Nonprofit Growth Research Articles

Nonprofit Boards in Pursuit of Innovation for Growth: Views From the Frontline

Conventional thinking holds that for-profits need to innovate for growth to be financially viable. Nevertheless, to date, we have not recognized the importance of nonprofit growth and innovation’s function here. Yet despite “innovation for growth” being an even greater imperative for nonprofits in their quest to resolve societal challenges, prior sector research has, at most, only superficially investigated this construct new to nonprofits. In this first-in-field conceptual project, we weave together a comprehensive literature review with findings from 26 interviews with nonprofit directors. In doing so, we advance the scattered nonprofit-innovation and organization-performance research by describing nonprofit innovation for growth and why it matters. And we originally conceptualize that nonprofit boards seem to prioritize particular factorial determinants new to nonprofit-innovation research in their effective pursuit of innovation for growth.

Beyond Donations: Isomorphism and Revenue Mix in Nonprofit Start-Ups

The literature on nonprofit growth contains a practical ambiguity regarding which types of revenues to cultivate as a start-up nonprofit. The revenue portfolio of a more established organization may be inappropriate (or unattainable) for a new one, but there may be perils in relying too long on sources of nonprofit start-up capital. We posit that nonprofit entrepreneurs choose to mimic larger organizations in their field for growth rather than rely on the revenue mix of their start-up stage. This study uses two different dynamic econometric models to estimate the role of revenue type and other organizational factors in the growth of young and small nonprofits. We find that mimicking the revenue habits of larger organizations is generally (but not universally) advisable, with most conclusions sensitive to subsector.

Do Institutions and Happiness contribute towards Nonprofit Growth: A Cross Country Macroeconomic Analysis

Nonprofit organizations are crucial, especially where neither government nor private organizations can sufficiently ease the often complex and extensive societal problems. They act as strategic partners in responding to problems, such as unemployment, poverty, and income inequality. The government provides them incentives in the form of tax relief, loan guarantees, and contracts to stimulate nonprofit growth, however, this growth is often triggered by other non-financial factors. This may be the reason for a flourishing nonprofit sector in less developed countries. Hence, this paper aims to highlight these other factors and assess their impact on nonprofit growth at a macro level. Moreover, the relationship might not be linear. For example, you might see an exponential growth of nonprofits when Generosity level increases, hence, we also explored these curvilinear relationships. Specifically, this study investigates the effect of different non-financial factors on nonprofit growth. These included factors that relate to the quality of institutions like Rule of Law, as well as factors such as Social support, Freedom to make life choices, and Generosity that are responsible for an increase in happiness level. Other factors like tax, Interest rate, Inflation, GNI per capita, Government social spending, Population size, Urbanization, and Female workforce were taken as control. Nonprofit growth was measured by the consumption expenditure of nonprofit institutions serving households as a percentage of GDP. For this, a balanced panel Dataset was constructed and analyzed consisting of 54 countries for 14 years from 2005 to 2018. The results suggested that inflation, interest rates, tax rate seem to have a positive and significant effect on nonprofit expenditure, whereas female workforce, per capita income, urbanization, tax revenue, and population size seems to have a negative and significant impact. Government social spending along with social support in the public also has a significant and positive effect on nonprofit. Interestingly, higher levels of freedom to make life choices seem to inhibit nonprofit growth. Similarly, institutional quality in terms of the rule of law also seems to have a negative and significant effect. These two are normally higher along with female participation, in developed countries with the stronger and active government giving less room for nonprofits. Moreover, generosity in the public doesn’t seem to predict nonprofit growth both in linear as well as the curvilinear form of relationship. Findings imply that government direct like taxes and indirect response like social spending seems to benefit able for nonprofits. They thrive in stagnate economies with inflation and higher interest rate, but lower-income and taxes, chiefly because of inactivity of government in social areas give rise to the window on the opportunity for them to thrive.

Democracy and Nonprofit Growth: A Cross-National Panel Study

This study hypothesizes that a country with a high level of democracy should experience more extensive growth in its nonprofit sector than authoritarian or less democratic countries, controlling for the relevant social and economic variables. We tested this hypothesis using cross-national longitudinal data. The results indicate that a democratic political system affects positively on the emergence and growth of the nonprofit sector across sample countries. However, the relationship appears to be non-linear, although nonprofit activities are sustained at a certain level. We also found different developmental trajectories among the nonprofit sectors that depended on how different countries operated their democratic political systems.

