Nonprofit Capacity Research Articles

Evaluating the Relationship Between Nonprofit Capacities and Organizational Effectiveness During a Global Pandemic

Guided by the contingency model of capacity effectiveness, we examine the relationship between organizational capacities and performance indicators during COVID-19. We conceptualized operational capacity and board leadership capacity as process oriented to ensure organizations’ effective functioning and to demonstrate accountability. Technological capacity and networking capacity were defined as resource oriented to help accomplish organizational goals. We used two effectiveness indicators to capture the input-output success measured by goal attainment and an organization’s ability to learn and adapt to improve its performances based on evaluation data (i.e., professional data use). Survey data collected from nonprofits located in a southeastern U.S. state showed that generally nonprofits were not performing well due to operation challenges. Operational capacity and technological capacity were negatively related to goal attainment; however, these two capacities and board leadership capacity were all positively related to professional data use. Implications describe how to turn a crisis into an opportunity to build resilience.

Tracing the effect of the paycheck protection program on nonprofit capacity to sustain payroll and services during COVID‐19

AbstractThis study explores the effect of government fiscal stimulus on nonprofit performance during the COVID‐19 pandemic. More specifically, it investigates whether access to the Paycheck Protection Program (PPP) increased the ability of nonprofit organizations operating in the crisis context conditions to continue supplying funds for payroll and maintain effective delivery of services and programs after the initial revenue shock. The study findings are derived from the analysis of survey data collected from 160 Wisconsin nonprofit organizations in July and August 2020 linked to publicly available Internal Revenue Service tax filings. Regression analysis reveals a strong positive connection between the PPP loans and the nonprofit capacity to continue funding payroll and providing services within the next months of the pandemic. The empirical results suggest that the government stimulus policies offering direct economic assistance can indeed contribute to the continuity of nonprofit services and payroll in times of fiscal uncertainty, albeit the policy may not yield equally significant results across all types of organizations. This study increases the understanding of nonprofit performance during an extended revenue crisis, offering answers to policymakers, researchers, and practitioners interested in learning more about the efficacy of federal stimulus funding in enabling private organizations to mitigate the financial consequences of the COVID‐19 crisis.

Unrestricted funding and nonprofit capacities: Developing a conceptual model

AbstractUnrestricted or flexible funding practices are increasingly popular among funders. There is initial empirical support for the assumption that fewer donor‐imposed restrictions on funding have positive outcomes for nonprofit capacities, including the ability to better deal with external shocks such as presented by the COVID‐19 crisis. However, academic literature on the consequences of donor‐imposed restrictions is scarce, scattered, and lacks an overarching theoretical basis. In this article, we theorize how unrestricted funding may relate to nonprofit capacities and consequently effectiveness. Our theoretical propositions are derived from a review of the academic and gray literature as well as a theory‐based analysis of 20 in‐depth interviews with grantees receiving multi‐year unrestricted funding as a substantial part of their funding portfolio. We propose a conceptual model that hypothesizes how unrestricted funding may affect seven different nonprofit capacities: (1) financial management; (2) operational capacity; (3) staff management; (4) adaptive capacity; (5) strategic planning; (6) mission orientation; and (7) innovation. This framework can function as a much‐needed starting point to support academics and nonprofit leaders to better understand how unrestricted funding relates to nonprofit capabilities and consequently nonprofit effectiveness.

Creating and Validating a Capacity Measure for Nonprofit Organizations

Currently, there is no standardized, validated measure of nonprofit capacity that makes cross-organizational comparisons and research studies almost impossible. In addition, these shortcomings impede suggestions for nonprofit practitioners and educators, hindering the development of professional and educational curricula. This paper presents a new measure of nonprofit capacity based on the utilization of exploratory and confirmatory factor analysis. With a national sample of U.S.-based nonprofit organizations (N=1,216), the six factor model explained 69.6% of total variance in nonprofit capacity. Those six factors and respective variance are: (1) board 14.8%, (2) the influence of the external environment 13.4%, (3) program development 11.9%, (4) mission centrality 11.4%, (5) management capacities 9.8%, and (6) funding 8.6%. A standardized measure, such as the one created here, allows research across nonprofit subsectors and for cross-organizational research in a more systematic way. Without cross-organization comparisons, we cannot know if we are truly teaching best practices.

