encourage trust and respect, and satisfy social and emotional needs. -Laissez-Faire Leadership- leaders are nondirective, neither task nor relationship oriented, and may be empowering by staying out of the way. -Transactional Leadership- well suited to an org that does not need major changes; involves working within systems to ensure mission is properly pursued. -Promotes stability and incremental improvements. -Transformational Leadership- involves inspiring followers to achieve a new vision and implement major change in an organization. Called for when NP is first founded or faces a major crisis or environmental change

Growth/learning/adaptation as an approach to understanding nonprofit effectiveness

Evaluation can also focus on a nonprofit's ability to respond to internal and external changes as well as its ability to grow and continuously improve. Survival is a crude measure of effectiveness as is growth in size and staff, budget and services. The ability to adapt in order to capture new opportunities and reduce vulnerabilities and inefficiencies is a better indicator of effectiveness than mere survival but is more challenging to measure. With this approach, criteria for effectiveness include having a readiness for change and an ability to learn, making continuous improvements in quality and efficiency, and taking advantage of opportunities for innovation.

Horizontal structure and virtual network

Extends the concept of horizontal coordination and collaboration beyond the boundaries of traditional organization. This structure is characterized by the outsourcing or contracting, of some of an organization's functions or activities. With the advent and growth of increasingly extensive and sophisticated electronic communication systems, a network of outside specialists can be located anywhere and coordinated by the core, or central, organization. This allows the core organization to take advantage of the specialized expertise of any number of partner organizations. The organization decides which functions it will outsource and how it will maintain or allocate to the partner organizations. This structure gives an org worldwide access to talent, resources, and capabilities without the need to invest in its own facilities or employees. This reduces overhead and makes the organization highly flexible and responsive to changing environments. The primary weakness of this structure is the increased difficulty of maintaining control over far-flung partners, including the need to make contracts with these partners and monitor contract compliance. The organization is also dependent on partner performance and potentially vulnerable to partner failure.

Fund development process

Fund development process: multiple steps and each can be critical in attracting and retaining donors. 1. Identify your nonprofit's case for support 2. Define what mission the fundraising goal would accomplish 3. Assess the environment for gift giving and determine markets 4. Assess the nonprofit's capacity for fundraising 5. Research and select fundraising vehicles, prospects and approaches 6. Prepare the plan and the organization 7. Solicit gifts, thank donors, steward gifts, and prepare to renew gifts if appropriate.

Resource acquisition as an approach to understanding nonprofit effectiveness

Goal-related outputs, a nonprofit can evaluate effectiveness in terms of the extent to which it has acquired the inputs needed to accomplish its mission. -->Human resources: number and quality of staff, volunteers and board members. -->Financial resources: number and size of donations, grants, contracts and sponsorships. -->Capital resources: facilities, equipment and materials. -->Knowledge resources: expertise, information from needs assessments and evaluations and consulting services. -->Program resources: participants, waiting lists, referrals, collaborators, partners, technology, programs and products. -->Community-based resources: positive media attention, endorsements, and public goodwill toward nonprofit. This type of evaluation is best used when the level of a resource brought into an organization can be linked to its actual results.

Goal accomplishment as an approach to understanding nonprofit effectiveness

How well the nonprofit meets or exceeds its goals. Goals may be set to encourage a certain level of outputs, such as number of clients served, programs delivered, or service sites added. The nonprofit sector should be careful to treat the amount of revenue generated or donations received as an input, not a goal. Achievement of goals may not indicate achievement of mission. A nonprofit should set goals that are highly likely to align with its mission. Goals should be measurable, time bounded, accepted, challenging but feasible, and prioritized.

Non-distribution constraint relevance to boards

In some states, board members are forbidden from self-dealing, that is, contracting with the nonprofit they serve. Board members can be compensated and reimbursed by the nonprofit for expenses incurred for board services, but the compensation and reimbursement must be considered reasonable.

