450 D1 – MANAGEMENT

Need help with homework Question
First, read Chapter One: Historical Perspectives on Nonprofit Organizations in the United States in the The Jossey-Bass handbook of non-profit leadership and management
  Download The Jossey-Bass handbook of non-profit leadership and management(2nd ed.), which summarizes the history of non-profit organizations in the United States (Hall, 2004).  Then read at least one additional scholarly source at the UAGC Library or on Google Scholar regarding the rise of nonprofits. Support your responses using proper in text citations APA style citations (for assistance, see the UAGC Writing Center’s 
In-Text Citation Helper: A Guide to Making APA In-Text Citations (Links to an external site.)
). Make sure that your initial post includes the information that you have learned from your readings. That is:
· Explain why and how nonprofits came to exist in early America.
· Discuss the social and economic changes that occurred after nonprofits were established. Your initial contribution should be a minimum of 250 to 300 words in length.
The Jossey-Bass Handbook
of Nonprofit Leadership
and Management
Second Edition
Robert D. Herman and Associates
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Herman.ffirs 8/31/04 3:41 PM Page ii
The Jossey-Bass Handbook
of Nonprofit Leadership
and Management
Second Edition
S S
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Herman.ffirs 8/31/04 3:41 PM Page iv
The Jossey-Bass Handbook
of Nonprofit Leadership
and Management
Second Edition
Robert D. Herman and Associates
S S
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Copyright © 2005 by John Wiley & Sons, Inc. All rights reserved.
Published by Jossey-Bass
A Wiley Imprint
989 Market Street, San Francisco, CA 94103-1741 www.josseybass.com
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Library of Congress Cataloging-in-Publication Data
The Jossey-Bass handbook of nonprofit leadership and management/
Robert D. Herman and associates.—2nd ed.
p. cm.
Includes bibliographical references and index.
ISBN 0-7879-6995-8 (hardcover)
1. Nonprofit organizations—Management. I. Herman, Robert D., 1946–
HD62.6.J67 2004
658′.048—dc22
2004015799
Printed in the United States of America
SECOND EDITION
HB Printing 10 9 8 7 6 5 4 3 2 1
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www.josseybass.com
CONTENTS
Tables, Figures, and Exhibits xi
Preface xv
The Editor xxiii
The Contributors xxv
PART ONE: CONTEXT AND INSTITUTIONS 1
1 Historical Perspectives on Nonprofit Organizations in the
United States 3
Peter Dobkin Hall
2 Nonprofit Organizations and Social Institutions 39
Jon Van Til
3 The Legal Framework of the Nonprofit Sector in the United States 63
Thomas Silk
4 The Changing Context of American Nonprofit Management 81
Lester M. Salamon
5 The Internationalization of the Nonprofit Sector 102
Helmut K. Anheier, Nuno Themudo
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PART TWO: KEY LEADERSHIP ISSUES 129
6 Board Leadership and Development 131
Nancy R. Axelrod
7 Executive Leadership 153
Robert D. Herman, Dick Heimovics
8 The Strategy Change Cycle: An Effective Strategic Planning
Approach for Nonprofit Organizations 171
John M. Bryson
9 Ethical Nonprofit Management 204
Thomas H. Jeavons
10 Nonprofit Lobbying 230
Bob Smucker
11 Strategic Alliances 254
John A. Yankey, Carol K. Willen
PART THREE: MANAGING OPERATIONS 275
12 Marketing for Nonprofit Managers 277
Brenda Gainer, Mel S. Moyer
13 Designing and Managing Volunteer Programs 310
Jeffrey L. Brudney
14 Evaluating the Effectiveness of Nonprofit Organizations 345
Vic Murray
15 Managing the Challenges of Government Contracts 371
Steven Rathgeb Smith
16 Outcome Assessment and Program Evaluation 391
John Clayton Thomas
PART FOUR: DEVELOPING AND MANAGING FINANCIAL RESOURCES 417
17 Designing and Managing the Fundraising Program 419
Robert E. Fogal
18 Enterprise Strategies for Generating Revenue 436
Cynthia W. Massarsky
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19 Financial Accounting and Financial Management 466
Robert N. Anthony, David W. Young
20 Management Accounting 513
David W. Young
21 Risk Management 560
Melanie L. Herman
PART FIVE: MANAGING PEOPLE 585
22 Keeping the Community Involved: Recruiting and Retaining
Volunteers 587
Stephen McCurley
23 Finding the Ones You Want, Keeping the Ones You Find: Recruitment
and Retention in Nonprofit Organizations 623
Mary R. Watson, Rikki Abzug
24 Total Rewards Programs in Nonprofit Organizations 660
Nancy E. Day
25 Principles of Training for Volunteers and Employees 703
Nancy Macduff
Conclusion: The Future of Nonprofit Management 731
Robert D. Herman