Using Self-Assessments to Improve Board Performance and Build Nonprofit Capacity

This paper presents the nonprofit board self-assessment tool as a valuable, formative addition to the toolkit of nonprofit stakeholders, including evaluators, who are focused on improving both board and organizational performance. Using self-assessment data from a study of 156 nonprofits, the study tested five hypotheses about the effectiveness of five nonprofit governance best practices: strategic planning, reducing ambiguity on the board, board giving, strong internal controls, and evaluating the chief executive officer. The study finds that some nonprofit management best practices are more effective than others when it comes to assessing board performance. Moreover, consistent with previous research, board members and CEOs occasionally view performance differently. The paper concludes with a discussion about how nonprofit organizations, evaluators, and others can use these findings, as well as self-assessment tools, to improve nonprofit board governance and strengthen organizational capacity.

Using Self-Assessments to Improve Board Performance and Build Nonprofit Capacity

This paper presents the nonprofit board self-assessment tool as a valuable, formative addition to the toolkit of nonprofit stakeholders, including evaluators, who are focused on improving both board and organizational performance. Using self-assessment data from a study of 156 nonprofits, the study tested five hypotheses about the effectiveness of five nonprofit governance best practices: strategic planning, reducing ambiguity on the board, board giving, strong internal controls, and evaluating the chief executive officer. The study finds that some nonprofit management best practices are more effective than others when it comes to assessing board performance. Moreover, consistent with previous research, board members and CEOs occasionally view performance differently. The paper concludes with a discussion about how nonprofit organizations, evaluators, and others can use these findings, as well as self-assessment tools, to improve nonprofit board governance and strengthen organizational capacity.

Open and shut: Identifying activity patterns by volunteer organizations active in disaster using space-time permutation scan statistics

After a catastrophic flood, the pace of residential cleanup is an important precondition of community resilience. When the process is fast, cleanup reduces additional health or economic risks by preventing structural or electrical damage from escalating. Mobilizing volunteers to complete cleanup work quickly is a challenge that the U.S. Natural Disaster Recovery Framework has assigned to the nonprofit sector. Nonprofit coordination networks—such as those convened through volunteer organizations active in disaster (VOAD) in the United States—aim to create systems of communication that improve the efficiency and equity of post-disaster cleanup. However, the process of coordination and the conditions that encourage quick action remain understudied. The aim of this paper is to identify the impacts of network coordination on the timeline of post-disaster cleanup using geospatial analytics. To do this, we apply a space-time permutation scan statistic (STPSS) to data on the speed at which organizations from the North Carolina VOAD (NC VOAD) closed requests for volunteer assistance following Hurricane Florence in 2018. STPSS results identify clusters of requests that were filled at different speeds through space and time. In total, we identified six space-time clusters indicative of coordinated cleanup. Exploration of clustered data helps to generate new questions about why coordination sometimes happened months after the disaster and suggests ways to use data exploration to inform network function and to leverage the unique capacities of individual nonprofits while also prioritizing housing resilience in socially vulnerable communities.

COVID-19 Impacts on Border Community Organizations

The COVID-19 pandemic massively affected the nonprofit sector. This article explores how the crisis has impacted nonprofit organizations at a U.S.–Mexico border community with a large population of minorities and migrants. Guided by resource dependency theory and the nonprofit capacity building framework, surveys reveal that nonprofits with less financial support from the government sector, low leadership, and weak operational capacities receive critical impacts from the pandemic. The findings also show that local nonprofits are bonded closely to the community during the pandemic, which reflects the collectivistic culture in Hispanic/Latino communities. This study provides important insights on how local nonprofits with limited resources and an increase in demand from vulnerable populations struggled with the pandemic.

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

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.

Building social capital through nonprofit capacity building programs: The case of Omaha Community Foundation

ABSTRACT Community foundations can play an essential role in organizing, facilitating, supporting, and promoting the development of social capital among community-based nonprofit organizations. Accordingly, the Omaha Community Foundation has delivered a year-long capacity-building program for local nonprofit leaders for over eight years. A distinctive feature of this program is the cohort design that prioritizes relationship building among cohort members, while also providing technical assistance and training to program participants. A key outcome for this program has been the increase in social capital among program participants. This case study will review the evolution of this capacity-building program and how social capital building within a cohort model has been the consistent outcome since the program’s beginning. Discussion will include recommendations for how community foundations engage in building social capital in community-based nonprofit organizations.

Nonprofit capacities and emergency management during the COVID-19 pandemic: Insights from a Taiwan-based international nonprofit organization.

