Do Donors Penalize Nonprofit Organizations with Accumulated Wealth?

Does current accumulated wealth by nonprofit organizations influence contributions from individuals? Existing research demonstrates that financial reserves aid program continuity during economic downturns. Yet donors, charity watchdogs, and policy makers voice concern about accumulated wealth in nonprofits. This empirical analysis examines whether the expected negative relationship occurs when donors perceive accumulated wealth as excessive. The results support the conclusion that future contributions are negatively affected when wealth levels are deemed excessive. Nonprofit managers concerned that accumulated wealth will diminish donations should consider financial strategies that will allow their organizations to build modest—but not excessive—reserves.     

Organizational form and performance: An empirical investigation of nonprofit and for‐profit job‐training service providers

While research on the distinctions between for‐profit and nonprofit organizations and their changing service sector shares is vast, there is comparatively little empirical evidence on the consequences of their differing attributes for social program outcomes. This article presents research on publicly subsidized for‐profit and nonprofit job‐training service providers, namely whether organizational form influences client enrollment, service delivery activities, or performance, as measured in terms of participant outcomes. The findings show that nonprofit providers were not more likely to serve more disadvantaged clients and that neither for‐profit nor nonprofit service providers were consistently more effective in increasing participants' earn‐ings and employment rates. When performance incentives were included in service providers' contracts, contractors of all forms performed significantly better across all participant outcomes examined. © 2000 by the Association for Public Policy and Management.     

Social equity and LGBTQ populations in African public administration: A macro- and micro-approach

How do public administrators understand social equity toward lesbian, gay, and bisexual (LGB) individuals and communities? To better understand social equity, this study uses data on the views of public and nonprofit administrators in 33 countries in Africa on LGB people. Based on these responses, we gain a better understanding of homophobia in public administrators. Furthermore, this data helps public administrators to explore how social equity might look differently to public and nonprofit administrators in different countries. Building on this foundation, this study proposes understanding social equity from both a Micro (individual) and a Macro (cultural)-perspective. Bringing in this micro- and macro-perspective can help public administrators and researchers to discuss how individuals and organizations identify “vulnerable” populations and appropriate ways to support vulnerable groups.     

The "Best Place" Debate: A Comparison of Graduate Education Programs for Nonprofit Managers

This article presents a critical examination of the curricular elements of nonprofit management degree programs in colleges of business, public administration, and social work. What are the major curricular elements in each type of program? How do the curricular elements of these programs compare with generic management degree programs? What are the central challenges facing managers of nonprofit organizations, and how are these challenges addressed in each program? Based on the curricular review, is one setting more favorable for students of nonprofit management? What are the views of stakeholders regarding the “best place” to educate managers? Data collected from focus groups and surveys of stakeholders in each of these academic settings are presented. The paper concludes with a discussion of the implications of these findings for the future of nonprofit management education in the United States.     

What can we actually get from program evaluation?

This paper assesses the role program evaluation can play in assisting decisions on public programs. The author looks at evaluation from the standpoint of decisionmakers interested in finding out the right answers about their programs. The discussion focuses on the assistance that various types of evaluation can give to program managers and to policymakers concerned with legislative changes and budget levels. The paper includes recent examples of relevant evaluation work. The concluding section analyzes some of the problems decisionmakers face in trying to get reliable, useful evaluation.     

Donors’ Responses to Profit Incentives in the Social Sector: The Entrepreneurial Orientation Reward and the Profit Penalty

This study uses an online survey experiment to test whether the pairing of profit-seeking with mission-related programs in the social sector attracts or deters donations from individual donors. We test individuals’ response to three types of profit incentives allowed under current U.S. public policy: (1) non-distributed profit to an organization, which is allowed for nonprofit entities; (2) profit to the organization's equity investors and owners, which is allowed under for-profit social enterprise governance charters; and (3) profit to lending investors, which is introduced by social impact bonds, a pay-for-success policy tool. We test trust theory, under which profit incentives deter donors against entrepreneurial orientation (EO) theory, which suggests that donors are attracted to organizations that use innovative, market-driven programs. Findings indicate support for both theories, but the support depends on how the specific profit incentive is structured. Donors support organizations that use profit-generating social enterprise programs—but only when the profits are non-distributable; donors’ support is significantly lower for social enterprises in which owners and equity investors may profit. Importantly however, this negative effect is not found for pay-for-success policy tools where lending investors, rather than equity investors and owners, receive profits.     