Cycle of involvement (what's involved at initial involvement, development, maintenance, separation)

Initial Involvement -->Determine rationale for new workers -->Attract Candidates -->Screen and select candidates -->Establish written and psychological contracts Development -->Socialize workers -->Measure performance, identify developmental needs, and share feedback -->Provide learning opportunities Maintenance -->Provide compensation, benefits, and recognition and rewards -->Facilitate a safe and productive work environment -->Maintain and file records Separation -->Understand separation reasons -->Possibly renegotiate position to avoid separation

Influence strategy: Reason

Involves appealing to personal values through logic and presenting facts that stress merits and need -Pros: can help create sustainable behavior by relating an action or task to an employee's values; they may accept the inherent merit of performing the desired behavior and internalize that desire themselves -Cons: may require more time than retribution or reciprocity to obtain desired results due to the need to build trust, discuss common goals and values related to the situation. It can be undermined by highlighting values or goals that are not shared.

Influence strategy: retribution

Involves forcing others to do what the influencer wants -Pros: Can result in quick action -Cons: May raise concern about violation of rights; could be seen as too exploitive, aggressive, or uncooperative

Life cycles

LIFE CYCLE- Based on the idea that products and services pass through predictable usage stages. After a product or service is first introduced, its usage will be low and then will grow slowly as the product or service gains visibility and acceptance. After acceptance, it will have a period of sustained growth. If this continues, the market will eventually become saturated and usage will level off. Eventually a new product will emerge as a replacement or substitute, and usage will decline.

stakeholder satisfaction as an approach to understanding nonprofit effectiveness

Numerous parties may influence or be influenced by a nonprofit organization. These stakeholders have varying degrees of legitimate claims and power to influence the organization's behavior. Stakeholders can have conflicting interest and make competing demands on an organization. The stakeholder mapping is a technique nonprofit leaders can use to identify and strategize about stakeholders.

Effective leaders are self-aware and operate out of a strong value system

Leaders need to know themselves and be self-aware about how they perceive themselves as similar or different from others. Need to understand their own values and how they relate to the mission. They have the responsibility to leave the NP if it no longer aligns with their values. Need to be aware of weaknesses and strengths and have cultural competency to function well within an organization. Plus need to know how they interact with people to build trust.

Purpose of bylaws

Legally binding rules outlining how board will operate

Segmentation choices and challenges

Market Segmentation: Audiences are chosen to allow a nonprofit to use its limited resources so as to most effectively accomplish its missions and goals. The identification of these audiences is accomplished through market segmentation. It involves identifying groups of potential customers based on some meaningful criteria. Those criteria can be categorized as follows: -Demographic Criteria -Geographical Criteria -Product or Service Criteria -Psychological Criteria -Targeting Choices: -Undifferentiated (mass) marketing -Differentiated Marketing -Concentrated Marketing -Mass Customization

Mechanistic vs organic structures in nonprofits

Mechanic: A firm in a stable environment that is more formalized and centralized. Most decision making occurs at the top of the organization. -Tasks are broken down into specialized, separate parts -Tasks are rigidly defined -Authority and control are hierarchical -Many rules -Knowledge and control of tasks are centralized -Communication is vertical Organic: Firms in rapidly changing environments that have a less rigid structure and are more flexible. There are fewer rules and more reliance on informal adaptation. Decisions are made at lower levels of the organization and authority is more widely dispersed. (A lot of nonprofits exemplify this type because it appeals to values regarding the desirability of shared power, permeable organizational boundaries to facilitate collaboration, easy movement of members into and out of the org, and an ability to be innovative and to mobilize quickly to address needs. -Tasks are shared by employees -Tasks are adjusted and redefined through teamwork -Less hierarchy of authority and control -Few rules -Knowledge and control of tasks can be located anywhere in the organization -Communication is horizontal

Multiple objectives

Most nonprofits have multiple constituencies and therefore have multiple objectives. Plus, the most important part of those objects are usually non financial, but they need to have long run financial stability. It can be hard to convince board and staff to allocate resources to marketing when objectives and results are hard to measure.