Name Index 737
Subject Index 745
CONTENTS ix
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TABLES, FIGURES,
AND EXHIBITS
TABLES
4.1 Growing For-Profit Competition in Selected Fields, 1982–1997 87
4.2 Growth in Federal Entitlement Program Spending, 1980–1999 91
4.3 Changing Structure of Nonprofit Revenue, 1977–1997 93
5.1 Size of International Nonprofit Sector Activities in Five
Countries, 1995 105
5.2 Revenue Structure of International Nonprofit Sector Activities
Versus Total Nonprofit Sector in Five Countries, by Revenue
Source, 1995 106
5.3 Income of INGOs Registered with USAID, 1982–2001 109
5.4 Phases of INGO Development 119
10.1 Lobbying Ceilings Under the 1976 Lobby Law 244
13.1 Motivation for Involvement in Volunteer Work, 1965–1991 329
17.1 Gift Range Chart Analyzing the Previous Year’s Giving 423
17.2 Gift Range Chart for $500,000 Annual Fundraising Goal 424
17.3 Suggested Guidelines for Fundraising Costs 429
22.1 Reasons Why People Stop Volunteering 609
22.2 Negative Perceptions Among Volunteers in the United Kingdom 609
24.1 Assigning Points to Factor Levels 677
24.2 Job Evaluation Spreadsheet 680
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FIGURES
5.1 Growth in the Number of International Nongovernmental
Organizations, 1970–2002 107
5.2 Aid from the OECD to Developing Countries and Share of
NGOs as a Percentage of the Total, 1970–1999 108
5.3 Composition of NGO Aid to Developing Countries, 1970–1999 108
5.4 Growth in INGO Membership, 1990–2000, by Region 110
5.5 Growth in INGO Membership, 1990–2000, by Country Income
Group 111
5.6 INGOs, 1990–2000, by Purpose 112
8.1 The Strategy Change Cycle 174
8.2 Strategic Planning System for Layered or Stacked Units of
Management 195
11.1 The Partnership Matrix 259
11.2 Strategic Alliance Continua 261
11.3 Stages of Strategic Alliance Development 262
12.1 Positioning Map for Hypothetical Immigrant-Serving Agencies 287
14.1 Generic Measurement-Based Logic Model 364
14.2 Generic Level-Based Logic Model 364
19.1 Business Risk Versus Financial Risk 493
20.1 Resource Usage: A Conceptual Framework 517
20.2 Types of Cost Behavior 529
20.3 Fixed and Variable Costs Versus Mission Center and Service
Center Costs 531
20.4 Graphic Representation of Revenue, Fixed Costs, and Variable
Costs 541
20.5 Phases of the Responsibility Accounting Process 549
22.1 The Volunteer Management Process 588
24.1 Regression Analysis Illustrating the Relationship of Current
Salaries to Market Data 672
24.2 Broadbanding Superimposed on a Traditional Salary Structure 684
25.1 Praxis 707
EXHIBITS
6.1 Primary Governance Roles Ascribed to Boards 136
6.2 Board Development Practices Linked to Board Competencies 139
6.3 Sample Governance Committee Job Description 146
6.4 Ingredients of an Effective Formal Board Self-Assessment Process 147
8.1 Balanced Scorecard for the United Way of Southeastern
New England 182
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16.1 Impact Model for a Training Program for Executives of Local
Branches of a National Nonprofit 397
17.1 Three Stages of Fundraising Development 420
17.2 Fundraising Management Grid 427
19.1 Sample Statement of Activities for Anderson College for the
Year Ended June 30, 2003, with Comparative Figures for 2002 472
19.2 Sample Balance Sheet for Anderson College as of June 30, 2003
and 2002 474
19.3 Examples of Leverage 492
19.4 A System of Ratios 496
19.5 Cash Needs Associated with Growth 497
19.6 Summary of Ratio Computations 503
20.1 Contribution Income Statement for Clearwater Transportation
Service 536
20.2 Types of Responsibility Centers 545
20.3 Examples of Cost Drivers in a Hospital 555
20.4 Nonprofit Management Accounting: A Summary 557
21.1 Rating the Risks Identified by an After-School Tutorial Program 569
21.2 Sample Item on a Risk Management Action Plan 570
23.1 Sample Human Resource Audit Checklist 639
23.2 The Candidate Selection Process 646
23.3 Relevant Human Resource Questions as a Reflection of
Organization Size and Life Cycle 655
24.1 Selected Sources of Salary Surveys 670
25.1 Training or Lesson Plan 720
TABLES, FIGURES, AND EXHIBITS xiii
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PREFACE
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A
ll of us associated with The Jossey-Bass Handbook of Nonprofit Leadership
and Management are pleased to have the opportunity to present this sec-
ond edition. Of course, all the chapters have been revised and updated to
reflect current research, theory, and practice. Most chapters are again written
by the same authorities who wrote the first-edition chapters, though second au-
thors have changed in a couple of instances.