Challenges confronting nonprofit housing organizations’ self‐sufficiency programs

Abstract

In recent years, interest has grown at the federal level in strategies to combine subsidized housing with programs promoting household self‐sufficiency. This article explores how nonprofit housing organizations conceptualize their self‐sufficiency programs for their residents. A broad definition of self‐sufficiency is presented—one that is not exclusively focused on the individual and, instead, also includes program strategies that are focused on changing the context in which individuals live and work.

The paper then analyzes the relationship between the self‐sufficiency strategies being implemented in the nonprofit housing world and how these organizations will be affected by welfare reform, the shrinking and restructuring of federally subsidized housing, the emergence of block grant job training and workforce development programs, and the general devolution of government programs into ever more fungible pots at state and local levels. These transformations in the domestic policy agenda will present challenges to nonprofit housing organizations and to the goal of promoting self‐sufficiency.     

Environmental policy and equity: The case of superfund

This article analyzes the equity implications of the EPA's Superfund program by examining the geographic distribution of sites, who pays for cleanup, and cleanup pace. Although the “polluter pays” principle is used to justify Superfund policy, it is a goal that is not—and indeed usually cannot—be attained for past contamination. Further, the geographic distribution of Superfund sites suggests that the likely beneficiaries of program expenditures live in counties that are on average both wealthier and more highly educated than the rest, and also have lower rates of poverty. The pace of the EPA's cleanups, however, depends mostly on the sites' potential hazard, and is not apparently motivated by the localities' socioeconomic characteristics or political representation. The program is found in several respects to be both inefficient and inequitable, yet Superfund enjoys considerable support for reasons beyond these traditional public policy goals, including its political and symbolic appeal.     

Taken for Granted? Managing for Social Equity in Grant Programs

Managing for social equity performance has long been a goal without much guidance for public managers. We examine social equity performance in the context of indirect governance through the administration of grant programs and, more specifically, the matching of policy responses (grant funding) to social needs. Grant program managers must allocate funding to match needs while also ensuring accountability, but common administrative models that rely on competition can undermine social equity performance. We develop a unique framework to analyze the relative social equity performance of four models of grant administration in general. These models are defined by whether competitions or formulas are used to select grantees and to allocate funding. We test the implications of the framework in an analysis of funding distributions from the nonentitlement Community Development Block Grant program in four states. Our findings suggest that social equity in grant programs is better served when grantors do not rely solely on competitive grant contracting in the selection and distribution of grant funds, which is typical in grant administration. However, policy makers and managers can design institutional arrangements that utilize competition, but in a manner that does not create a bias against more socially equitable funding decisions.     

影响个人捐赠决策的感知特性及其维度结构——基于中国的实证经验

为了吸引个人捐助,非营利组织必需采取有针对性的营销手段来增加这一捐赠群体对该组织及其公益事业的良好感知,以满足他们的利他或利己需求,这说明影响个人捐赠行为决策的感知特性将值得探索。为此,本研究在中国文化传统背景下,运用探索性与验证性方法对影响个人捐赠行为决策的感知特性及维度结构进行了实证研究。结果表明:(1)在中国背景下,影响个人捐赠行为决策的感知特性有两个层面,即对非营利组织的感知与对公益事项的感知;(2)非营利组织感知层面,主要是个人捐赠者对运作绩效、品牌资产的感知,后者由品牌个性、形象及意识三个维度构成,而公益事项感知层面的结构分为5个维度,分别是公益事项效用、重要性、可参与性、可接近性及与价值观一致性。     

