DONORS, IDEOLOGUES, AND BUREAUCRATS: GOVERNMENT OBJECTIVES AND THE PERFORMANCE OF THE NONPROFIT SECTOR

Ideologically driven managers of non profits prefer to deal with donors whose ideologies match their own. Bureaucratic managers prefer to control large organizations. In this paper, we model the goverment's interest in nonprofit service provision and how it leads goverment toprefer larger firms then pure ideologues will choose, and smaller firms then pure bureaucrates choose. We explore the effect of population growth on the optimal than pure bureaucrates choose. We explore the effects of population growth on the optimal size of nonprofit organizations from the goverment's point of view, and review policy tools available to goverment to influence the attrictiveness of the nonprofit sector to managers with varying degrees of ideological and beureaucratic motivation.     

ACCOUNTABILITY AND THE PUBLIC INTEREST IN THE NONPROFIT SECTOR: A CONCEPTUAL FRAMEWORK

This paper clarifies the nature of nonprofit accountability by distinguishing between the substantive and processual understandings of the public interest. The major theories of the nonprofit sector are shown to imply that this sector's activities correspond to the public interest only in its processual understanding, but not in the substantive one. Policy and management implications of this argument are discussed.     

ON THE CAPITAL STRUCTURE OF NON‐PROFIT ORGANISATIONS: A REPLICATION AND EXTENSION WITH BELGIAN DATA

The empirical tests of non‐profit organisations' capital structure theories by Jegers and Verschueren (2006) on a sample of Californian non‐profit organisations (data on 1999) are replicated and extended for a more recent Belgian sample (844 observations pertaining to 2007). Three complementary theories to explain the presence and levels of overall debt and financial debt are examined: equity constraints, agency, and borrowing constraints. The decision to borrow and the amount to be borrowed are analysed separately. The estimations obtained reveal that both are driven by different mechanisms. After having removed outliers, the results show effective equity constraints when explaining debt levels, as observed in the Californian sample with respect to the overall amount of debt. The results also indicate an agency explanation of debt: both the decision to borrow from financial institutions, and the overall amount of (financial) debt are positively affected by the presence of a potential agency gap between board and management. In the Californian sample, the results on this were mixed. Borrowing constraints were almost never discovered, similar to the conclusions reached by Jegers and Verschueren. However, slightly reducing the sample by removing outliers makes borrowing constraints apparent. As to the control variables, size positively affects the probability of borrowing, but, for the organisations taking on debt, negatively affects the level of borrowing. As could be expected, the amount of tangible fixed assets in place is positively related to the amount of financial debt.     

DECENTRALIZATION, ACCOUNTING CONTROLS AND PERFORMANCE OF GOVERNMENT ORGANIZATIONS: A NEW ZEALAND EMPIRICAL STUDY

This paper reports the results of a study which was conducted in five departments of the New Zealand Government and investigated the relationships between (a) decentralization and the use of accounting control systems, (b) the use of accounting control systems and district office performance, and (c) the decentralization and district ofice performance. The performance was assessed using the managers' perception of their district office (unit's) performance. Data for the study were collected from 59 district office managers using a structured questionnaire. The results indicate that an increased decentralization is associated with a greater managerial use of accounting control systems which, in turn, is associated with improved district office performance.     

The role of rating agencies in the market for charitable contributions: An empirical test

Rating agencies play the role of information intermediaries in the market for donations. These watchdog organizations obtain and interpret accounting data and other information about charitable organizations and report ratings to help donors select among the many organizations soliciting contributions. In the age of the internet, information from Internal Revenue Service Form 990 returns prepared by tax-exempt organizations is more readily accessible than ever before. This study examines whether the zero- to four-star ratings provided by Charity Navigator have additional information content for donors. Charity Navigator was selected because its rating system relies almost exclusively on the 990 returns and presumably adds value by incorporating peer-group expectations for various ratios and by presenting straightforward and concise data. Using a random sample of 405 charities rated by Charity Navigator, our results suggest that rating changes do impact contributions. Positive rating changes were associated with an increase in contributions and organizations with a decline in rating were associated with decreased contributions. These effects were in addition to what would be predicted using an efficiency ratio commonly computed from Form 990 accounting data and other control variables.     