Also, one chapter has been added in place of a chapter prepared for the first
edition; Chapter Eleven, “Strategic Alliances,” considers one of the areas of rapid
development since the publication of the first edition. Chapter Twenty-Three,
on finding and keeping the right employees, has two new authors, Mary Watson
and Rikki Abzug, both of whom have substantial expertise in researching and
experience in working with nonprofit organizations. Their chapter deals with a
perennial issue in nonprofit organizations, attracting and retaining excellent em-
ployees, usually without the ability to pay as much as private sector or often
government employers.
Nonprofit organizations continue to be different, even as they change and
evolve due to the changing funding and institutional environments they face.
They are unlike both business and government in certain fundamental ways
while similar in other ways. Nonprofit organizations, like businesses, rely on vol-
untary exchanges to obtain revenues and other resources. In business, customers
supply the resources for the service they receive. Unlike business, nonprofit
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organizations (especially publicly supported charities, the sort of nonprofit or-
ganization on which this volume focuses) typically depend, at least to some ex-
tent, on one group, donors or government, for the resources necessary to
provide a different group, the clients or beneficiaries, with services. Indeed, one
reason nonprofit organizations exist is that the services they offer would not be
provided otherwise. This is the justification for the tax and other public policy
preferences nonprofit organizations receive—they provide public goods that
would otherwise not be provided, either by business or by government.
A public good, in the economic sense, is one that has two special features:
first, it costs no more to provide it to many than it does to a few, and second,
there is no easy way to prevent those who have not contributed to its provision
from consuming it once it has been produced (economists call this the “free
rider” problem). The production of public goods—clean water, for example—is
typically the responsibility of government. In The Nonprofit Economy (Harvard
University Press, 1988), Burton Weisbrod argues that democratic governments
are constrained to provide public goods at the level that satisfies the median
voter, as preferences for and willingness to pay taxes in support of public goods
varies. Thus there is unsatisfied demand for some public goods, and nonprofit
organizations are often created to meet such demands.
Nonprofit organizations, like governments, generally supply services with
public goods characteristics, but unlike governments, they cannot compel users
to pay for those services. Moreover, nonprofit organizations, unlike govern-
ments, need not provide their services to all who meet eligibility requirements.
Nonprofit organizations may serve particular interests and groups. The partic-
ularism of nonprofit organizations enhances the articulation and advocacy of a
wide range of values and causes. In this way, nonprofit organizations contribute
to pluralism and the strengthening of civil society.
To summarize, nonprofit organizations are in some ways similar to and are
yet different from both businesses and governments. Some, of course, are more
similar to businesses; those that depend almost entirely on government funding
are more similar to government; and others, including all volunteer nonprofit or-
ganizations, are substantially different from both business and government.
This volume is based on the premise that the distinctive (and varied) char-
acter of nonprofit organizations affects the leadership and management of such
organizations. Those at the helms of organizations working in the nonprofit sec-
tor have become increasingly aware of the significance of their work in North
American societies. The following indicators all testify to the growing impor-
tance of nonprofit organizations in Canada and the United States over the past
twenty to twenty-five years: the number and strength of sector-serving associ-
ations have increased; publications by and about nonprofit organizations con-
tinue to expand; and the number of university programs devoted to research
xvi PREFACE
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and teaching about nonprofit management, philanthropy, and volunteerism has
substantially grown.
