Detailed Contents Acknowledgments xvii Preface xix PART I. Understanding Nonprofit Management, the Nonprofit Sector, and Nonprofit Organizations 1 1 Nonprofit Management as a Profession and a Field of Study 3 A Revolution in Management 4 A Distinct Profession 5 Nonprofit Management as a Field of Study 8 Toward a Balanced Approach 11 Proceeding With Realism and Pride 13 Chapter Summary 14 Key Terms and Concepts 15 Questions for Discussion 15 Suggestions for Further Reading 15 Books/Journals 15 Websites 15 2 Overview of the Nonprofit Sector 17 America s Nonprofit Sector: A Historical Overview 19 Searching for a Common Vocabulary 21 Alternatives to Nonprofit 22 Size of the U.S. Nonprofit Sector 24 Differentiating the Nonprofit Sector 25 National Taxonomy of Exempt Entities 25 IRS Classifications 26 Social Welfare Organizations 27 Charitable Nonprofits 29 Charitable Subsectors 30 Public Charities and Private Foundations 33 Salamon s Anatomy 34 The Spectrum of Organizations 35 Emerging New Models 38 Commercialization and Tax Exemption 39
Implications for Nonprofit Managers 40 Chapter Summary 41 Notes 42 Key Terms and Concepts 42 Questions for Discussion 42 Suggestions for Further Reading 43 Books 43 Websites 43 3 Theories of the Nonprofit Sector and Nonprofit Organizations 45 Explaining the Nonprofit Sector 45 Nonprofit Theory Across the Disciplines 45 The Failure Theories 47 Market and Government Failure 48 Nonprofits as Gap Fillers 49 Supply-Side Theories 50 Theories of Altruism and Giving 51 Theory of the Commons: An Interdisciplinary Approach 52 Changing Definitions of Private, Public, and Common 53 Explaining Nonprofit Organizations 55 Characteristics of Nonprofit Organizations 55 Nonprofits as Open Systems 58 Resource Dependency 60 Isomorphism 62 Explaining Nonprofit Organizational Structures 63 Organizational Culture 64 Chapter Summary 66 Note 67 Key Terms and Concepts 67 Case 3.1. The Smithsonian Institution and the Catherine B. Reynolds Foundation 67 Case 3.2. The National Trust for Historic Preservation 69 Questions for Discussion 70 Suggestions for Further Reading 71 Books/Articles 71 PART II. Governing and Leading Nonprofit Organizations 73 4 Nonprofit Governing Boards 75 Types of Governing Boards 76 Elected Boards 76
Self-Perpetuating Boards 77 Appointed and Hybrid Boards 78 The Board s Responsibilities 79 The Board s Legal Responsibilities 80 The Board s Functional Responsibilities 83 The Board and the CEO 87 Carver s Policy Governance Model 89 Chait, Ryan, and Taylor: Governance as Leadership 90 Herman and Heimovics: Psychological Centrality and Board-Centered Leadership 92 Nonprofit Board Effectiveness 93 Critics of Board Performance 93 The Search for Best Practices 94 The Challenge of Nonprofit Governance 96 Chapter Summary 98 Notes 99 Key Terms and Concepts 99 Case 4.1. The American University 100 Case 4.2. Robin Hood Foundation 100 Case 4.3. The Hershey Trust 101 Questions for Discussion 102 Suggestions for Further Reading 103 Books 103 Websites 103 5 Executive Leadership 105 The CEO s Job 105 Management and Leadership 107 Overview of Leadership Theories 108 Transformational Leadership 111 Charismatic Leadership 112 The Effective Nonprofit CEO 114 Focus on Mission 115 Focus on the Board 116 Focus on External Relationships 116 Share Leadership and Empower Others 116 Focus on Key Roles and Priorities 116 Use the Political Frame 117 Right Person, Right Place, Right Time 118 Founder Syndrome 119 Executive Transitions 121 Leading Change 122 Chapter Summary 124 Notes 125 Key Terms and Concepts 125