Identification of strategic issues in organization

Once the strategic issues are identified, specific strategies can be formulated to address them. Might focus on opportunities or challenges. A key point is that there are likely to be consequences at some point if the organizational action at present except monitoring, issues that are on the horizon and will require some action at some point, and issues that require an immediate response.

Effective leaders integrate and balance roles and perspectives

Need to be able to look at a situation in many different ways and from different viewpoints to make the best decision.

Effective leaders use power and influence wisely

Need to have a good balance of building power and influence and letting others have a say. Astute directors understand that politics and use of power are inevitable and that by understanding power dynamics, and being open to others ideas, they can better forward the interests of the organization

Difference between organizations that are set up as innovators vs reproducers

New nonprofits shape the collaborative and competitive environment around them. Other organizations may need to adapt in response to this new entrant in their field of activity. The entrant may be an innovator organization, introducing new ideas to the field, or a reproducer, replication what others are already doing. -->Innovators: new ideas in the field -->Reproducers: replication what others are doing

internal processes as an approach to understanding nonprofit effectiveness

Nonprofits may be judged on the efficiency, harmony and ethics of their internal operations. Evaluation using internal process criteria may be especially useful when a nonprofit relied heavily on team-work or has complicated technology. A nonprofit can uncover areas for improvement as well as opportunities for praise. Nonprofit leaders who wish to demonstrate their nonprofit's effectiveness on this dimension should focus on highlighting good internal management practices.

Varied pricing objectives for nonprofits

Nonprofits must consider their mission objectives and target audiences in setting prices; while maximizing profit is important, serving its mission is most important, so pricing is typically more difficult for nonprofits vs. for profits. -Cost of Producing Approach- break even pricing or pricing to a set percentage over a cost. Feasible if costs can be accurately determined. -User Demand Approach- Not related to cost of producing; may bring in either more or less than cost-based pricing. Put nonprofit more in touch with its users; but need to understand the amount that demand will decrease if price increases. -Competition Approach- using competitor price information and trying to beat it. Need to ensure that doing so does not lead to sacrificing quality or mission drift though.

Financial risk management

Nonprofits need to be prepared for unlikely situations that can threaten their survival: -Damage to property due to carelessness, fire, natural causes, or faulty mechanisms -Lost property due to dishonest acts -Loss of income or increased costs due to the malfunction of a revenue-producing facility -Liability losses due to accidents -Productivity losses due to health problems, addictions, or other performance barriers Risk Reduction Method Examples: -->Schedule equipment down time to perform preventative maintenance -->Maintain smoke alarms -->Update virus protection software and maintain firewalls -->Adopt a policy that defines harassment and ensures no retaliation, confidentiality, and a thorough, impartial investigation

Overhead concerns

Nonprofits want overhead cost to look low, and marketing costs money -Money goes to the things the matter

Fund development principles

One of the most repeated is that "people give to people to help people. It is humans that make giving decisions, no matter whether they are making decisions about the disposition of their personal or another's wealth or are acting in the interest of foundation, corporation or other organization. Another principle is that significant gifts come in all sizes. By offering a wide range of giving opportunities, individuals with different means can give what to them is a generous gift. A third principle is to understand the role of the fundraiser as someone who offers a means for donors to fulfill their aspirations. The means may be through contributions to an annual campaign, endowment campaign, capital or special project campaign, or estate or planned giving.

Founder's syndrome

Over time the founder may actually harm the long-term health of the organization because of his or her central role and inability to give up control. The identity of the organization may become tied to the founder, making it difficult for a successor to be accepted or to the change they ways in which the founder managed or led the nonprofit.