As those working in North American nonprofit sectors have become more
aware of being part of a sector, interest in the distinctive leadership and man-
agement challenges that nonprofit organizations face has also increased. While
the swelling volume of publications relating to voluntarism, philanthropy, and
nonprofit management has served the sector well in many ways, all too often
advice on financial management, human resource management problems and
solutions (for both employees and volunteers), and organizational strategies
and leadership has only been available in fragmentary pieces published in far-
flung periodicals and sometimes not easily available sources. The need for a
single volume that offers a comprehensive and thorough treatment of the func-
tions, processes, and strategies of nonprofit organizational leadership and man-
agement remains. This second edition will continue to meet that need.
INTENDED AUDIENCE
In that this handbook is designed to provide comprehensive and in-depth de-
scriptions of effective leadership and management practices that apply through-
out a nonprofit organization, we believe and intend the volume to be of utmost
value to a wide range of practitioners. It will be especially useful to anyone who
has come to a management or leadership position from a program service back-
ground, to anyone who has moved from a relatively specialized management
niche into a position with extensive responsibilities, and to everyone who seeks
a solid core of support for the wide range of knowledge and skills that nonprofit
leadership requires. In addition to those in paid staff positions, this volume will
benefit board members and other volunteer leaders who are interested in enlarg-
ing their understanding of the nature of nonprofit organizations. This handbook
will also be useful to those, both in formal education programs and in self-
directed learning, who want to prepare for careers in nonprofit management.
Finally, we believe this book will continue to be an important resource to those
who work with nonprofit organizations as consultants, technical assistance
providers, regulators, and funders.
OVERVIEW OF THE CONTENTS
The volume is organized into five parts. Part One is devoted to describing the
context and institutions within which nonprofit organizations currently operate
and the context in which they are likely to work in the near future. Nonprofit
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organizations have been shaped and will be continue to be shaped by the his-
torical times and forces, by social institutions, laws and regulations, political and
economic trends and events, and increasing globalization. The chapters in Part
One consider how these large-scale phenomena have affected and are affecting
nonprofit organizations and their leadership and management. In Chapter One,
Peter Dobkin Hall deftly describes the complex history of philanthropy and non-
profit organizations in the United States, showing how and why the nonprofit
sector has been invented. Jon Van Til, in Chapter Two, describes how both so-
cial institutions and sector institutions affect nonprofit organizations. In Chap-
ter Three, Thomas Silk uses an extended illustrative case to clarify the crucial
legal and regulatory environment in which U.S. nonprofit organizations operate.
The number, types, activities, and operations of nonprofit organizations are
greatly influenced by political and economic events. In Chapter Four, Lester M.
Salamon analyzes the impact of large-scale economic, political, and demo-
graphic forces on various segments of the nonprofit sector. Helmut K. Anheier
and Nuno Themudo, in Chapter Five, describe the increasing internationaliza-
tion of nonprofit and nongovernmental organizations and consider questions of
the role of such organizations in creating a global civil society.
Part Two covers key leadership issues in nonprofit organizations. Boards of
directors of nonprofit organizations hold the prime leadership position and are
expected to provide, in large part, leadership in defining their organization’s
mission and values. In Chapter Six, Nancy R. Axelrod analyzes the continuing
challenge of developing board leadership and describes some promising ap-
proaches for helping boards meet their leadership obligations. In Chapter Seven,
Dick Heimovics and I examine the crucial role of chief executives in nonprofit
organizations and describe the board-centered, external, and political leader-
ship skills of especially effective chief executives. One of the key leadership
tasks facing boards and executives is that of strategically designing programs to
most effectively achieve an organization’s mission. John M. Bryson provides
guidelines for the effective use of strategic planning and management by non-
profit organizations in Chapter Eight. In an era in which many businesses, as
well as government and nonprofit organizations, have been revealed as lacking
all ethical sense, nonprofit leaders must meet the challenge of creating and sus-
taining organizational cultures that uphold the highest ethical standards.
