Nonprofit Leadership & Management
Nonprofit leadership and management is an important area of concern because of the impact of nonprofit organizations on society. The mission statements of most nonprofits are geared towards helping people or addressing a need that is not met through government or private sources. For a long time, nonprofit leadership and management were not considered a priority because the organizations were doing good work. However, as nonprofits grow and become more complex and as funding sources demand tighter accountability for the use of funds nonprofits find themselves in a position of having to act more like for-profit businesses in structure, strategy and accountability. Accountability in any organization starts with top management and the leadership team. Without these individuals directing and leading the organization in the proper direction, it is unlikely that nonprofits will grow and expand. There is more emphasis on formal training for nonprofit executives and board members to increase their knowledge of their responsibilities and their abilities to support organizational sustainability.
Keywords Advocacy; Articles of Incorporation; Board; Development Officer; Executive Director; Fundraising; Leadership; Nonprofit fundraising and development; Program Officer; Volunteers
Management: Nonprofit Leadership
Nonprofit organizations are legal entities that are formed with a mission to do work in the interest of specific constituencies. For example, a nonprofit organization could be formed to support educational interests, community development, address health or housing issues and other areas that are perceived to have a need. Many nonprofits do not sell a product or service like a for-profit business although nonprofits may do so. Instead, many nonprofits receive the bulk of their funding through fundraising for personal donations, or through government and private grants.
Nonprofits, like for-profit businesses, are growing rapidly. Dolan (2002) noted that in a ten-year period, nonprofits grew from 1.2 million to 1.6 million. Nonprofits often do work that no one else will do. Dolan (2002) also notes that nonprofits are 7% of the workforce, employing more people than federal and state governments combined to the tune of over 11 million workers. Nonprofit organizations, like small businesses, are often located in the community, giving people an opportunity to work where they live. Nonprofits also give employees an opportunity to do something that matters, and employees can often receive intrinsic value from the knowledge that the work that is done helps others.
While for-profit companies have always had a focus and emphasis on leadership, management and continuous improvement in all areas of business, nonprofits have been more concerned that the result of nonprofit operations resulted in good work being done. But as nonprofits expand and grow, many may have budgets that rival for-profit companies and they must be run and managed like a business. In addition, private donors as well as government agencies and foundations are requiring nonprofits to be more professional and formal in the way they document the activities and use of funds and the way they manage the organization.
Organization of a Nonprofit
The top leader at most nonprofit organizations has the title of executive director. This individual is responsible for day-to-day leadership of the organization, supervision of staff and is the primary advocate and face of the organization. A board is a group of individuals who serve in a fundraising and advisory capacity providing oversight for a nonprofit. The executive director is the primary interface to and makes contact with the board. Small nonprofits may only have an executive director and fulfill their mission with the work of volunteers. Other large nonprofit organizations rival for-profit businesses with fairly large staffs. Nonprofits often have a development officer who is responsible for organizing and raising funds. The development officer has contact with personal donors and may write grant proposals to seek money from government and private foundations. A program officer is the nonprofit employee in charge of developing, managing and monitoring the programs the nonprofit offers to its constituents. A communications officer manages the public relations and marketing for a nonprofit organization.
All nonprofits need volunteers to fulfill their missions. Volunteers are unpaid workers who either give their time, financial support or advocate for the organization. Volunteers may also recruit others to become involved in the organization. Volunteers are often people who are passionate about the work a nonprofit engages in and enjoy spending time serving. Larger and more organized nonprofits often provide training for their volunteers. Some organizations that serve sensitive populations such as children may also require volunteers to undergo training and even background checks to avoid the possibility of liability on the part of the nonprofit as a result of the actions of a volunteer. While volunteers are useful, they can be difficult to control in that they are giving freely of their time. Some nonprofits specify what is required of volunteers and provide guidelines for volunteer behavior and minimal amounts of time that a volunteer must give to remain in good standing. In this way, people who are not truly dedicated are eliminated.
Individuals who decide to become involved with a nonprofit organization as an employee are often people who are dedicated to the mission of the organization. Brown and Yoshioka (2003, abstract) described a nonprofit's mission as "a strong management tool that can motivate employees and keep them focused." Nonprofit organizations typically push the value of being involved in an organization that supports communities or fights social ills to balance the fact that many nonprofits do not always have budgets to pay salaries comparable to for-profit organizations. Competition for good nonprofit employees can be fierce. However, says Stephen C. Rafe, “Most volunteers who are truly service-oriented need little recognition. For them, the satisfaction comes from helping, from contributing to a job that needs to be done, and from the feeling that they’re appreciated and are making a difference.” (Rafe, 2013)
As nonprofits grow and expand, they become increasingly interested in capacity building. Capacity building is a way in which nonprofits improve the value of internal processes and resources to be able to expand the work that is done. Expansion can mean being able to serve more people of a different population or it can mean serving more people of the same population. It can also mean being able to offer additional services. Internal capacity also means better skills among employees, better management of technology and processes, and better ability to raise and manage funds.
Inter-organizational networks may bring together two or more nonprofits and are “becoming the new shape of governance as they bring more opportunities to increase the capacities of communities” (Kapucu and Demiroz, 2013). Large scope services such as health care delivery, disaster preparedness and response, or disease control exceed the capacity of single organizations and require community capacity for collective action, thus improving communities’ capacity to achieve service delivery goals and increasing their well-being. Fostering involvement of community stakeholders, especially nonprofit organizations, and other actors for service provision distributes the overall burden of individual organizations.
Resources usually are the biggest obstacle for nonprofits. Cargo (2005, p.552) noted "the nonprofit sector is characterized in large part by its struggle to match resources with oversized missions." Nonprofits with lofty missions must realize that there is only operational capacity to provide services to a finite number of constituents. Nonprofits usually struggle with the amount of money needed operationally versus the amount of money spent on programs. Some infrastructure is needed to provide services but donors and grantmakers are most interested in minimizing administrative costs and maximizing direct service costs. Some nonprofits also engage in selling of products and services to provide value to constituents and to create a revenue stream for the organization. There are nonprofits that are connected to for-profit companies and vice versa where the for-profit company provides funds for the nonprofit. In other cases, a for-profit wants to engage in a social mission and needs a nonprofit structure to do it.
As funding sources require more professionalism in operations and reporting from nonprofit organizations more nonprofits seek training and help in capacity building and organizational development. For years, for-profit companies have seen the benefit of investing in leadership to provide value to companies. Now, many nonprofits are doing similar things to bolster nonprofit leadership. At times, this can be at the executive director level and may also include board development. Other leadership programs emphasize leadership with staff assuming that many new leaders of nonprofits may be sources from within the organization. Dolan (2002) noted the decrease in the provision of certain services by government means that nonprofits may have to step up to the plate to fill the gaps. Increased demand for nonprofits to provide services has increased the demand for...
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