Hoping to Enhance a Local Funding Relationship: Exploring Private Sector Business Preferences When Contributing to Nonprofit Organizations

ABSTRACT

Nonprofit organizations want relationships with private sector businesses because nonprofits rely on fundraising to generate income, a portion of which is provided through the charitable giving of the private sector. Who the private sector contributes to, why they give, and what variables positively influence more giving, are all questions nonprofit organizations continuously want answers to. The answers though are often arbitrary, reflecting subjective criteria based on individual business preferences, the economic status of the marketplace, the community context, and the credibility of the nonprofit program. Because the relationship is dynamic and the answers may continue to change, nonprofits must continue to ask.

This article discusses an exploratory effort to identify the funding attitudes and behaviors of private sector businesses who contribute to their local nonprofit organizations.

The results showed the majority of private sector businesses who responded said they support their local nonprofits primarily with cash contributions, and identified altruism as a key motivation for giving. Results also revealed that their funding choices are somewhat arbitrary with little formalized process for decision-making. Dollars are contributed primarily by direction of individual managers or owners who prefer informal relationships with their local nonprofit organizations, but expect funding requests to clearly explain how the dollars will be used. The findings, although limited, provide results that further examine this complex relationship, and perhaps provide insight into how the relationship could be enhanced for the ultimate benefit of both organizations' needs.     

The Impact of Familiarity and Perceived Trustworthiness and Influence on Donations to Nonprofits: An Unaided Recall Study

What affects donations? Is it all in “the ask,” or does brand image matter? In the nonprofit brands literature perceived trustworthiness and influence of the organization are important factors that increase constituents’ willingness to support an organization. We examined the association between a nonprofit organization’s familiarity, trustworthiness, and influence and the propensity of donations it receives. To this end, we used a questionnaire on attitudes toward nonprofit organizations and unaided recall of nonprofit organizations collected from a nationally representative sample. The attitudes data revealed that perceptions of nonprofits’ effectiveness and trustworthiness in Israel are not particularly positive. A multivariate fractional polynomial regression on the unaided recall results shows that while familiarity and perceived effectiveness are positively associated with the propensity of donations to nonprofit organizations, trustworthiness is not. We explain this surprising result by changes in Israeli social policy, political culture, and trust in institutions. We suggest different efforts that organizations can make to enhance their brand image and consequently increase donations.     

Developing a Marketing Strategy for Nonprofit Organizations: An Exploratory Study

Nonprofit organizations have grown tremendously in the last three decades. With this growth has come a greater interest from the nonprofit sector in the importance of marketing. Nonprofits did not apply marketing techniques until 1960–1970, but it is now a well accepted practice. Traditional marketing strategies do not work for nonprofit organizations, and this study proposes the development of a new marketing strategy specifically for this sector. Through the use of interviews and surveys, the authors examine issues of marketing strategy that are distinct for nonprofits. Unlike previous studies, this study examines these issues from the viewpoint of the nonprofit organization. The perception of marketing is different in nonprofit organizations, and the strategic implications of this finding are discussed.     

Practical Wisdom: Management’s No Longer Forgotten Virtue

Whistleblowing refers to the disclosure by organization members of illegal, immoral, or illegitimate practices to persons or organizations that may be able to effect action. Most studies on the topic have been conducted in North American or European private sector organizations, and less attention has been paid to regions such as Turkey. In this study, we study the whistleblowing intentions and channel choices of Turkish employees in private and public sector organizations. Using data from 327 private sector and 405 public sector employees, we find that public sector employees are more idealistic and less inclined to whistleblow externally and anonymously. Higher idealism among public sector employees does not moderate these effects. We find that private sector employees are more relativistic, and that they are more inclined to whistleblow through external and anonymous channels. More relativistic private sector employees are more likely to prefer external whistleblowing; however sector does not moderate the propensity to whistleblow anonymously.     

Beyond the crisis: the social economy, prop of a new model of sustainable economic development

This article analyzes the social economy (SE) as a third major sector between the public economy and the capitalist private economy. It examines the SE concept, compares it with the nonprofit sector and analyzes its microeconomic foundations, functions in the economic system and implications for economic policy. The field of economic analysis needs to be broadened, abandoning the mainstream monism that emphasizes the study of capitalist private enterprises and taking a plural view of the economy. In this approach, other forms of business organization, particularly SE enterprises, become a priority for analysis, opening up new scientific, social and economic vistas.     

