- In a research study by Stanford Business professor Walter W. Powell and his team it was found that the non profit organizations, especially those that were early adopters of management practices, had become less insular by actively collaborating with other organizations and soliciting input from constituents through online channels.
- These non-profit organisations have devoted more attention to strategic planning, pursuing operational efficiencies, and measuring their progress. This has allowed them to reach out to their constituents through web and share their work thereby increasing transparency.
- Young donors in particular want to maintain that transparency and connection which is now possible as nearly all the nonprofits now use social media to interact with clients and the public metrics from the business realm to measure the impact of their efforts.
- The researchers found that nonprofits are also increasingly inclined to view like-minded organizations as collaborators rather than as competitors, and thus are more willing to work together. Data suggests that the only way this was possible is because they adapted to the Management principles from their inception.
For most of the 20th century, nonprofit organizations had a reputation, for better or worse, of being slow to adapt to shifting demands and reluctant to adopt practices typically associated with for-profit corporations.
Then, in the 1990s, donors and consultants started urging charities to become more efficient and business like.What were the consequences? Stanford Business professor Walter W. Powell, along with a team of graduate students, set out to answer that question. Tracking a random sample of 200 nonprofit organizations from the San Francisco Bay Area for over a decade, Powell and colleagues found that organizations that were early adopters of managerial practices have been able to change relatively quickly to become more transparent and collaborative.
Beginning in 2002, the original research team began a three-year process of studying and interviewing the directors of 200 nonprofits representing a wide range of activities, including human services, education, religion, the environment, and the arts.
“In the early part of study, we saw the growing adoption of managerial processes commonly associated with business,” says Powell. Many organizations, for example, had already started using auditors to perform internal financial reviews. Others hired outside consultants to develop and evaluate programs and to assist with strategic planning.
They also employed a form of self-assessment common among businesses: the widely used SWOT analysis, which evaluates an organization’s strengths, weakness, opportunities, and threats. A new emphasis on internal performance and financial acumen led some organizations to change their hiring practices and recruit staff and executive directors holding MBA degrees.
More than a decade later, in 2016, the research team, which includes Christof Brandtner and Aaron Horvath, both graduate students in sociology at Stanford University, revisited the same nonprofits. More than 175 were still active, despite the roller-coaster experience of the Great Recession. Some had left the Bay Area because of the costs, and a few had changed form, becoming for-profits, public agencies, and in one case, a foundation.
“Organizations are becoming more porous and open to more people,” Powell says. “And it is precisely those organizations that were focused on building up their internal capacity in 2005 that now orient their activities outward most distinctively.”
Source : <https://www.gsb.stanford.edu/insights/when-nonprofits-act-businesses-transparency-improves>
XED Global Program Choices for Leadership in Non-Profit Sector
Stanford Business School- Executive Program in Social Entrepreneurship
Stanford Business School - Executive Program for Non-profit Leaders
Harvard Business School- Strategic Perspectives in Non-profit Management
Harvard Business School - Strategic Non-profit Management—India
Northwestern Kellogg - Courageous Leadership: Driving Future Growth in Nonprofits