Product portfolios

PORTFOLIO ANALYSIS- considers the main products, services, or programs of a non profit and evaluates them against criteria judged to be important for the organization (MacMillan is an example of a framework that could be used for this type of analysis) See page 180.

mutual benefit vs public benefit nonprofits

PUBLIC BENEFIT -type of nonprofit that most people think of -typically organized for charitable purpose that will benefit the public generally or a segment of the public like a specific community -Social services, artistic endeavors, etc. MUTUAL BENEFIT -Has a mission that only benefits a select group of people; aka membership organization, union, business chamber of commerce, or homeowner's association -Shares same underlying structure as public benefit, but the scope of the mission is narrowly focused to serve a defined class of beneficiaries

Professionalism of organizational structure

Related to the level of formal education and training of employees. Professionalism is considered high when employees require long or specialized periods of training to hold jobs in the organization or need certification or accreditation. Having professional workers- for example certified social workers- is often a requirement to obtain government funding. Volunteer-based organizations or those that use mutual support models often consider sharing similar experiences with clients to be more important than professional training. The use of professionals in a non-profit can be threatening or off-putting to those who have been working in nonprofits in similar roles without the professional training.

Matrix structure

Simultaneously uses aspects of both functional and divisional structures. This is a complex structure, because it features two types of management and three types of units. Functional managers have responsibility for employees with various skills and expertise, whereas product managers have responsibility for producing outputs. Employees are under the authority of both types of managers. They are assigned by functional managers to various product unit, where they are supervised by product managers. This structure is appropriate under conditions where pressure exists to share scarce resources across product lines, environmental pressure exists for two or more critical outputs, or the environment is both complex and uncertain. Under these conditions, vertical (functional) and horizontal (team) authority are both given recognition. The advantage of the matrix structure is that it is flexible in terms of both human resources and products. This makes it particularly useful in rapidly changing environments. It is best suited to medium-sized organizations with multiple products. The structure, however, has a number of weaknesses. Employees are responsible to two managers, which violates the principle of unity of authority. This can cause frustration for employees and managers and requires individuals with good interpersonal skills and a willingness to work in a shifting and ambiguous work setting. Disputes over authority relations are more likely to arise here than in other structures, and time and effort must be expended in resolving them.

Revenue sources and concerns

Sources- fees for services and goods from government, government grants, private contributions, investments income, other income and fees for services and goods from private sources (makes up 50% for public charities). Breakdown ignores nonprofits with less than %5,000 in annual revenues and religion congregations due to lack of data on many of these organizations in the IRS tax records. The breakdowns also reflect the presence of nonprofits with very large budgets, which tend to be health care facilities and higher education institutions.

options for starting a nonprofit organization from an existing organization

Spin-off refers to the creation of a new organization from an existing organization. A nonprofit may spin off another nonprofit or a for-profit operation. -Restructuring-driven spin-offs: are initiated by the parent company for strategic or operation motives, often arising from a restructuring or refocusing of the parent. -Entrepreneurial corporate spin-off: are driven by one or more individuals in existing organizations who are frustrated when their ideas are not endorsed by top management or who want to exploit an unused potential related to their experience and knowledge built within the parent company. -Mission-driven spin-offs: are created as means to help fulfill the core purpose of a nonprofit.

Steps for establishing a nonprofit organization

Steps for formal establishment in U.S. 1. Choose form of nonprofit 2. Get EIN (Employer Identification Number) 3. Register name, possibly trademark it 4. Obtain consents needed from state 5. Submit Articles of Incorporation/Constitution 6. Seek Tax-Exempt determination from Federal IRS 7. Statement of Continued Existence every five years

Formalization of organizational structure

The amount of written documentation in an organization. This could include job descriptions, procedures, regulations, codes of conduct, employment contracts, board bylaws, and policies. The more formalized a nonprofit, the less workers need to invent new procedures to get work done and the less uncertainty they have in their daily tasks. The price is that they also have less flexibility.

mission vs consumer satisfaction

The customer may not prefer the exact good/service provided, but it may be the best way for the nonprofit to achieve their mission so they have short-term customer dissatisfaction (meals on wheels customers preferring less-healthy meals example)

Specialization of organizational structure

The degree to which organizational tasks are subdivided into separate jobs. If specialization is extensive, each employee performs only a narrow range of tasks. If specialization is low, employees perform a wide range of tasks in their jobs. Specialization is sometimes referred to as the division of labor. In organizing a nonprofit, the designer needs to ask whether the workforce should be made up of specialists, generalists, or a combination of both.