Alignment of Divergent Organizational Cultures in IT Public-Private Partnerships

The cooperation of public and private sector organizations is a viable option for decision makers in the public sector for improving information technology (IT) infrastructures, acquiring innovation, and increasing management know-how. Effective partnering in public-private partnerships (PPP) is difficult though, because the involved stakeholder groups have divergent interests and organizational cultures. Using institutional logics as meta-theoretical lens, this exploratory, interpretive case study analyzes an IT PPP in Germany. The results reveal public- and private-side organizational culture differences and how the partners aligned their cultural differences by the development and legitimization of a partnership norm as well as the necessary partnership practices. The case analysis also illustrates how public sector and private sector organizations succeeded with the transition of public sector and private sector employees into a partnership organization and the management of different organizational cultures.     

Transforming a traditional research organization through public entrepreneurship

Public entrepreneurship is much like its private sector counterpart; however, public entrepreneurs face additional challenges due to weaker competitive forces in the public as compared to private sector, with objectives that often are poorly defined and performance that is difficult to measure. Despite the impact on public good, how to enact changes successfully in public sector organizations to be more entrepreneurial is poorly understood. This article summarizes current research on public entrepreneurship and presents a detailed case study of a successful entrepreneurial change in a public sector organization. A five-step change process used to enhance entrepreneurial behaviors was implemented in a public sector organization and the qualitative and quantitative results demonstrated substantial performance improvements over 4 years (i.e., quantitative performance in some areas was more than 10 times greater). We explain key steps that produced successful outcomes and how to avoid common challenges in the implementation of ongoing entrepreneurial behaviors in public sector contexts.     

The decision to advertise nonprofit accreditation status

Nonprofits seek accreditation to bolster their reputation and signal their worthiness to funders. The Better Business Bureau accredits nonprofits who pass 20 standards of accountability. Accredited organizations have the option to pay for the right to advertise their accredited status. At issue is why some organizations pay to advertise and other organizations do not. Utilizing a sample of 495 nonprofit organizations accredited by the Better Business Bureau, we find that nonprofits that pay to advertise the seal are larger, more profitable, have higher visibility, and are more likely to hire professional fundraisers. The results should be of interest to stakeholders and fundraisers interested in the adoption of methods to signal the accountability of nonprofit organizations.     

Influence of Personal Values and Value Congruence on Unethical Practices and Work Behavior

The study examines whether (a) personal and organizational values differ in private and public sectors, and (b) personal values and value congruence – the extent of matching between personal and organizational values – influence unethical practices and work behavior. Three hundred and forty middle-level managers from four manufacturing organizations rated 22 values as guiding principles to them to identify their personal values. In order to index organizational values, 56 top-level managers of the same organizations rated how important such values were to the organization. Results revealed that the important shared values among managers of private and public sectors are product quality and customer service. Congruence between personal and organizational values is found to be higher in the private sector compared to the public sector. Middle-level managers in the private sector shared the organizational values more than the managers in the public sector. Irrespective of the type of organizations and age of managers, personal values more potently and consistently decreased unethical practices and increased work behavior compared to value congruence. Hiring managers emphasizing personal values can demote unethical practices and promote work behavior.     

Marketing Orientation in the Third Sector: The Art of Afro Reggae

Although there is a plethora of literature on marketing orientation in the private sector, within the nonprofit arena, this topic has been largely ignored. This paper analyzes the orientation and experience of Afro Reggae, a successful Brazilian nongovernmental organization that maintains a permanent presence in four drug-dominated slums in Rio de Janeiro. The present research uses the case study method for purposes of collecting and analyzing information. The paper discusses the implications for research in the area of marketing orientation in the third sector as well as the lessons learned regarding the low-income population vis-à-vis their experience with Afro Reggae.     

