Mark A. Hager

Financial Vulnerability among Arts Organizations: A Test of the Tuckman-Chang Measures

In the past decade, nonprofits scholars have given increased attention to the topic of vulnerability and organizational demise. An early contribution to this literature was Tuckman and Chang’s elaboration of four financial ratios that they believe could be used to predict financial vulnerability. These measures have largely escaped empirical tests. This research note describes a test of the Tuckman-Chang financial vulnerability measures among a population of nonprofit arts organizations. The article concludes that although the Tuckman-Chang measures do not have utility for all types of arts nonprofits, the measures nonetheless show substantial promise for predicting the closure of some nonprofit organizations.

Structural embeddedness and the liability of newness among nonprofit organizations

Ecological studies have consistently reported that younger organizations are more likely to close or disband than older organizations. This article uses neo-institutional theory and social capital theory to explore this finding. We derive hypotheses from these perspectives and test them on a panel of nonprofit organizations in Minneapolis-St Paul (USA) using event history analysis. We find that larger organizations and organizations more dependent upon private donations are less likely to close, and government funding reduces the age effect on mortality; that is, older and younger publicly funded organizations are equally likely to survive or fail. However, among older organizations, not having government funding increases chances of survival. In contrast, volunteer staffing accentuates the age effect. Older organizations that were more dependent on volunteers had a lower likelihood of closure than younger organizations dependent on volunteers, while age had no effect on closure for organizations not dependent on volunteers. We conclude by examining our findings in light of the extant thinking on the liability of newness and the role of institutional and network embeddedness on the chances of organizational survival.

Organizational characteristics and funding environments: A study of a population of United Way-affiliated nonprofits

This study examines a population of United Way–affiliated nonprofit organizations in Massachusetts (1) to test hypotheses generated by previous research on relationships between government funding and specific nonprofit organizational characteristics, (2) to compare differences in organizational characteristics between nonprofits receiving higher percentages of revenues from the United Way and from government sources, and (3) to explore associations between government funding and United Way and underexamined characteristics, including use of commercial income and racial diversity of organizational membership. The study supports previous research on the relationship between government funding and nonprofit characteristics, with one notable exception—less administrative complexity was associated with higher percentages of government funding. The study also finds differences in organizational characteristics between nonprofits with higher proportions of government funding and those with higher percentages of United Way funding, including organization size, number of board members, administrative complexity, use of volunteers, and the racial diversity of boards, staff, and volunteers.

Tales From the Grave Organizations' Accounts of Their Own Demise

Competing theories of organizational behavior offer a variety of reasons why organizations cease to exist. Some reasons are internal to the organization, such as losing control over financial matters and being unable to routinize procedures. Other reasons are environmental, such as changing market conditions, lacking social capital, outside regulation, and not being perceived as legitimate by external power holders. The authors interviewed representatives from dead nonprofit organizations to determine the extent to which these theoretical explanations match with respondent understandings of why their organizations closed. Respondents were more likely to attribute death to their smallness, youth, financial difficulties, personnel turnover, being perceived as unimportant, or decreased demand for their services. Organizations that said they were “too young” or “too small” were more likely to say that they were too disconnected from other organizations in the community, thus shedding light on why youth and smallness are such a liability for organizations.

Engagement Motivations in Professional Associations

This article follows Knoke in exploring how public incentives offered by professional associations (such as lobbying on behalf of collective interests) compete with private incentives (such as member networking opportunity) in promoting monetary gifts, voluntary coproduction of organizational outcomes, and commitment to the association. Olson’s contention that public goods do not motivate civic engagement has fostered several decades of research geared toward establishing the role of such goods in associational outcomes. Based on membership surveys of three engineering associations and two health care associations, the study concludes that private incentives are not universal motivators, while public incentives show some evidence of motivating engagement. Unexpected differences between the two fields of professional association are striking, prompting suggestions that current practitioners and future research give attention to field differences and resist overgeneralization regarding engagement motivations, outcomes, and commitment across professional fields.