Case 5.1. A Change in Leadership at Habitat for Humanity 126 Case 5.2. Crisis and Change at N Street Village 127 Questions for Discussion 128 Suggestions for Further Reading 128 Books 128 Websites 129 PART III. Managing the Nonprofit Organization 131 6 Ensuring Accountability and Measuring Performance 133 Defining and Ensuring Accountability 133 Mechanisms for Accountability 134 Requirements of Law 134 Self-Regulation: Standards and Accreditation 136 Charity Watchdogs 140 Measuring Performance 141 Financial Ratios as Measures of Performance 142 Measuring Against Peers 145 Measuring Against Mission (Outcomes) 146 Common Indicators 150 Balanced Scorecard 150 Social Return on Investment 153 Blended Value 154 Performance Measurement: The Continuing Debate 155 Chapter Summary 157 Key Terms and Concepts 158 Case 6.1. The Nature Conservancy 159 Case 6.2. Youth Villages 161 Questions for Discussion 163 Suggestions for Further Reading 163 Books 163 Websites 164 7 Strategic Planning and Strategic Management 167 Understanding Strategy 167 Strategic Planning and Strategic Management 168 The Strategic Planning Process 169 Planning to Plan 170 Defining Mission, Values, and Vision 172 Assessing the Situation 175 Identifying Strategic Issues 176
Setting Goals 177 Strategies 179 Objectives 179 Writing the Strategic Plan 180 Developing an Operational Plan 180 Identifying Strategic Issues and Developing Strategies 181 Portfolio Analysis 181 MacMillan s Strategies Matrix 183 The Strategic Planning Debate 184 Chapter Summary 187 Key Terms and Concepts 187 Case 7.1. New Hope Housing Strategic Plan 2007 2012 188 Questions for Discussion 190 Suggestions for Further Reading 190 Books 190 8 Capacity and Collaboration 193 The Capacity-Building Movement 193 Defining and Understanding Capacity 194 Capacity Building in Action 196 A Model for Capacity Building 197 Capacity and Organizational Life Cycles 199 Capacity Building Evaluated 202 Nonprofit Collaborations and Mergers 202 A Continuum of Relationships 203 Drivers of Collaborations and Mergers 204 Exploring Collaborations and Mergers 206 Obstacles to Collaboration 207 Motivations 208 Culture 208 Egos 209 Costs 209 Conditions for Success 209 Driven by Mission 210 Commitment From Top Leadership 210 Trust 210 Relatedness 210 Process 211 Collaborations and Mergers Within National Nonprofits 212 Chapter Summary 213 Key Terms and Concepts 214 Case 8.1. Change at the Girl Scouts of America 215 Questions for Discussion 216 Suggestions for Further Reading 217 Books 217 Websites 217
9 Managing Paid Staff and Service Volunteers 219 An Overview of Management Theories 219 Understanding Human Motivations 220 Applying Theories to the Nonprofit Workforce 224 Managing Volunteers 226 Motivations of Volunteers 228 Volunteer Management Practices 228 Volunteer Management as a Career Field 235 Chapter Summary 236 Key Terms and Concepts 237 Case 9.1. Getta Grant 238 Case 9.2. Rita Writer 238 Case 9.3. Bob the Builder 239 Questions for Discussion 239 Suggestions for Further Reading 240 Books/Reports/Articles 240 Websites 240 10 Marketing and Communications 243 Defining and Understanding Marketing 243 Marketing Serves the Mission 245 Marketing Means Action 246 Marketing as a Process 247 The Marketing Mix 247 Product 249 Place 249 Promotion 250 Price 251 Building the Brand 254 Integrated Marketing Communication (IMC) 255 Evaluating Marketing and Communication 258 Chapter Summary 259 Note 260 Key Terms and Concepts 260 Case 10.1. AARP 260 Case 10.2. Randolph College 261 Questions for Discussion 262 Suggestions for Further Reading 263 Books/Journals 263 Websites 264