A comparison of business ethics commitment in private and public sector organizations in Sweden

This paper reports the results of a study of the top 500 private sector organizations and the top 100 public sector organizations in Sweden. It is a replication of the study by Svensson et al. (2004) . The aim of the study was to describe and compare the business ethics commitment of organizations across the two sectors. The empirical findings indicate that the processes involved in business ethics commitment have begun to be recognized and acted upon at an organizational level in Sweden. Some support is provided to show that codes of ethics are developing in some of Sweden's largest private and public sector organizations – although this is happening to a lesser extent in the public sector. It is noted that an effect of a code of ethics on the bottom line of the business was acknowledged by respondents in both private and public sector organizations. We believe that the supporting measures of business ethics commitment appear to be underutilized in both private and public sector organizations in Sweden (among those that possess codes of ethics), thus indicating that the commitment to business ethics in Swedish organizations has potential for future development.     

Charity Retailing in the United Kingdom: A Managerial Capabilities Perspective

Nonprofit organizations are venturing into commercial activities due to the intense competition for the limited government funds and declining availability of donor funds for third‐sector organizations that address social problems. Charity retailing, a popular choice of commercial activity for nonprofit organization, has filled vacant premises in the high streets of the small towns and suburbs of large cities in the United Kingdom. Successful charity retail operation requires distinctive capabilities necessary to manage organizations' resources in commercial environment. Using 60 in‐depth elite interviews, we introduce the concept of managerial capabilities for charity retailing. Research propositions and management implications are discussed.     

Corporate Culture in the Nonprofit Sector: A Comparison of Fringe Benefits with the For-profit Sector

One explanation that may be given for why nonprofit organizations pay lower wages than do other organizations is that nonprofits are more pleasant places to work. Indeed, some authors have proposed that nonprofit organizations should make an effort to promote a working environment that reflects the beliefs of the organization. This paper uses several proxies for whether an organization is a pleasant place in which to work, and tests for whether nonprofits are more likely to offer such pleasant working conditions. Analysis shows that nonprofits are not more likely to offer these conditions in many instances.     

Princes and Paupers: Network Ties and Financial Contributions Among Nonprofit Arts Organizations

ABSTRACT

In the United States, nonprofit organizations are the primary vehicle through which wealthy patrons nurture arts and culture. They provide support for theatres, orchestras, operas, and ballet troupes of all sizes, as well as museums, galleries, zoos, and public radio and television stations. The survival of this subsector is dependent on the ability of individuals and foundations to raise and funnel money to the almost 7,000 nonprofit arts and cultural organizations in the United States. Nonprofit arts organizations have historically fared well during periods of financial constraint, in part because they have not depended heavily upon government subsidies. But another explanation for this stable funding picture may be the networks of overlapping board member and interpersonal ties of collegiality and friendship which characterizes the world of nonprofit arts organizations.

We began our research with the idea that network position, particularly as measured by network centrality, is an important resource for nonprofit arts organizations. We hypothesized that the more central an arts organization is in the entire network of for-profit and nonprofit arts organizations in the community, the greater will be the level of support it can generate from local donors. We also hypothesized that the more wealthy a nonprofit arts organization, the more central it is likely to be in the entire network of for-profit and nonprofit organizations.

Using an extensive database of almost 3,000 directors in the Louisville, Kentucky area, and special computer-based network analysis software packages, we were able to calculate the precise centralities of local arts organizations within a network of 149 organizations, corporations, and umbrella funding agencies. In order to determine the local financial support, we collected the 1990 IRS (Internal Revenue Service) Form 990 returns for nineteen of the twenty-five organizations (76%) we identified as active in the Louisville area. After determining organizational centrality, we did a bi-variate analysis between the centrality of an individual arts organization and total organizational wealth. What we found was that centrality is strongly associated with level of contributions and weakly associated with overall wealth. We believe that nonprofit arts organizations can take deliberate steps to maximize this resource by being aware of the other organizational (and social) ties of prospective directors.     

The impact of online financial disclosure and donations in nonprofits

Decreased public confidence and trust in the nonprofit sector has fueled increased calls for transparency. In response, federal regulators and watchdog organizations have recommended that nonprofits voluntarily disclose their financial information on their own public websites. Despite the potential benefits of enhanced public confidence and trust, improved donor decision making, and increased donations, many nonprofit organizations have not adopted the recommended disclosure practices. We investigate the disclosure practices of 3,217 nonprofits and find that voluntary web disclosure of the IRS Form 990 is strongly correlated to donations, independent of other variables such as age, size, and fundraising expenditures. Further, fundraising is also clearly related to the performance indicators shown in the 990 disclosures, particularly the program ratio of program expenditures to total expenditures. This is true on a general level and when specifically compared to other nonprofits within particular sectors. As a result, nonprofits should seriously consider voluntarily posting their Form 990 results on their websites when it reflects favorably and strive to improve their financial performance if online disclosure would reflect poorly on the organization.     