The German Gemeinwirtschaftslehre: Implications for modern nonprofit economics

This article examines the way modern nonprofit economics can be informed by the Gemeinwirtschaftslehre, a strand of public and nonprofit economics that was popular in German‐speaking countries until the 1980s. Despite its present decline, the Gemeinwirtschaftslehre yields a valuable implication that nonprofit firms address market failure by supplanting the pecuniary entrepreneurial motivation with a nonpecuniary one. In this article, this implication is used to reconsider two central and controversial issues in modern nonprofit economics: the rationale behind the nondistribution constraint in nonprofit firms, and the integration between the market failure and supply‐side theories of the nonprofit sector. The article concludes by discussing the emerging prospects for empirical research.     

How does government funding affect nonprofits' program spending? Evidence from international development organizations

Under the new governance models, the scope of government funding of nonprofit activities in service delivery and policy implementation is extensive. There is a long‐standing concern that government funding may compromise nonprofit operations and lead to unintended consequences. This research examines the concern by exploring the effect of government funding on nonprofits' spending on programs and services. Existing theories and empirical evidence propose competing arguments concerning the relationship between government funding and nonprofits' program spending. Using a 20‐year panel dataset of international development nonprofits registered with the United States Agency for International Development, we find that nonprofits receiving more government funding spend significantly higher proportions of their organizational resources on development programs. Government funding seems to increase nonprofits' program spending and to make them more focused on their mission‐related activities.     

Who Gains from Charitable Tax Credit Programs? The Arizona Model

The Bush administration and some states have promoted charitable tax credits as a way to increase private charitable giving, to support antipoverty programs, and to allow taxpayers to directly determine the utility and effectiveness of nonprofit services. Looking at Arizona's charitable tax credit program, this study assesses the strengths and limitations of this policy approach. Although charitable giving increased during the first two years of the program (1998 and 1999), tax returns from 2000 suggest it may be difficult to sustain these gains in a weak economy. Larger and better-known nonprofits and taxpayers who itemize their returns are the primary beneficiaries of the program. The program may put small but well-run organizations at a competitive disadvantage, weaken accountability in the sector, and pose administrative challenges to state departments of revenue. This analysis suggests that tax credits are not a panacea for the funding needs of nonprofits.     

A practical analysis of shared‐appreciation mortgages

Abstract

When the development of large‐scale public housing projects was discontinued in the 1970s in both Canada and the United States, the policy response was very different. This article reviews the nature of the dissimilar low‐income housing policy paths, documenting the role of federal housing policy in the evolution of a significant nonprofit “third sector” in Canada's housing system; the decision of the U.S. federal government to rely on the private sector for subsidized rental supply; and, with very little help from the federal government, the ‘bottom‐up” attempt to develop a nonprofit housing sector in communities throughout the United States. In Canada, a permanent stock of good‐quality, nonprofit social housing was created along with a growing and increasingly competent community‐based housing development sector.

The Canadian experience demonstrates that it takes time to build the capacity of the nonprofit sector. The U.S. experience demonstrates that there is a great deal of community‐based talent ready and willing to provide nonprofit housing if reliable and adequate funding is available. Canada has made outstanding progress relative to the United States in the area of affordable housing supply, creating yet another small but significant difference in the quality of life for lower income households. The general Canadian approach to consistent national support of nonprofit and cooperative housing can be applied in the United States. Canada's relative success is not based on unique structural or systemic differences—that is, it is a matter of political choice and political will. The United States should look to Canada's 20‐year experience to determine whether some of the mechanisms used to support Canada's nonprofit sector might be transferable to the United States.     

Strategic Positioning and the Financing of Nonprofit Organizations: Is Efficiency Rewarded in the Contributions Marketplace?