Thomas H. Jeavons offers important advice about how this can be achieved in
Chapter Nine. Nonprofit leaders continually face questions of whether, when,
and how to affect legislation relevant to their organizations’ missions. Bob
Smucker answers those questions in Chapter Ten. Nearly all nonprofit organi-
zations now face questions about whether and with whom to form strategic al-
liances of various types so as better to accomplish their missions. John A.
Yankey and Carol K. Willen, in a welcome addition to this second edition, ad-
dress these issues in Chapter Eleven.
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The contributions in Part Three get at the heart of nonprofit organizational
operations. Increasing numbers of nonprofit organizations have recognized the
need to explicitly manage their exchanges with a wide range of constituents.
Brenda Gainer and Mel S. Moyer, in Chapter Twelve, provide nonprofit leaders
with a thorough analysis of the uses of marketing, highlighting the important
ways that marketing efforts can help improve mission accomplishment. Most
nonprofit organizations rely on volunteers, many to a substantial extent. In
Chapter Thirteen, Jeffrey L. Brudney describes the issues and choices to be con-
sidered in designing and running effective volunteer programs. In Chapter Four-
teen, Vic Murray considers the difficulties of evaluating nonprofit organizational
effectiveness and suggests some useful ways of practically dealing with the con-
siderable challenges. As Steven Rathgeb Smith observes in Chapter Fifteen, con-
tracting with government is a fact of life for many nonprofit organizations,
though contracting brings predictable (as well as unpredictable) problems.
Smith provides concrete advice about effectively dealing with problems. Gov-
ernments and other funders have become more demanding about evidence of
program effectiveness. John Clayton Thomas, in Chapter Sixteen, reviews how
nonprofit organizations can successfully undertake both outcome assessment
and more thorough program evaluations.
Part Four takes up topics crucial to developing and managing financial re-
sources. While an ever-increasing number of publications offer advice on spe-
cific fundraising techniques, few of those publications deal with issues of how
fundraising should be integrated with the mission and culture of a nonprofit or-
ganization. In Chapter Seventeen, Robert E. Fogal not only tells how to design
and manage the fundraising program but also provides perspective on integrat-
ing mission and fundraising. The past decade has seen increasing interest on
the part of some traditional funders for nonprofit organizations to become more
self-supporting, and many nonprofit organizations have made efforts to become
more commercial (also sometimes described as social entrepreneurship). Cyn-
thia W. Massarsky, in Chapter Eighteen, describes the full range of commercial
income options nonprofit organizations might consider, giving special attention
to issues of thorough planning and analysis before deciding on an earned in-
come strategy. Robert N. Anthony and David W. Young, in Chapter Nineteen,
cover the principles and management uses of financial accounting, while Young,
in Chapter Twenty, explains how nonprofit managers can use management ac-
counting information to manage operations more efficiently. One important way
that nonprofit organizations can control both costs and exposure to losses is
through better risk management. Melanie L. Herman, in Chapter Twenty-One,
provides thorough and readable guidelines for making decisions about a com-
prehensive risk management program.
Part Five contains four chapters on any nonprofit’s most important assets—
the people who, whether as employees or volunteers, make the organization
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what it is. In Chapter Twenty-Two, Stephen McCurley specifies how an organi-
zation can find, engage, and keep volunteers who are suited to it and its work.
Mary R. Watson and Rikki Abzug, in Chapter Twenty-Three, describe not only
the steps and appropriate practices for selecting employees but also the many
(nonfinancial) ways in which nonprofit organizations can retain the committed
and excellent employees that often make nonprofit organizations great places to
work. In Chapter Twenty-Four, Nancy E. Day focuses specifically on establish-
ing and operating compensation and benefit programs that suit a nonprofit or-
ganization and the needs and expectations of its employees. Nancy Macduff, in
Chapter Twenty-Five, considers how nonprofit organizations can assess their
training needs and then design and carry out appropriate programs for both paid
and volunteer staff.
In the Conclusion, I offer a personal assessment of the current environment
and the forces pushing many nonprofit organizations to become “more busi-
nesslike,” arguing that there are risks to doing so and suggesting some steps that
nonprofit organizations and associations serving the sector can take to maintain
the distinctiveness and legitimacy of the sector.