Training as a social purpose: are economic and social benefits delivered?

This paper reports original research which measures the social and economic impact of training and skills development on individuals who participated in training provided by social purpose, nonprofit organizations. An implicit policy assumption is that such organizations contribute to social and economic regeneration. Examining the costs and benefits of training to trainees, an adapted Return on Investment methodology measures any economic benefit, while an Index of Social Benefit measures changes in individual well‐being. The results demonstrate that while changes to both the economic and social well‐being of trainees occur, it does not necessarily relate solely to the training they received. Instead, changes reflect other, often complex, aspects of trainees’ lives, although training may facilitate change. Furthermore, social purpose, nonprofit organizations need to evince the socioeconomic benefits of their training programmes to secure future funding, public or private, but proving their successful delivery may be difficult to determine.     

Sustainability of nonprofit organizations: An empirical investigation

Nonprofit organizations (NPOs) contribute to society through their social value creation. They operate in an increasingly turbulent context where building sustainable organizations has emerged as a critical need. Past authors have discussed this important issue in a fragmented manner. Using multiple case studies of socially entrepreneurial NPOs, this paper examines how the need for building a sustainable organization has impacted on the strategy focus of the nonprofit organization. The findings suggest that in response to an increased competitive environment, NPOs have been forced to adopt an organizational sustainability focus in both strategic and operational levels of management. The study makes a strong contribution to current debate in social entrepreneurship and to a broader agenda concerned with developing sustainable organizations. Whilst the findings have important implications for theory and current practice, the paper concludes with suggestions for future research at the interstices of these areas.     

Defining the Content of Sustainability Reports in Nonprofit Organizations: Do Stakeholders Really Matter?

The aim of the article is to investigate the role of stakeholder engagement and participation in nonprofit organizations’ sustainability reporting, according to the literature on third sector and stakeholder theory. To verify the levels of involvement, the authors conducted an empirical survey, using content analysis, on a sample of 54 sustainability reports of nonprofit organizations included in the Global Reporting Initiative database as of September 1, 2012. In order to strengthen the results obtained from the content analysis, the authors shared their findings with the organizations of the sample. The survey showed that there were some criticisms regarding stakeholder participation in the targeted research field. These are considered in the conclusions. Questions for the future included whether stakeholder engagement is moving from being simply a way to consult and influence stakeholders to being an effective instrument for involving them in nonprofit organizations’ reporting and decision-making processes, through mutual commitment.     

Identity Brokerage and Nonprofit Community Building

Scholars have increasingly approached organizations as complex systems with indeterminate, shifting boundaries. Boundaries in many nonprofit organizations may be especially fluid, given the heterogeneity of stakeholders and highly multiplexed relational and value characteristics involved in constructing identity. The present study frames nonprofit organizations as complex organizations seeking to build communities of legitimacy. Within these communities they construct their identity through a combination of boundary setting, or perceptions of the organization and in what ways it is distinct from other organizations and communities, and relationship building, through both interpersonal contacts and socially mediated interaction. These dimensions combine to allow organizations to identify and bridge structural holes in the larger network in which they are embedded, through processes of identity brokerage. These mechanisms have significant implications for driving growth and engagement in nonprofit organizations. In support of this theoretical model, the article describes a mixed-methods research study involving a nascent arts organization in a large U.S. city.     

Expatriate management: An Australian tri‐sector comparative study

This article outlines research into the scope of the management practices of Australian private, public, and nongovernment sector organizations with respect to the selection, preparation, management, and repatriation of expatriates. The research also ascertains how important each of these aspects is considered to be in contributing to the success of expatriate assignments. Results indicate that the management practices of the nongovernment sector organizations are broader in scope than those of organizations in the other two sectors. Nongovernment sector organizations are more inclusive of families throughout the expatriate assignment. The importance of these four aspects in contributing to the success of an expatriate assignment is acknowledged by respondents in all sectors. © 2001 John Wiley & Sons, Inc.