Future scenarios for the charity sector in 2045

Rapid change is affecting the demography, technology and availability of resources (both financial and volunteer) on which charities draw. This paper presents four different scenarios that could describe the charity sector one generation from now as it responds to a different world. We highlight the dangers if any one scenario becomes dominant. While it is inevitable that change will occur, these drawbacks should be minimized and it is important that public funders and policy makers steer intelligently through this changing world. Also, charity leaders must prepare and plan for inevitable change in the sector.     

构建高校大学生党员教育新模式探索

为进一步提升高校党建实效,高校大学生党员教育工作亟待创新型机制,笔者以高校志愿工作为突破口,通过分析志愿工作之现状,探索其和学生党员教育工作的联动机制,旨在为当前学生党员教育工作注入新的生机和活力。     

Managing employees in aged care: live the principles

Aged care services are a large recipient of public money in many developed countries and are primarily provided by nonprofit organizations in Australia. This paper reports on an investigation into the impacts of the psychological contract for nurses in nonprofit aged care. The results highlight the importance of nonprofit organizations fulfilling their obligations and living their principles. Aged care nurses who perceive breaches to their psychological contract are likely to de-identify from the organization.     

INSURER EXPOSURE TO EXTRACONTRACTUAL LIABILITY UNDER STATE UNFAIR CLAIMS SETTLEMENT PRACTICES ACTS: AN EMPIRICAL TEST

Abstract: Litigation against insurers for bad faith actions has increased. The authors examine how the exposure of insurers has changed with particular emphasis on the impact of Unfair Claims Settlement Practices Acts.     

The Role of Founder and Other Family Participation on US Private Foundation Efficiency

Founders make significant financial contributions in creating US private foundations. Therefore, we hypothesize that founders monitor foundation operations and predict a positive relation between founder participation and foundation efficiency. In contrast, we propose competing hypotheses in examining the relation between other family member participation and foundation efficiency. Other family member participation has the potential to enhance foundation efficiency if founders are able to transfer their philanthropic values to their progeny. However, other family participation also has the potential to diminish foundation efficiency if the founders’ withdrawal leaves their foundations without true principals to monitor managerial actions. We find that both founder and other family participation are positively associated with foundation efficiency. We also provide limited evidence that the positive association between founding family participation and foundation efficiency is transferred to second generation family members, but is not transferred to subsequent generations.     

Tracking Resource Use in a Welfare Organization: Needs, Costs and Co-production

Public sector welfare organizations are situated at the sharp end of resource allocations in society and must cope in an environment where demand frequently far exceeds supply. In consequence, the resource problem of meeting the need for social welfare is never fully resolvable and evaluations of the ways in which scarce resources are used within the public sector are of critical importance for public policy. This paper draws on an empirical study of a welfare service for homeless young people in order to illustrate, first, the cost implications of two different approaches to service delivery (one more superficial – termed 'people-processing'; one more in depth – termed, 'people-changing') and, second, how the characteristics of the clients served (in particular, their ability to fully engage with the service termed –'co-production') can have a marked impact on the cost of the services delivered to them.     

Management accounting texts in New Zealand: the need for a paradigm shift

This paper questions the dominance in textbooks of a management accounting grounded largely in neo-classical economics and scientific management. In New Zealand the most popular textbook used in introductory management accounting courses is Horngren and Foster's Cost Accounting - a Managerial Emphasis.The current seventh edition of the text, although extensively used, is not regarded as adequate for the purpose by many New Zealand educators. The text is seen as being rootd firmly in the traditional understandings of the role of management accounting which are subject to increasing challenge. Other popular texts which are influencing the content of management accounting courses also are reviewed. We conclude that, despite much criticism over many years, modern textbooks have failed to evolve; change is overdue.     