Interdependency

The extent to which items or elements on which work is performed or the work processes themselves are interrelated, requiring info sharing. -Pooled interdependence- the program and development staff need to work together as a team to create a report to donors on the organization's achievement -Sequential interdependence- someone must first secure the venue before the food and entertainment can be arranged. Task accomplishment of one person or unit is dependent on the output of another. -Reciprocal interdependence- Units posing critical contingencies for each other that have to be resolved before action can be taken. Tickets cannot be sold until price is determined, which may depend on estimated costs and revenue goals and an assessment of the market base and opportunities for sponsorship.

Standardization of organizational structure

The extent to which similar work activities are performed in a uniform matter. In highly standardized organizations, like prisons, work content is described in detail, and similar work is performed the same way at all locations. Some standardization may be needed to comply with government regulations and contracts.

Geographic structure

The principle in this structure is to organize in terms of the location of the orgs users or customers. With this grouping the org can address and respond to customer wants and needs that may vary by location. (Different regions of the same country or different countries.) For example, large nonprofits such as the Girl Scouts or Boy Scouts, United Way, and Goodwill use semi-autonomous local units and a national headquarters. This structure can be extended globally, with nonprofits such as Heifer International having operations in various nations around the world. A number of options are possible.

Divisional structure

Unit grouping is not based on function but on organizational outputs or products. Each division is organized by the product it produces. Also, the functional departments needed to produce each division's output are contained in that division. This allows for decentralized decision making at the divisional level, freeing the top level or the organization to concentrate on overall decision making and on decisions on issues spanning divisions. For example, top leadership can play the role of organizational banker, deciding the level of resources allocated to divisions. Decentralized decision making and coordination of functions within divisions allows the organization to react quickly to environmental changes, including shifts in customer desires or market conditions. This structure is appropriate for large orgs with multiple products or services. The major weakness of this structure is that economies of scale within function are not possible. For example, each division might have a fundraiser or marketing department. In addition, coordination across divisions (product lines) may be difficult and would have to be done by higher-level units.

Political, cultural, and institutional influences: Dominant coalitions

Various interest groups in the organization each have preferences for organizational goals; no one interest group is normally powerful enough to impose its preferences on the org, so they must form a coalition with another group who can agree to cooperate. Dominant coalition has more power than any other and forms the power center of the organization; engages in a political process to select what the organization will be concerned with, strategies to deal with that environment, technologies, and roles and relationships to control technologies and implement strategy.

Political, cultural, and institutional influences: Institutional isomorphism

When organizations exist in fields composed of other orgs providing the same social function, pressures exist for them to become homogenous. The result of three possible forces: -Coercive isomorphism- when less powerful organizations conform to the wishes of other, more powerful organizations. -Mimetic isomorphism- the result of orgs in uncertain environments copying the structure of orgs perceived to be more successful -Normative isomorphism- due to the spread and adoption of ideas about appropriate structures that is fostered by professional management schools and consultants

Complexity

a function of the number of different items or elements that must be dealt with simultaneously in task accomplishment. It can be measured by the variety of inputs or the degree of customization of outputs. For example, a fundraising event has greater complexity when it involves donors with diverse interests and giving potential. More info needs to be considered and communicated to coordinate an event suited to a wide range of donors.

Structural leader

attention to goals, expectations, procedures and policies

Human resources leader

attention to hopes, relationships, and preferences

Political leader

attention to power, conflict, and shared interests in relationships. *HERMAN AND HEIMOVICS found that effective nonprofit directors are more likely than their less effective counterparts to use a political frame. The political frame gives them a perspective on how conflicts, power relationships, and external factors influence decisions and policies; they can apply conflict resolution very well and work with coalitions and interest groups

Symbolic leader

attention to shared beliefs, values, and norms

Non-distribution constraint definition

board members should not distribute any profits of the organization to themselves, nor should they enter into contracts with the nonprofit that are not in the best interest of the nonprofit.