This article addresses the question of whether operational efficiency is recognized and rewarded by the private funders that support nonprofit organizations in fields ranging from education to social service to arts and beyond. Looking at the administrative efficiency and fundraising results of a large sample of nonprofit organizations over an 11-year period, we find that nonprofits that position themselves as cost efficient—reporting low administrative to total expense ratios—fared no better over time than less efficient appearing organizations in the market for individual, foundation, and corporate contributions. From this analysis, we suggest that economizing may not always be the best strategy in the nonprofit sector.     

Commercialism in nonprofit hospitals

The private nonprofit hospital is the dominant organizational form in the U.S. hospital industry. Various reasons have been advanced for its high market share. As hospitals undergo massive changes due in large part to changes in payment practices, there is widespread concern that nonprofit hospitals may become less committed to noncommercial activities. This may even be more likely when such hospitals convert to for-profit status. The empirical evidence indicates that, on average, hospitals of nonprofit and for-profit ownership are similar in the provision of uncompensated care, the quality of care, and the adoption of technology. Conversion of a nonprofit to for-profit status does not adversely affect the provision of uncompensated care on average. However, for-profits are more likely to be located in areas where consumers have the ability to pay for care. As hospital markets become more competitive and the opportunity for cross-subsidizing more unprofitable, collective-good activities will become increasingly difficult. Support for such activities, if they are to exist, will have to come from explicit public subsidies.     

Doing Things Right: Effectiveness in Local Nonprofit Organizations, A Panel Study

This study investigates whether nonprofit organizational effectiveness is judged consistently by differing constituencies and whether changes in board effectiveness and overall organizational effectiveness (judged by differing constituencies) are the result of changes in the use of practices regarded as the "right way" to manage. The results show that different constituencies judged the effectiveness of nonprofit organizations differently, at both periods; that a change in the use of correct board practices over time, controlling for board effectiveness at time 1, was not related to board effectiveness at time 2; and that a change in the use of correct management practices, controlling for organizational effectiveness at time 1, was not related to organizational effectiveness at time 2, except for board members. Implications of the results are considered. Claims about best practices for nonprofit boards and organizations must be evaluated more critically. Finding the right fit among practices is more important than doing things the "right way.     

How Location Efficient Is LIHTC? Measuring and Explaining State-Level Achievement

A growing recognition that the cost of transportation should be included in calculations of housing affordability has led to efforts to promote location efficiency (LE) in affordable housing policy. Because the program is responsible for most new affordable housing in the United States, the Low Income Housing Tax Credit (LIHTC) program has the potential to be a link between housing affordability and LE. This research analyzes the extent to which LIHTC units built between 2007 and 2011 were in location-efficient places. Ordinary least squares regression analysis was used to test the role of market, policy, developer, and urban form factors in determining state-level LIHTC LE. We find that for the nation as a whole, from a quarter to half of LIHTC units added during this period were in location-efficient places, depending on the LE criteria applied. State-by-state comparisons showed wide variation in both our absolute measures of LIHTC LE and our relative measures of LIHTC LE compared with overall housing in each state. State policy and nonprofit developers were associated with higher LIHTC LE and had a positive effect on a state’s ability to outperform its underlying urban form.     

Administrative (de)centralization,performance equity,and outcome achievement in rural contexts: An empirical study of U.S. child welfare systems

Whether public services are better delivered through centralized or decentralized administrative systems is one of the most enduring debates in public administration. This article contributes to the debate with a study of program outcome achievement in U.S. child welfare services. We examine whether centralized state‐administered or decentralized county‐administered systems are more successful at realizing desired outcomes, which exhibit greater performance equity, and which are more successful at securing program outcomes in rural settings. Using a coarsened exact matching approach to quasi‐experimental research, we find that centralized child welfare systems exhibit greater success at achieving desired outcomes—in both rural contexts and overall. No discernible difference is found in centralized and decentralized systems' performance equity; outcome disparities exist under both structures. The study thus lends credence to centralization arguments, but at the same time cautions that centralized administration is not a structural panacea.