During the COVID-19 pandemic, some nonprofit organizations (NPOs) have been struggling to maintain their operations, while others are able to coordinate with partners to provide programs and services locally and globally. This study explores how NPOs are able to survive and actively engage in local and global COVID-19 responses by investigating the organizational capacities of the Tzu Chi Foundation, a Taiwan-based international NPO. This study employs interview data and secondary data from a variety of sources to answer the research questions. Through this case study, we find that Tzu Chi Foundation's capacity to coordinate local and global COVID-19 issues quickly, broadly, and effectively can be attributed to three main factors: (1) clear mission and charismatic leadership, (2) rich experience of disaster relief and recovery strategies, and (3) committed and active volunteers. Moreover, we find that financial management capacity and adaptive capacity are two crucial kinds of capacity for enabling the Tzu Chi Foundation to survive and continuously engage in emergency responses during the pandemic. We conclude with implications for future nonprofit capacity and emergency management research.

Supporting non-profit and co-operative housing in Halifax, Nova Scotia

ABSTRACT The social housing sector is critical in providing housing to a range of households, but housing providers have been met with challenging conditions in recent decades. This study of non-profit and co-operative housing providers and policy makers in Halifax Regional Municipality (HRM), a mid-sized city in Nova Scotia, Canada, found significant resource capacity limitations due their limited size, experience, and awareness of existing policies and programs. Interviews showed that their limited network and political capacity also present significant challenges to expanding their supply. A policy review showed that most current tools, programs, and policies have not been designed to address the capacity limitations in the sector. The recent political shift seen through the 2018 National Housing Strategy could improve the capacity of non-profits and co-ops in Nova Scotia, though this would involve partnerships and consultation with the sector, which would diverge sharply from historical patterns.

Characteristics and Organizational Capacity of Nonprofits in Rural, Persistently Poor Southern Counties in the United States

The present study focuses on organizational capacity of nonprofits located in rural, persistently poor counties in the South region of the United States, an area of the country that encapsulates the majority of rural poverty. IRS Form 990 data were utilized for recruitment and to obtain demographic characteristics for nonprofits in the area of interest (N=3,530). Emailed and mailed surveys to all qualifying organizations sought to measure organizational capacity. Data from 292 nonprofits were examined in a descriptive analysis. Overall, the participating rural nonprofits scored moderate to high in most dimensions of organizational capacity. Financial management, strategic planning, collaboration, and program planning were strengths in organizational capacity. Evaluation, succession planning, fundraising planning, human resources, and volunteer management were challenges. Study findings provide guidance to capacity builders and funders to guide future training, investments, and policy related to rural nonprofits and communities they serve.

Building Capacity to Alleviate Poverty Through National Service: An Evaluation Plan Guided by Community Partner Perspectives

This article explores how a national service program, the Mid-South VISTA Project (MSVP), has impacted community partner organizations through capacity-building activities. Housed at Mid-South University (MSU, a pseudonym), MSVP extends the community-engaged activities of campus units while building capacity at partner organizations. The project takes into account dimensions of nonprofit capacity building and how to navigate the community–campus partnership process in the context of the AmeriCorps VISTA program. The data presented in this article are part of a larger case study focusing on the impact of MSU’s community engagement center programs on community partner organizations. Findings from interviews with 15 VISTA supervisors guided the development of an evaluation plan that uses logic model domains to center mission alignment and reciprocity as outcomes of the partnership process.

The Nonprofit Starvation Cycle: Does Overhead Spending Really Impact Program Outcomes?

The nonprofit starvation cycle raises a fundamental question about the impact of overhead spending on nonprofit program outcomes and organizational effectiveness. We test this relationship using data on the U.S. nonprofit arts and cultural subsector from 2008 to 2018. Contrary to the conventional wisdom that lower overhead is better, the results of different model specifications consistently show an optimal level of overhead captured by an inverted U-shaped relationship between the overhead cost ratio and program outcomes. Increased spending on overhead can improve program outcomes up to the optimal point. Beyond this point, further spending on overhead can yield negative returns. The study contributes to correcting the unrealistic expectations surrounding overhead costs and argues for investing more in building sustainable nonprofit capacity. We discuss the implications of our findings for nonprofit charity monitors, donors, scholars, and other stakeholders concerned about nonprofit accountability and effectiveness.

Recovery Capacity of Small Nonprofits in Post-2017 Hurricane Puerto Rico

Problem, research strategy, and findings Although planners today generally agree that nonprofits should be involved in postdisaster recovery planning, they lack insight into the capacity of nonprofits to be engaged in recovery and whether this capacity differs by organization type. This could lead to the marginalization of small nonprofits in planning, affecting social capital formation and the sustainability of recovery plans. Using data from field research and a survey of registered nonprofits in Puerto Rico after the 2017 Hurricanes Maria and Irma, we compared the recovery capacity of small versus medium/large nonprofits. Our study shows that small nonprofits experienced lower levels of operational impact than medium/large ones but also reported lower levels of postdisaster grant funding and attended fewer postdisaster networking events and workshops. Our study also shows that small nonprofits desire additional training and technical assistance to engage with broader recovery institutions. Planners can help by providing such training and promoting networking between small and larger organizations to encourage institutional learning. Takeaway for practice Community-based recovery planning benefits from engaging with small nonprofits because they typically have greater connection and interest in local matters. Our study shows that small nonprofits may not have the capacity to engage in recovery despite wanting to do so. Planners can help small nonprofits to be better engaged in recovery by helping to build their capacity through pre-event training in disaster recovery, facilitating pre- and postdisaster workshops on recovery financing, and facilitating pre- and postdisaster networking.