Influence on ethics at professional level

breaking professional codes may cause them to lose their credentials and ability to legitimately practice their professions. We may see professional norms and standards spilling over to other job functions. By integrating professional standards for ethical conduct into their organization's behavioral codes, they can avoid conflicts across standards and deepen the guidance they provide workers.

Industry analysis

can be used to look at how a nonprofit is in operation in one or more industries. This analysis is one in which nonprofits can adopt and adapt a model from the for-profit world.

Centralization of organizational structure

determined by the hierarchical level that has the power to make decisions. In centralized organizations, decisions are made primarily at the top level of the org. Orgs are often decentralized when decisions affecting the whole org are also made at lower levels of the org. In nonprofits, centralization issues can come into play in deciding what decision-making discretion to give the board versus the staff, and staff versus the volunteers. Nonprofit membership associations often give legal rights to make certain decisions to their members, helping to decentralize the organization.

Complexity of organizational structure

determined by the number of different activities or subsystems in an organization. Some nonprofits have complex parallel structures with two executive directors. For example, arts organizations sometimes have an artistic director and an administrative director, with distinct structures beneath them. -Vertical complexity: refers to the number of hierarchical levels of the organization. The Wikimedia Foundation chart (page 67) shows four levels, differentiated by the intensity of the shading of the boxes. -Horizontal complexity: Refers to the number of units at similar levels. Wikimedia has five units at the chief officer level. -Geographic complexity: Describes the spatial distribution of the organization. For example, Amnesty International in the US is divided into five regions, each with its own staff: Southern, Mid-Atlantic, Northeastern, Midwestern, and Western.

Explain McMillan's grid and its purpose

developed a portfolio approach to identifying generic strategic alternatives for nonprofit organizations. MacMillan's framework is based on the assumptions that nonprofit organizations must compete for scarce community resources, that duplication of services should be avoided except when a safety net is needed, and that communities are best served by a high-quality service provider. One implication of these assumptions is that some nonprofits providers or programs should be terminated if they do not provide optimal benefits for the community, opening the way for more effective providers or programs. That is, community benefit should be the primary consideration in choosing whether a nonprofit should collaborate, compete, or end a program. Framework has three dimensions: program attractiveness, competitive position, and alternative coverage and this leads to 8 possible types of strategies that nonprofit could consider in determining an approach to a particular program. 1. Aggressive competition, 2. Aggressive growth, 3. Aggressive divestment, 4. Build strength or sell out, 5. Build up best competitor, 6. Soul of the agency, 7. Orderly divestment, and 8. Joint venture.

Vertical linkages

ensure that lower levels are working towards goals set at higher levels

Leadership agenda

essentially need to decide what the organization needs, why, what characteristics will help accomplish those goals, and who has those leadership skills 1) Gather data from multiple sources 2) Analyze data 3) Define Leadership Agenda 4) Establish Performance priorities for new CEO 5) Create candidate profile (skills, experiences, attributes)

Purpose of vision

expresses a nonprofit's ultimate goal

PEST

external environment of a nonprofit includes many objective factors as well as the opinions, needs and attitudes of important external stakeholders. Political, Economic, Social and Technological aspects of the environment that might affect it in a positive or negative way currently and in the future.

Purpose of mission statement

guides the actions of the organization and inspired employees and investors. Should convey the nonprofit's essential purpose, approach and values distinguishing it from other organization.