NONPROFIT EMPLOYEES' MACHIAVELLIAN PROPENSITIES

Nonprofit organizations are held to high ethical standards due to their charitable missions serving the common good. Incidents of fiscal mismanagement within the nonprofit sector make it relevant to assay the ethical principles of employees. This study examines the level of Machiavellian propensities of US nonprofit employees. Results indicate Machiavellian propensities do exist in certain nonprofit employees and these employees agree with questionable behavior. Policy makers and oversight agencies may find these results useful in developing corporate governance and accountability measures for nonprofit organizations. Furthermore, board of director members may use these results to monitor employee actions and address management training.     

Boards,Executive Excess Compensation,and Shared Power: Evidence from Nonprofit Firms

We investigate how executives, the board, and excess compensation jointly affect the performance of nonprofits. Since the common measure of nonprofit performance often includes salaries, we also use expenses that directly benefit the targeted population. Our results suggest that above average compensation for executives is associated with poor firm performance. However, the negative relation of CEO pay to performance occurs for firms with only one executive, the CEO. We conclude that a powerful CEO with autonomy can harm firm performance, but other executives can mitigate these agency problems. The board also appears to monitor direct community benefits more than indirect benefits.     

Paradigms lost?: Reflections on the coming organizational ‘revolution’

The question of optimal organizational change for the future is attracting growing interest. The authors examine the literature to date and find that its basic tenets are too simplistic and over-optimistic to provide a methodological base for evaluation of change in the future.     

When Paradigms Meet: Interacting Perspectives on Evaluation in the Non‐Profit Sector

This study examines a public debate in Australia, arising from a national government report, around how social contribution in the nonprofit sector should be assessed. Guided by several meta‐perspectives on evaluation, we identify connections between foundational assumptions and normative positions on evaluation espoused by non‐profit organizations (NPOs), and examine the ways in which the inter‐paradigmatic context of the non‐profit sector contributes to the emergence of NPOs’ different normative positions on evaluation. We conclude that particular paradigmatic orientations of NPOs (positivism, interpretivism, constructivism) lead to particular perspectives on how NPOs should engage with alternative paradigms (monism, impartial pluralism, radical pluralism).     

CEO compensation and performance in US private foundations

In a large sample of US private foundations, we examine the association between CEO compensation and an accounting‐based measure of performance, administrative efficiency. We document a positive pay–performance association across time within foundations, but a negative association across foundations. We interpret our evidence as follows: some foundation boards reward CEOs for high administrative efficiency, which results in a positive pay–performance association. However, some foundations are poorly monitored relative than others, resulting in higher CEO compensation and lower efficiency.     

Do ‘Good Governance’ Codes Enhance Financial Accountability? Evidence from Managerial Pay in Dutch Charities

This paper examines the initial impact of a ‘good governance’ code for charitable organisations that was promulgated in the Netherlands in 2005. Data are gathered from publicly available annual reports of 138 charities in the post‐implementation phase of the code (2005–2008). We first examine whether the code altered charities’ governance structures. Next, we investigate managerial pay as a key aspect of discharging financial accountability because prior literature focused on ‘excessive’ compensation. The findings indicate that a strengthened governance structure positively affects the likelihood of disclosing information concerning managerial pay, as well as mitigating managerial pay level.     

Non‐profit vulnerability: An exploratory study

This mixed‐method study explores the symptoms and potential causes of non‐profit vulnerability within the Australian context. Following two focus groups with CEOs and Chairs of non‐profit organizations, an online survey was developed, pilot tested and distributed to non‐profit CEOs. Our findings suggest three symptoms that might be particularly useful in identifying non‐profit vulnerability: a substantial increase in unit costs/delivery hours; a substantial increase in the proportion of administration to program expenses; and a reduced ability to pursue the organization's mission. The results also suggest various potential causes of non‐profit vulnerability; in particular, Board inadequacies; External environmental threats; Project management issues; and Funding constraints.