More than meets the eye: Organizational capacity of nonprofits in the poor, rural South

BackgroundThe physical, social, economic, and political contexts in which organizations operate influence their mission and organizational capacity – the available resources nonprofits use to carry out their purpose. The current study examines organizational capacity by uncovering strengthes and challenges of rural human service organizations (HSOs) in rural, persistently poor counties in the South. Also considered is the impact of the environmental context. MethodsThrough a qualitative, multiple case study approach, nine HSOs in Georgia, Kentucky, and Mississippi were studied using semi-structured interviews with high-level administrators and thematic analysis. ResultsHSOs were skilled at enduring change in their communities, problem-solving, worker retention, fundraising, financial accountability processes, and partnership-building. Challenges included formal assessment and evaluation, quantity of communications, staff and volunteer recruitment, and minimal formal planning. The communities involved presented contextual barriers such as racism, limited workers, and transportation. ConclusionsThe present study establishes connections between environmental context and organizational capacity that have been minimally explored. The identification of barriers, strengths, and challenges allows for future research and informs policy and practice that is critical to addressing the systemic problem of underinvestment in rural areas.

Multitasking NPOs: An Analysis of the Relationship Between Funding Intentions and Nonprofit Capacities

Nonprofit organizations (NPOs) often find themselves under pressure to invest all of their available income in mission-related activities rather than in capacity building. We investigate one factor that can influence the decision to invest in such capacity-building tasks: funding sources pursued by an organization. Drawing on the benefits theory of nonprofit finance, we take these funding sources as predetermined by an organization’s mission and propose an extension of the theory by linking it to economic multitasking theory, which states that organizations prioritize tasks that offer greater and more measurable rewards. Through regression analyses of survey data from Swiss nonprofits, we analyze the extent to which funding sources sought affect the amount of effort invested in three areas of capacity building: public relations, impact focus, and resource attraction parameters. The results support the predictions of multitasking theory by showing that the effort invested in certain capacity-building tasks is affected considerably by seeking a specific funding source. The effects are stronger for resource attraction-related tasks than for tasks closer to the service delivery of NPOs. The results indicate that an organization’s mission affects not only the available funding sources but also the extent to which an organization invests in its capacities, which can lead to a ‘lock-in’ status for organizations.

Nonprofit Capacity to Manage Hurricane-Pandemic Threat: Local and National Perspectives on Resilience during COVID-19

ABSTRACT This paper examines nonprofits’ capacity for responding to simultaneous hurricane-pandemic threat, addressing: (1) strategies nonprofits use to deliver services during the COVID-19 pandemic, and (2) how natural hazards may affect nonprofit roles in emergency service delivery during a pandemic. Data come from a survey of New Orleans-based nonprofits demonstrating effects of pandemic on local nonprofit service delivery, and workshops with U.S. coastal community stakeholders exploring expectations for nonprofit roles in emergency operations nationwide. Nonprofits have applied resilient strategies including virtual operations, staff reductions, and funding diversification, but vulnerabilities remain. Findings guide a research agenda for building nonprofit and community resilience.

Cross the river by feeling the stones: How did nonlocal grassroots nonprofits overcome administrative barriers to provide quick responses to COVID-19?

This field report explores how nonlocal grassroots organizations provided effective and quick responses during the initial stage of the COVID‐19 outbreak in Wuhan and surrounding regions. Despite the lack of resources and local connections, they were able to overcome administrative failures and provide quick responses to the crisis. Built on a researcher‐practitioner collaborative action research project, three strategies facilitating grassroots organizations' quick and effective responses are analyzed and discussed: putting pandemic relief as the strategic priority of their organizations, leveraging social media platforms to scale up existing organizational networks and foster cross‐sector collaboration, and effective online trust‐building. As COVID‐19 unprecedently pushes nonprofits to transform how they deliver services and engage stakeholders, these findings have important policy and theoretical implications for an expanded view of how nonprofits may engage in disaster responses and how public and private funders may shift their funding strategies to cultivate such capacities of grassroots nonprofits.