PART IV. Obtaining and Managing Resources 265 11 Philanthropic Fund-Raising 267 Definitions and Distinctions 268 Motivations for Giving 270 Understanding Corporate Philanthropy 270 Foundation Giving 271 Motivations of Individual Donors 272 The Fund-Raising Process 274 Identifying Priorities and Developing the Case 274 Identifying and Qualifying Prospects 276 Cultivating Prospects 277 Soliciting the Gift 278 Acknowledging and Recognizing Donors 280 Stewarding the Gift and the Relationship 280 Individual Donor Life Cycles 281 Planned Giving 283 Campaigns 283 Managing Fund-Raising Programs 285 Advancement Services 286 Prospect Management 287 Fund-Raising Efficiency and Effectiveness 287 Staff Performance and Accountability 288 Ethics and Professional Standards 289 Chapter Summary 293 Note 295 Key Terms and Concepts 295 Fund-Raising Ethical Cases 296 Case 11.1a g 296 Questions for Discussion 297 Suggestions for Further Reading 297 Books 297 Websites 297 12 Earned Income Strategies 299 Why Earned Income? 300 Partnerships With Business 301 Licensing 302 Sponsorships 303 Cause Marketing 304 Operational Relationships 305
Putting Partnerships Together 307 Nonprofit Business Ventures 308 Identifying Business Opportunities 309 Feasibility Analysis and Business Planning 309 Earned Income Strategies: Issues and Decisions 312 Sorting Out the Issues 312 Evaluating Opportunities Against Mission 314 Risks to Society? 315 Chapter Summary 316 Note 318 Key Terms and Concepts 318 Case 12.1. Minnesota Public Radio 318 Questions for Discussion 320 Suggestions for Further Reading 321 Books 321 Websites 321 13 Financial Management 323 Definitions of Key Concepts 323 Overview of Nonprofit and Personal Finances 325 Nonprofit Financial Statements 328 Statement of Financial Position 329 Statement of Activities 334 Statement of Cash Flows 334 Statement of Functional Expenses 335 Using Financial Ratios 336 Managing Endowment Funds 338 Developing and Managing the Budget 340 Financial Policies and Controls 342 Chapter Summary 343 Notes 345 Key Terms and Concepts 345 Questions for Discussion 345 Suggestions for Further Reading 346 Books 346 Websites 347 PART V. Special Topics 349 14 Advocacy and Lobbying 351 Basic Distinctions 353 Overview of Lobbying Law 354
Option I: Substantial Part Test 355 Option II: 501(h) Expenditure Test 355 Political Campaign Activity 358 Implementing an Advocacy Program 358 The Future of Nonprofit Advocacy 360 Chapter Summary 361 Note 363 Key Terms and Concepts 363 Case 14.1. Mothers Against Drunk Driving (MADD) 363 Questions for Discussion 364 Suggestions for Further Reading 365 Books 365 Websites 366 15 Governing and Managing International and Global Organizations 369 Definitions and Scope of International Organizations 370 International Philanthropy and Fund-Raising 372 Global Fund-Raising 373 International Nonprofit Governance and Management 375 Managing Across Cultures 375 Governing International and Global Organizations 375 Structuring International NGOs 377 Chapter Summary 379 Key Terms and Concepts 380 Case 15.1. Médecins Sans Frontières/Doctors Without Borders 380 Questions for Discussion 381 Suggestions for Further Reading 382 Books/Articles 382 Websites 382 16 Social Entrepreneurship 385 Defining and Understanding Social Entrepreneurship 385 Theories of Social Entrepreneurship 387 High-Impact Nonprofits 390 Social Entrepreneurship Around the World 392 Bill Drayton and Ashoka 393 Muhammad Yunus: Grameen Bank and Social Businesses 394 The Future of Social Entrepreneurship 395 Chapter Summary 396
Notes 397 Key Terms and Concepts 397 Case 16.1. KaBOOM! 397 Questions for Discussion 398 Suggestions for Further Reading 399 Books 399 Websites 399 Conclusion 401 References 405 Index 421 About the Author 431