Models of collaboration between nonprofit organizations

Purpose - – Third sector organizations regularly innovate through collaboration with other organizations in order to secure resources and to increase the potential to more effectively meet each collaborators mission. Following a review of relevant literature, the purpose of this paper is to explore and document the variety of ways that third sector organizations collaborate with other nonprofit organizations. Design/methodology/approach - – The paper reviews the literature regarding motivations to collaborate, barriers to collaboration, and ways to ensure that collaboration is successful. Drawing on exemplary cases of collaboration that applied for a national (USA) prize, the paper describes the range of collaborations that third sector organizations used to enhance their performance and productivity. Findings - – The analysis culminates in eight models: the fully integrated merger, partially integrated merger, joint program office, joint partnership with affiliated programming, joint partnership for issue advocacy, joint partnership with a new formal organization, joint administrative operations, and confederation. Research limitations/implications - – All cases are drawn from one country in one part of the world, the USA; some models will have less veracity in other countries or contexts, and the nonprofit sectors of other countries will likely generate additional kinds of models not anticipated by the USA cases. Second, the eight models generated by the method are the result of debate, deliberation, and iterative process carried out by two coders. Other coders employing the same analytic process might generate more or fewer models. Practical implications - – Once nonprofit boards, staff, and other advocates understand the potential that can come with collaboration, blurring boundaries and giving up autonomy might not seem so intimidating. The practical value of our work is in reporting the wide array of options available to nonprofits – models that staff and board can use to plot their way forward. Social implications - – The value of our work to research is identification of the assortment of ways that nonprofits collaborate. Future research may consider how any of the issues discussed in the literature – trust, co-opetition, resource dependence, network connectedness – vary or are conditioned by differences across these models of collaboration. Originality/value - – The paper documents collaboration as a viable strategy for the enhancement of performance and productivity among third sector organizations in the USA. For each model described, the paper discusses the circumstances in which they might be used, as well as the challenges and advantages associated with implementation.

Motivational and Demographic Factors for Performing Arts Attendance Across Place and Form

Previous research seeking to explain why people attend live performing arts events has focused primarily on demographic explanations, such as the age or income of patrons. Recent research reinvigorates an old debate regarding the veracity of psychological motivations for attendance, such as an appreciation for beauty or the opportunity to socialize with others. We add to this line of inquiry by investigating how demographic and motivation explanations fare across three cities, and for three different art forms. We find that demographic variables fare better overall than psychological motivations across place and form. Despite evidence of strong consistency of the magnitude of variable coefficients across place and form, we conclude with warnings that inconsistencies of significant effects between place and form should cause us to question whether results in one or several sites can provide stable and useful generalizations for managers and arts marketers.

Explaining Demise Among Nonprofit Organizations

Explaining Demise Among Nonprofit Organizations reports on a study of closure of nonprofit organizations in the Minneapolis–St. Paul metropolitan area from 1980 to 1994. The theoretical literature focusing on the behavior of individual and populations of organizations suggests eight reasonably distinct theoretical explanations why nonprofit organizations close. These theories include the liabilities of newness and small size, the inability to reproduce commitment, intraorganizational conflict, inability to mobilize human resources, lack of legitimacy, inability to compete for scarce or depleted financial resources, lack of connections to other organizations, and the completion of the organization’s mission. Longitudinal data collected by Joseph Galaskiewicz on organizational characteristics provide the opportunity to determine which theories have the most fidelity in terms of explaining the closure of nonprofit organizations. Of a random sample of 229 public charities interviewed in 1980, 73 had exited the panel by the end of the study period in 1994. Of these, 37 closed their doors. This study focuses on those 37 organizations that closed. Several kinds of data contribute to a final accounting of which theories are supported in the sample studied. Exit interviews with representatives from 31 of the closed organizations yield factors that interviewees believe were most important in explaining the closure of their organizations. Formal analyses of the organizational narratives provide initial insights into the reasons that organizations closed. In addition, the dissertation presents an analysis of longitudinal survey data. Rather than analyzing cause on a case-by-case basis, this approach yields probabilistic explanations about the relationships between variables hypothesized to vary with organizational closure. Results from the various analyses show consistent support for the liabilities of small size and youth, as well as the liability of competing in a sparse resource niche. Analysis of the open

Local Arts Agencies as Destination Management Organizations

Local arts agencies have entered the local ecology of destination management in the United States as part of the network of organizations seeking to attract cultural tourists. This role has been virtually ignored in both the tourism and the community arts literatures. A national survey of local arts agencies reflects a substantial proportion that report involvement in cultural tourism development. Narrative analysis of descriptions of cultural tourism strategy reveals a range of activities, especially strategic marketing, development of products, and organizational learning through collaborative partnerships. Unexpected among destination management organizations, we learn that local arts agencies are substantially involved in the development of cultural products geared toward facilitating tourism. We propose that future research on destination management should recognize the position and value of local arts agencies in community-level development of cultural tourism.

Divergent views of clients and professionals: A comparison of responses to a needs assessment instrument

Abstract This article presents the findings from a study comparing the responses of human service providers and service users to a community needs assessment survey. The analysis of data from this study provided strong support for the hypothesis that providers would see their clients as more needy than the clients would see themselves. The analysis also suggested support for a second hypothesis that professionals and clients would emphasize different needs. In particular, although both groups of respondents emphasized information/access and material support issues, the groups differed markedly in their perceptions of need for formal support services and services to address social participation concerns. In general, the professionals were more concerned than their clients about personal and family problems, whereas the clients were more concerned with universal human needs, such as access to public libraries and recreational facilities.