Nonprofit Growth and Decline During Economic Uncertainty

ABSTRACTDuring times of economic uncertainty, why are some human service organizations able to grow while others fail? In this paper, we present qualitative data on differences in the institutional logics adopted and managerial strategies used by child and youth–serving organizations during the 2008–2012 recession. We compare organizations that grew with those that experienced decline, looking particularly at those organizations with increased versus decreased dependency on government funds. We find differences in service population allowed some organizations to remain successful within a government-partnership logic; others faced decline if they did not entrepreneurially adopt a market logic.

How does political democratization affect nonprofit growth?

How does political democratization affect nonprofit growth?

What Accounts for the Variations in Nonprofit Growth? A Cross-National Panel Study

Previous studies of nonprofit growth have lamented the lack of cross-national longitudinal data measuring the size of the nonprofit sector across countries, which has made it difficult to assess the current state of knowledge about the nonprofit sector beyond national boundaries. Recent progress in measuring nonprofit growth using panel studies or cross-national data has compensated for the limitations of the existing research, but even the recent data are either country specific or cross sectional in nature. This study takes on the challenge of supplementing the current research by measuring nonprofit growth using internationally comparable longitudinal data. Specifically, this study focuses on whether certain key indicators of the overall state of the economy can be used to predict and explain the size of nonprofit sectors cross-nationally. The overall state of the economy has considerable relevance for nonprofit growth, as it influences the levels of government funding and private philanthropy that benefit the nonprofit sector. The results indicate that the existing theories about the nonprofit sector account for variations in nonprofit growth but are limited in their explanations of the underlying dynamics of such variations beyond national boundaries. Social origins theory is a useful addition that helps to explain cross-national variations in nonprofit growth. Importantly, the interplay among the government, private philanthropy, and the nonprofit sector is dynamic, and its effect on economic indicators varies across nonprofit regime types when sociodemographic variables are controlled.

Testing an Economic Model of Nonprofit Growth: Analyzing the Behaviors and Decisions of Nonprofit Organizations, Private Donors, and Governments

This study draws an economic model of the growth of nonprofit organizations by analyzing the behaviors of three major actors—nonprofit organizations, private donors, and governments—in making decisions on the allocation of limited resources for nonprofit services. Since decisions made by each actor affect resource allocation, it is important to understand what drives these decisions. The model was tested using an unbalanced, 463 panel dataset collected from 28 OECD countries over a 23-year period. The results indicated that macro- and micro-economic trends and government policies framed the decision premises of the three major actors, which led them to leverage the supply and demand for goods and services and, in turn, determined how they allocated limited resources for nonprofit services. This result implies that understanding the interdependencies of all sectors of the economy is critical to comprehending the size and development of the nonprofit sector. Effective management of micro-economic policies and macro-economic stability is necessary. More important, however, is understanding how a decision in one part of the economy will have intended and unintended effects on the nonprofit sector.

The Impact of Government Fiscal Policy on Nonprofit Growth: A Cross-County Panel Study Testing the Social Origins Theory

The Impact of Government Fiscal Policy on Nonprofit Growth: A Cross-County Panel Study Testing the Social Origins Theory

Measuring the Growth of the Nonprofit Sector: A Longitudinal Analysis

AbstractScholars have examined the effects of various environmental factors on the nonprofit sector to elucidate the role of nonprofits in modern society. However, researchers report a paucity of information on nonprofit growth using longitudinal data, especially outside the United States. This article analyzes 40 years of political, economic, and sociodemographic data in South Korea to test theories of nonprofit growth and to determine whether the concepts and theories developed for Western societies can be successfully applied in South Korea. The results show that demand‐ and supply‐side economic theories account for variations in nonprofit growth, but the existing socioeconomic explanations fail to recognize the political influences on nonprofit development. Nonprofit organizations have emerged from social and economic necessity but have also been nurtured within a political framework.

Networking Modes and Performance in Israel's Nonprofit Organizations

The present article examines the relationship between networking modes and performance for 138 nonprofits in Israel. We draw upon the bridging and bonding concepts and social exchange theory and introduce the sharing and consulting networking modes to predict performance in terms of organizational growth in resources. We suggest that differences in networking modes (1) reflect variations in organizational size and age and (2) affect organizational growth in resources. We show that (1) the consulting networking mode is more frequent among managers of smaller and younger nonprofits, (2) sharing is characteristic of managers in older and larger nonprofits, (3) sharing has a strong effect on organizational growth, and (4) the sharing and consulting modes are better predictors of organizational performance than those of bonding and bridging. The results indicate that nonprofit growth in organizational resources is possible with networking when managers aspire to higher involvement in the networking process due to the scope and extent of goals.

