Managing in the Nonprofit Sector

Books reviewed in this article:
Paul C. Light, Making Nonprofits Work
Steven J. Ott (ed.), Understanding Nonprofit Organizations
William B. Werther, Jr. and Evan M. Berman, Third Sector Management     

Measuring the Growth of the Nonprofit Sector: A Longitudinal Analysis

Scholars 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.     

Dynamics of Sector Switching: Hazard Models Predicting Changes from Private Sector Jobs to Public and Nonprofit Sector Jobs

Policy makers and public managers emphasize the importance of bringing private sector experience and skills into the public and nonprofit sectors. One result is an increased focus on privatization and contracting out, developments to which researchers have been attentive. However, the long-standing practice of hiring people with industrial experience into the public and nonprofit sectors has received remarkably little attention. This study, based on questionnaire responses from mid- and upper-level personnel in public and nonprofit sector organizations, attempts to understand the dynamics of sector switching from the private into either the public or nonprofit sector. Using event history analysis, the article looks at switching patterns. The probability of switching into the public sector is much higher for those who held a managerial occupation in their previous private sector job than for those who held professional and technical positions. Having more subordinates in a previous private sector job is associated with a lower likelihood of switching into a public sector job. By contrast, switching into the nonprofit sector is more often associated with a promotion.     

The Marketization of the Nonprofit Sector: Civil Society at Risk?

The public sector has increasingly adopted the methods and values of the market to guide policy creation and management. Several public administration scholars in the United States have pointed out the problems with this, especially in relation to the impact on democracy and citizenship. Similarly, nonprofit organizations are adopting the approaches and values of the private market, which may harm democracy and citizenship because of its impact on nonprofit organizations' ability to create and maintain a strong civil society. This article reviews the major marketization trends occurring within the nonprofit sector—commercial revenue generation, contract competition, the influence of new and emerging donors, and social entrepreneurship—and surveys research on their potential impact on nonprofit organizations' contributions to civil society. The article ends with a discussion of the significance of marketization in the nonprofit sector for public administration scholars and public managers.     

Internal Controls in State, Local, and Nonprofit Agencies

This study analyzes 127 cases of losses of internal accounting controls in state, local, and nonprofit agencies in North Carolina. The reasons for losses in control are identified and discussed along with ways of preventing such incidents.     

Shared Services: Lessons from the Public and Private Sectors for the Nonprofit Sector

Shared services arrangements in the Australian third sector are becoming more common. Notably, however, there is a lack of information to guide nonprofit organisations through the development and engagement of shared structures. This article reviews the lessons that have been recorded from the public and private sectors with respect to the engagement of shared services arrangements. Additionally this article explores the different types of shared services structures that can be adopted. Overall, this article highlights the need for further research and analysis of issues relating to shared services arrangements in order to assist the increasing number of Australian nonprofit organisations engaging these collective arrangements and structures.     

Reassessing the Impact of Civil Society: Nonprofit Sector,Press Freedom,and Corruption

The notion that a strong civil society helps to fight corruption has become a cornerstone of governance policy. Yet, a continuing dearth of empirical research, which tests this general proposition and probes the relevant causal mechanisms, feeds rising skepticism of current policy initiatives. This study theorizes the relationship between civil society and corruption, arguing that civil society's impact depends to a large extent on its ability to generate sufficient public pressure which, in turn, depends on the press being free. Analysis of cross‐national and longitudinal data shows that civil society strength is indeed inversely linked to the level of corruption, but the impact is highly dependent on press freedom. This conditioning effect affirms the importance of the public pressure mechanism. These results explain the need for policy to target both civil society and press freedom in promoting accountable governance and sustainable development.     

Prudent Public Sector Investing and Modern Portfolio Theory: An Examination of Public Sector Defined Benefit Pension Plans

This research examines the extent to which public pension programs allocate assets in a manner that is consistent with an optimal portfolio, as defined by Modern Portfolio Theory (MPT). The examination is pursued by way of a statistical analysis, using a portfolio optimization model and data on some of the nation's largest public DB plans. The analysis illustrates that the majority of the plans in the sample are incurring far more risk in their portfolios than is optimal given their target rates of return and that this risk level is a result of nonprudent allocation across asset classes. The findings suggest that there might be opportunities to improve the long‐term performance of defined benefit plans by adjusting asset allocation targets and legal lists in a manner that is more consistent with MPT.     