Like the first edition, this second edition of the handbook presents the best
and most applicable practical leadership and management information currently
available on a wide range of topics. That the information is the best and most
applicable is a result, I believe, of deriving practical implications not solely from
current practice but even more from the latest research and the most current the-
ory. I believe and hope that this second edition, like the first, will be a widely
used reference, serving to inform leaders, leaders-to-be, managers, and managers-
to-be for many years to come.
ACKNOWLEDGMENTS
I especially want to acknowledge and thank all of the chapter authors. I was
pleased that nearly all of the authors of chapters in the first edition were will-
ing take part by revising and updating their chapters for this second edition.
Most authors, over the intervening decade, had become even busier, and I know
that meeting the deadlines and doing a thorough job was often difficult. I also
greatly appreciate the efforts of the new authors who have prepared wholly new
chapters. They too faced short deadlines, but without a foundation to start with.
I also want to thank the readers Jossey-Bass asked to review the first edition
and make suggestions for the second edition. Though we did not always follow
your suggestions, the contributors and I appreciate the value of those sugges-
tions and the serious thinking that went into them. Thanks are also due to many
people who responded to my solicitation to provide suggestions about revisions;
those suggestions were often very helpful.
xx PREFACE
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I thank Allison M. Brunner, editorial assistant at Jossey-Bass, who has re-
sponded to my frequent questions and importunings with helpful good humor.
I also appreciate the support and guidance of Dorothy Hearst, senior editor at
Jossey-Bass, who has calmly dealt with the problems and concerns I presented
to her.
Finally, my thanks to my wife, Charlotte, for all her support over the years
and during the months when I was using much of our time on this volume.
Kansas City, Missouri Robert D. Herman
August 2004 Editor
PREFACE xxi
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THE EDITOR
xxiii
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Robert D. Herman is a professor in the Cookingham Institute of Public Affairs,
H. W. Bloch School of Business and Public Administration, University of Mis-
souri, Kansas City. He teaches in the institute’s M.P.A. specialization in non-
profit management, which he helped create. He is also a senior fellow with the
university’s Midwest Center for Nonprofit Leadership. He received his B.A. de-
gree (1968) in economics from Kansas State University and his M.S. (1971) and
Ph.D. (1976) degrees, both in organizational behavior, from Cornell University.
Herman’s previous research has concentrated on the effective leadership of
nonprofit charitable organizations, including chief executive–board relations. His
current research focuses on investigating nonprofit organizational effectiveness.
He is past president of the Association of Voluntary Action Scholars (now
known as the Association for Research on Nonprofit Organizations and Volun-
tary Action). He has also served on several boards of nonprofit organizations
and works with nonprofit organizations, in the United States and internation-
ally, in consulting and advisory capacities.
He is coauthor of Executive Leadership in Nonprofit Organizations (with Dick
Heimovics, 1991), coeditor of Nonprofit Boards of Directors (with Jon Van Til,
1989), and author of many articles on nonprofit leadership and governance.
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THE CONTRIBUTORS
xxv
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Rikki Abzug is on the faculty of the Nonprofit Management Program at the
Robert J. Milano Graduate School of Management and Urban Policy, New School
University. Previously, she was the associate director of Yale University’s Pro-
gram on Nonprofit Organizations. She has been a public, nonprofit, and for-
profit management and market research consultant for over fifteen years,
providing consulting services to management groups in the United States,
Poland, and Ukraine. Abzug sat on the board of the Association for Research
on Nonprofit Organizations and Voluntary Action (ARNOVA) and was a found-
ing board member of the Alliance for Nonprofit Governance. She has published
dozens of articles on governance and sectoral and institutional theory and
serves on the editorial board of Nonprofit and Voluntary Sector Quarterly. She
holds a Ph.D. degree in organizational sociology from Yale University and lives
in New Jersey with her husband, the surrealist painter Patrick Brady, and two
daughters.
Helmut K. Anheier is a professor and director of the Center for Civil Society at
UCLA’s School of Public Policy and Social Research and Centennial Professor of
Social Policy at the London School of Economics, where he founded in 1998 and
directed the Centre for Civil Society. Prior to this he was a senior research as-
sociate and project codirector at the Johns Hopkins University Institute for Pol-
icy Studies and associate professor of sociology at Rutgers University. Before
Herman.flast 8/31/04 3:41 PM Page xxv
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