Four Network Principles for Collaboration Success

Keywords: Nonprofit strategy, foundation strategy, nonprofit networks, collaborationIntroductionDespite high hopes, hard work, and significant investment, the social sector has experienced countless partnerships that have failed to live up to expectations. How are some collaborations able to achieve spectacular results while others fail spectacularly? This article introduces four key operating principles that build a culture for collaboration success.In developing these principles, we draw upon our own research and work with partnerships and networks. Jane Wei-Skillern (now on the faculty at UC Berkeley's Haas School of Business and Stanford Graduate School of Business) began her career studying nonprofit growth and became very aware of the many challenges to organizational scale as the primary path to mission impact. At the same time, she identified several examples of nonprofits that had dramatically increased their mission impact through a strategy of cultivating external networks rather than organizational level growth. She has since focused on studying leading edge networks and published several articles and HBS case studies on the topic. Nora Silver is on the faculty of UC Berkeley's Haas School of Business and Director of the Center for Nonprofit and Public Leadership. Before joining academia, she developed and supported a network of foundations and nonprofits to increase, strengthen and diversify volunteerism for 13 years. Her research is on multi-sector leadership and nonprofit networks. The four principles emerged from our collective experience.To illustrate the framework we use the case of the Energy Foundation (EF), a $100 million foundation that is among the largest philanthropic funders advancing clean-energy policy, as a prime example of a foundation that has successfully catalyzed networks. Although a leading funder in the sector, EF may be the largest foundation that most people have never heard of. This is entirely by design. To advance its network, EF routinely acts to build the field of energy philanthropy, though not necessarily EF as an institution. EF exemplifies those four principles.A rich literature on applying networks in the nonprofit sector has emerged in recent years (Plastrik & Taylor, 2006; Monitor Institute & GEO, 2011; Wei-Skillern, 2008), with research on network structures (Grossman & Rangan, 2001; Huggett, Kramer, & Smith Milway, 2010), systems (Kramer & Kania, 2011), and technological tools (Kanter & Fine, 2010; Scearce, Kasper, & McLeod, 2010). The leadership skills and culture that are essential to successful network building, however, are often overlooked. We maintain that these skills are the critical factors that differentiate failed or mediocre collaborations from those that achieve transformational change. Yet, the leadership mindset and skills critical to the success of networks are the opposite of what is typically rewarded in the philanthropic sector. Since the skills for successful networking are counterintuitive relative to common practice, they are worth highlighting here:Focus on mission before organization. Effective network leaders build strategies that advance the mission even when it does not result in direct benefits to their organization.Build partnerships based on trust, not control. Leaders depend upon shared values and trust rather than top-down controls and accountability systems.Promote others rather than yourself. Network leaders exhibit a strong norm of humility above all else, sharing credit and foregoing opportunities for individual advancement and institutional growth and brand building.Build constellations rather than lone stars. Leaders who catalyze successful networks acknowledge their weaknesses as readily as their strengths. The goal is to build the larger system that is necessary for delivering on the mission, not to become the market leader.Network leaders have succeeded often not because of, but despite, the contexts in which they operate. …

Golfing Alone? Corporations, Elites, and Nonprofit Growth in 100 American Communities

We examine the link between corporations and community by showing how corporate density interacts with the local social and cultural infrastructure to affect the growth and decline of the number of local nonprofits between 1987 and 2002. We focus on two subpopulations of nonprofits in 100 American cities: (1) elite-oriented cultural and educational institutions and (2) social welfare-oriented organizations. We find that corporate density enhances the growth of both types of nonprofits, as does location in the northeast United States and a long-established business community, but corporate density is especially potent for the growth of elite-oriented nonprofits—but not social welfare nonprofits—when local networks and cultural norms support elite mobilization. We conclude that despite globalizing trends, the local geographic community continues to be an important unit of analysis for unpacking multisector organizational processes among corporations and nonprofits.

The determinants of non-profit growth: do social enterprise initiatives matter?

