Organizations
operating in the nonprofit sector face the most complicated set of factors
influencing change. Solutions to overcoming the challenges associated with
enacting effective, positive changes must incorporate the unique elements of
the nonprofit sector and some of the weaknesses therein, such as the challenges
associated with nonprofit leadership, a restrictive economic model based on
donations, and the difficulties associated with monitoring an organization’s
progress towards accomplishing an altruistic ‘mission’.
Leadership in the nonprofit sector,
which typically involves an executive officer and a board of directors, can be
difficult to execute efficiently and effectively. Who is truly in charge, the
executive or the board chair? Nonprofit boards are composed of key community
members who are not being financially compensated for their service, and
executives are hired and overseen by this group of volunteers. The Jossey-Bass
handbook notes that “boards retain their legal and hierarchical superiority
(and sometimes must exercise it), whereas executives typically have greater
information, more expertise, and a greater stake in and identification with the
organization. Thus both parties are dependent on the other, but they are not
exactly equals” (Renz et. al, p. 160). The uncertainty can lead to a reluctance
to step up and provide leadership for the organization, which impedes a
nonprofits’ ability to change and adapt.
Nonprofits are less flexible due to
the restrictive economic model under which they must operate: they must take
steps to raise money in order to hire staff, provide services and continuing
progress towards the mission. This requires that nonprofits convince
stakeholders -and in particular donors - that they are using funds effectively
and efficiently. Howe notes that organizations which solicit donations have to
be fully accountable - “solicitations must be conducted on the basis of clear
description of programs and without undue pressure (and) fundraising expenses
must be reasonable and available to the public on request” (Howe, p. 4). If a
nonprofit wants to change its mission or focus, it must convince a wide group
of stakeholders that the change is worthwhile, and may lose donors who were
attached to changed or discarded programs.
Nonprofits can surely confront and
overcome these challenges with solutions tailored to the sector. To address the
leadership question, nonprofits should 1) enhance board performance assessment
and 2) encourage executives to provide leadership to boards. Herman and
Heimovies, who conducted a study on effective executive behaviors, found that “effective
executives provided significantly more leadership to their boards” (Renz et.
al, p. 162). Boards will become more invested in the organization as they
engage in systematic self-assessments, which reveal areas where changes may
improve the organization’s quality or performance. Executives can help drive
this process, and can better direct organizational changes, only if they are
willing to provide the necessary leadership to both staff and board alike. Nonprofits
should also (3) seriously consider board composition, and (4) restrict board
member terms to ensure new ideas and a constant stream of new opportunities.
Nonprofits should take advantage of opportunities to recruit new board members
with diverse skills and perspectives, which can help drive change. New board
members coming into the fold might offer new opportunities or ideas for
fundraising, and will not be tied down to past processes and systems. Nonprofits
might also (5) look to partnerships with the governmental or private sectors to
deal with the problems associated with their economic model. If a nonprofit
partners with a profitable private enterprise operating in a similar issue
area, financial security might allow for some flexibility in program adjustment
or organizational direction. In sum, if nonprofits make deliberate, strategic
decisions about governance and remain open to new partnerships, opportunities
and ideas, they can overcome the inherent challenges and achieve that crucial
aspect of organizational evolution and refinement: effective change.
Renz, David O. The
Jossey-Bass Handbook of Nonprofit Leadership and Management. San
Francisco: Jossey Bass, 2010.
Howe, Fisher. The Board Member’s First Duty:
Accountability. Nonprofit World, Vol.
18, No. 6.
December 2000.