Horizontal linkages

help ensure coordination between units at same level of a nonprofit

Auditing and financial analysis

helps ensure that a non-profit stays on track, both in stewarding its resources effectively and in following the law and ethical principles -Auditing- The most comprehensive report for evaluating fiscal condition. Sometimes required if a nonprofit makes over a certain amount of money annually. -Financial Analysis- an internal review of its financial statements to help determine whether new systems or strategies need to be developed. -Statement of Financial Position-enables stakeholders to assess the organization's current financial condition -Statement of Activities- summarizes the financial transactions that have increased and decreased net assets, enabling the readers to evaluate fiscal performance, assess the ability to continue services, and evaluate managerial stewardship -Statement of Cash Flows-Allows the reader to assess the nonprofit's ability to generate future cash flows, its ability to meet financial obligations, and the reasons for the differences between cash receipts and payments -Statement of Functional Analysis- classifies expenses by function (program, supporting, fundraising, etc.) and by object or natural classification (salaries, supplies, travel, etc.) in a matrix forma. Helps in judging how staff are allocating their time, supplies, space, and other resources. -Financial Indicators and Ratios- computing certain ratios and other financial indicators to evaluate fiscal well-being -Program Efficiency Ratio (program expenses divided by total expenses) -Fundraising Efficiency Ratio (fundraising expenses divided by contributions other than grants) -Unrestricted Net Assets Ratio (Unrestricted net assets divided by total expenses) -Current Ratio (Current assets divided by current liabilities) -Acid-Test Ratio(current assets minus inventories divided by current liabilities) -Days in Accounts Receivable Ratio (Accounts receivable multiplied by 365 and divided by operating revenue) -Financial Literacy- at least one person on the board or executive managers need to be educated in terms of financial processes

Budgeting

important planning for what revenues and expenses the organization expects -Producing a Realistic Budget-need to be realistic, consistent with strategic objectives, flexible, and measurable -Estimating and Reviewing Revenues and Expenses- trying to estimate how much money they will receive and how much they expect to spend in each department to achieve mission's goals

Information processing needs

important so that the right people get the info they need to do their jobs. A nonprofit's structure is key to proper information flow. Info needs to flow horizontally as well as vertically to link employees, work units, and organizational levels. As information processing needs increase, a nonprofit needs to increase horizontal and vertical linkages.

Scenario analysis

is a technique for developing scenarios describing possible future situations. Each scenario is evaluated on the likelihood of occurrence and likely positive or negative impact on the nonprofit.

Effective leaders are not all the same

nonprofit leaders come in all physical forms and personality styles; individuals can be taught to be leaders; they are not inherently born with characteristics that determine if they will be good leaders or not.

Influence on ethics at personal level

personal sense of right and wrong that he or she brings to the workplace. Ethical behavior tends to be linked to an individual's demographic and personality characteristics. Locus of control refers to how much control and responsibility individuals believe they have over what happens to them. Those with an internal locus of control take more responsibility for the things that happen to them in life. Though individuals have predispositions to evaluate the ethics of a situation in a certain way, they are open to being influenced by company guidelines, value statements, and codes of conduct. The goals of training should be to build moral awareness, frame moral decision making, clarify moral intent, and encourage more action.

Uncertainty

refers to the variability of the items or elements on which work is performed. This can be measured by the number of exceptions encountered during the production of outputs. A fundraising event scheduled to be held outdoors has uncertainty related to weather conditions. Contingency plans need to be developed in case of bad weather.

SWOT analysis

situation analysis which identifies potentially relevant internal factors. The goal is to provide a complete list of factors, not to prioritize them. Strengths, Weaknesses, Opportunities and Threats.

Influence on ethics at societal level

societal pressures encourage nonprofits and those working within them, to go beyond the letter of the law in the ethical level of their governance and operations.

Process of strategic planning including attention to emerging elements

strategic planning is the critical link between abstract aspirations and concrete operations. Formal strategic planning generally involves a series of steps that include getting ready to plan, assessing the situation facing the nonprofit, linking relevant internal and external factors, identifying strategic issues, and forming strategies designed to address those issues.

Technology used to complete tasks

the machines and hardware used to perform work but also the skills and knowledge of workers. Information needs are a function of three dimensions of technology: Complexity, Uncertainty, and Interdependence. They increase as these increase.

Political, cultural, and institutional influences: Organizational culture

the set of key values, beliefs, understandings, and norms shared by organizational participants. Underlies the behavior of the organization as a whole and of the participants. Unwritten but can be observed in stories, slogans, ceremonies, dress, and office layout.

Banking relations

use of banking services reflects how prudent an org is in stewarding its resources. A nonprofit should compare banks before making a decision.