What's in a Sector? The Shifting Career Plans of Public Policy Students

Recent decades have seen a trend in which public policy graduates shun government and enter private-sector employment. In part, the shift reflects changing sectoral opportunities, but its magnitude and consistency are puzzling—even troubling—in light of the need for public-sector talent. Data from a two-year series of surveys and interviews with policy students reveal that many begin their training with uncertain career goals and ambivalence about public-sector work. Interest in government declines from entry to graduation, and it appears that the policy curriculum—heavy on analytic methods and conveying cautions about policy making—does little to promote a public-sector orientation. Those planning to enter government are strongly motivated by a desire to have an impact, whereas those drawn to the private sector seek financial resources and professional development. Many anticipate fluid careers and choose positions expected to offer growth, a feature more commonly associated with private than public jobs.     

Review Article: Scandinavian Parties in the Internal and External Arena

Party research lived a relatively quiet life during the 1970s and 1980s in the western world, and to some degree also in Scandinavia, although the central role of parties in the Scandinavian democracies made it impossible for political scientists to completely ignore political parties in their research. However, from the end of 1980s, political party research has been revitalized, and the number of publications has increased substantially. The three books reviewed here are part of the upswing during 1997, which, of course, includes other books and publications from that particular year. Why this renewed interest in studying political parties? For a long period after World War II, Scandinavian political parties were characterized as stable mass organizations. In 1973, the established Danish political system suffered an electoral backlash, and the shock waves gave fuel to speculations of party decline in electoral behavior studies. At the same time, similar trends were visible in Finland and Norway. Much later, interest focused on finding the same signs of decline in the internal party arena. The discussion is still alive, and during this process students of political science have gained new knowledge about parties and their organizations in Scandinavia.     

The Formal Delegation of Regulatory Decisions in the Telecommunication Sector: An Explanation Using Classification Trees

Research on regulation has traditionally focused on studying the delegation of regulatory competencies from political principals to an independent regulatory agency. In this article, we argue that this delegation is nuanced by different factors that affect whether a specific regulatory decision is formally delegated. We examine and explain formal delegation patterns at the level of individual regulatory decisions in twelve countries located in Europe, Latin America, and South Asia. The data were gathered by coding the twelve countries' telecommunications legislation. The data analysis was undertaken using a classification tree model—a nonparametric model. We found that the maturity of the market has the greatest effect on the formal delegation of regulatory decisions, but this effect is also influenced by the other theoretical factors considered, particularly the level of political constraints and the type of regulation.     

Assessing Organizational Performance: Exploring Differences Between Internal and External Measures

ABSTRACT

Differences in judgments of public service performance across stakeholder groups have often been noted, but have rarely been tested. We measure the extent of these differences between and within internal and external stakeholders. The evidence shows that internal groups usually overestimate the performance of their organizations. We then develop and test a model of inter-organizational variations in the extent of this overestimation. The statistical results show that performance overestimation is more likely in small organizations with geographically dispersed clients, and in organizations that adopt fashionable management practices that are associated with higher institutional legitimacy.     

A Comparison of the Values and Commitment of Private Sector, Public Sector, and Parapublic Sector Employees

This study investigated differences in general values, work values and organizational commitment among 549 private sector, public sector, and parapublic sector knowledge workers. No differences in general values were observed across sectors, although five significant work value differences were revealed: parapublic employees value work that contributes to society more than public servants, who value it more than private sector employees; parapublic employees value opportunities for advancement less than both public and private sector employees; public servants value intellectually stimulating and challenging work more than parapublic employees; and private sector employees value prestigious work more than public servants. Private sector employees displayed greater organizational commitment than the employees in the other two sectors. Overall, the findings suggest only limited value differences among employees of the various sectors. The finding of some work value differences between employees in the public and parapublic sectors suggests that these two groups merit separate consideration in comparative studies such as this one.     

External and Domestic Determinants of Education Expansion: How Germany, Japan, and Switzerland Have Varied

How do economically successful countries like Germany, Japan and Switzerland differ in their post-primary education policies? After identifying great variations in the structure and capacity of secondary and higher education sectors, explanations are sought in terms of domestic and inter-national factors. Switzerland and Japan emerge as polar cases in how political variables - such as centralism-federalism, parties and bureaucracies - affected choice of vehicles and extent of educational expansion. Party influence is most clearcut in Germany, but varies by sector. Whereas German and Japanese reform agendas changed in the aftermath of occupation experiences, Switzerland went its own way until prospects for European integration induced greater accommodation to the training and credential practices of its neighbors.