Although there are an increasing number of academic articles on social enterprise, there is surprisingly little work regarding its impact on non-profit growth. We test if non-profits that adopt social enterprise, or strategies to generate their own revenues, are more likely to grow. We develop several predictions about potential factors that could affect non-profit growth based on existing non-profit, finance and business literature. We test our predictions using a sample of large non-profits spanning all sectors.= The paper provides a better understanding of non-profit growth and the role social enterprise plays in that growth. Although social enterprise is positively correlated with growth, other factors seem to have a greater impact. We find that high growth non-profits are younger, possess greater average surpluses, but have higher fluctuation and therefore greater risk in these surpluses. They maintain greater cash holdings, do not rely on endowments and have smaller boards. High growth non-profits do invest in capacity building.

Asian Community Mental Health Services at 35: A Pioneering Ethnic Organization (1973–2008)

Asian Community Mental Health Services is a nonprofit organization that delivers mental health services to primarily Asian and Pacific Islander communities. From its early beginnings and over its 35-year history, the agency has had to overcome numerous challenges, including gaining legitimacy as a culturally specific nonprofit, combating stigma surrounding mental health issues within the Asian Pacific Islander community, building resources to fund service delivery, and developing an educated and culturally sensitive workforce. The history of the organization highlights the multiple challenges and rewards of developing a culturally specific nonprofit in an urban area as well as the important role that internal operations play in relation to nonprofit expansion and growth.

The Bayview Hunters Point Foundation for Community Improvement: A Pioneering Multi-Ethnic Human Service Organization (1971–2008)

The Bayview Hunters Point Foundation for Community Improvement is a nonprofit organization established in 1971 to defend the legal rights of African-Americans living in its community. Over the years, the agency diversified its services to include mental health and substance abuse treatment, violence prevention, youth programming, and HIV services. The organization has overcome multiple challenges during its 37-year history in relation to social, political, and economic changes that have influenced the way the organization has financed and delivered its services. The history of the organization presents a collaborative approach to community problem-solving and exemplifies the important role that external relationships play in relationship to nonprofit growth and survival.

The Growth of the Nonprofit Sector in the Netherlands

In the past century, the Netherlands’ nonprofit sector has grown tremendously. Nowadays, it is one of the largest in the world. This article considers the growth of the sector in general, and pays special attention to its main domains: education, health care, social work, the arts, and culture. It argues that three factors explain the sector’s current size. First, the Netherlands has a long and rich tradition of private initiatives, ranging from the medieval guilds and church-related activities to pillarization in the 19th and 20th centuries. Second, the posture of the government created a political environment that stimulated nonprofit growth. Finally, the crucial factor in the expansion of the nonprofit sector is the scheme of collective finance and private provision for key welfare state services. This scheme started ineducation and later spread to health care and social services.

The Marketization of Welfare: Changing Nonprofit and For-Profit Roles in the American Welfare State

Recent changes in government spending coupled with demographic and other pressures have produced a significant change in the basic structure of the American social welfare system. The widespread pattern of government-nonprofit partnership that characterized the system in the 1960s and 1970s seems to have given way in the 1980s to a system whose principal characteristic is the dominance of markettype relationships. One facet of this change has been the emergence of fees and sales as the principal source of nonprofit growth, not only among hospitals and universities, but also among social service and civic organizations. Equally important has been an accelerated growth in the provision of welfare services by for-profit firms, especially in such fields as short-term specialty hospital care, outpatient and clinic care, and a broad range of social services. Although these trends may have positive results, they raise serious questions about the future of the nonprofit sector and about access to care on the part...

The growth of the nonprofit sector in the 1980s: Facts and interpretation

AbstractThe nonprofit sector was the growth sector of the 1980s. This is the conclusion reached from detailed examination of the growth trends of major industry groups in New York State in the years 1981 through 1987. The analysis in this article suggests that the growth of the nonprofit sector was due primarily to the strong orientation of the economy toward services, where the nonprofit sector has traditionally had an important presence. Within service industries as a whole, the nonprofit and for‐profit sectors grew at comparable rates; however, nonprofit growth was concentrated in semipublic services and in services where information is often difficult for consumers to acquire and understand, while the for‐profit sector grew in simpler and more privately oriented services. The analysis shows that the nonprofit sector filled much of the gap left by reduced or stagnating government services. However, the growth of the nonprofit sector may be difficult to sustain in the future if sufficient entrepreneurial talent and other resources are not forthcoming.