Nonprofit capacity and social performance: mapping the field and future directions

Abstract

Nonprofit organizations are critical actors in the Sustainable Development Goals as they provide a wide range of social services to the community and contribute to creating a sustainable future. They must compete for funding or government contracts by showing high social performance. Among the top factors influencing social performance is capacity, and it has received considerable attention in public and nonprofit literature. Capacity refers to the resources, capabilities, and practices required to perform their functions to achieve the social mission and high social performance. However, studies concerning capacity linked with social performance remain controversial. Understanding the linkage between capacity and social performance is relevant to funders, board directors, and management as it helps them enhance organizational performance. This research aims to assess the flow of knowledge in the study field and make recommendations for future research. The study focuses on capacity of nonprofits and thoroughly reviews the literature using complementary bibliometric analysis: co-occurrence analysis of keywords, sources, and authors and bibliographic coupling analysis of documents. We conduct a systematic analysis of peer-reviewed journal articles published between 1955 and 2022. Seven significant themes emerge among the most prominent researchers: (1) the link between capacity and social performance; (2) dimensions of capacity; (3) human resource capacity linked with social performance: (4) financial capacity linked with social performance; (5) capacity building linked with social performance; (6) collaboration and capacity; and (7) factors affecting capacity–social performance. The literature on nonprofits is determined to have inconsistent findings regarding the relationship between capacity and social performance. Research on various factors influencing capacity–social performance relationships is also scarce. This article highlights major principles in the discipline and identifies significant theoretical gaps in the body of knowledge. It also outlines the conceptual foundation for the study and makes recommendations for further research. From a managerial standpoint, the study sheds light on whether capacity is linked to higher performance levels and provides policymakers with guidelines on the implications of capacity building and collaboration.