Abstract

The nature of conflict on nonprofit boards is of real importance to those interested in the development of the nonprofit sector. Board effectiveness depends on meaningful conversation, creativity and wise decision-making. Nonprofit boards bring together people with strong convictions and often different points of view. These differences can be experienced as constructive or destructive. Managed well, they can be a source of energy and innovation. Managed poorly, differences on the board, expressed or unexpressed, can damage personal relationships and diminish organizational effectiveness.

This study seeks to measure conflict and to determine how nonprofit board members experience differences of opinion and styles in the boardroom. What is the nature and extent of board conflict? What types of conflict are more common? Do boards that differ in their design experience conflict differently?

This research is being carried out in part as a response to the challenge issued by David Renz to “conduct empirical research to validate [his] framework and test its utility for board design and development.” (2004, p. 4). In this research we make use of the Renz framework to examine the relationship between board design and conflict. We also argue that much of what scholars have learned about small groups and teams in organizations can be applied to nonprofit boards.

Research by Gabris and Davis (2004) indicates that it is plausible to compare the behavior and patterns of interaction among city council members to that of members of small groups. We believe the same comparisons can be made between nonprofit board members and members of other small groups in organizations.

There is a considerable literature on the kinds and sources of conflict. Amason (1996) and others have written about task and relationship conflict. Moore (1989) has identified data, interest, structural, value and relationship conflicts. The management literature is full of articles on team conflict and how to manage it.

This paper will focus on three types of conflict on nonprofit boards—relationship, task and process (Jehn 1997), and then try to uncover the facts that explain them. It will also consider the validity of Renz’s (2004) framework in terms of the relationship between board design and conflict.

This study is based on a survey of executive directors, board chairs and board members of nonprofit organizations in Wisconsin and Nova Scotia. In order to get a better and more comprehensive understanding of conflict on nonprofit boards, we surveyed executive directors, board chairs, and one board member (a non-officer) from each organization. This approach, which has been used by other scholars in studies of local governments (e.g., Gabris, Golembiewski and Ihrke, 2001; Ihrke, Proctor and Gabris, 2003) will allow us to garner three different perspectives of conflict on nonprofit boards. This three-dimensional picture should prove insightful as we explore the nature, extent, causes and consequences of conflict on nonprofit boards.

Selected References

Amason, A. 1996. “Distinguishing Effects of Functional and Dysfunctional Conflict on Strategic Decision Making: Resolving a Paradox for Top Management teams.” Academy of Management Journal Vol. 39: 123-148.

Gabris, Gerald T. and Trenton J. Davis. 2004. “Suburban City Council and Small Group Behavior: Rethinking the Design of Political Decision-Making Groups in a Democratic System.” Paper presented at the 2004 Annual Conference of the Midwest Political Science Association.

Gabris, Gerald T., Robert T. Golembiewski and Douglas M. Ihrke. 2001. “Leadership Credibility, Board Relations, and Administrative Innovation at the Local Government Level. Journal of Public Administration Research and Theory, Vol. 11: 89-108.

Ihrke, Douglas M., Richard Proctor and Gerald T. Gabris. 2003. “Understanding Innovation in Municipal Government: City Council Member Perspectives.” Journal of Urban Affairs 25(1): 79-90.

Jehn, K.A. 1997. “A Qualitative Analysis of Conflict Types and Dimensions in Organizational Groups.” Administrative Science Quarterly Vol. 42: 530-557.

Moore, Christopher. 1989. The Mediation Process: Practical Strategies for Resolving Conflict. San Francisco: Jossey Bass Publishers.

Renz, David O. 2004. “Exploring the Puzzle of Board Design: What’s Your Type? The Nonprofit Quarterly Vol. 11, No. 4.

Close

Abstract

The historical hot points for the creation of community foundations by trust companies are the years of 1913 and 1915. Beginning in 1913, the Ohio State Legislature amended the banking laws so that any bank could handle trusts, thereby breaking the monopoly that trust companies had on the trust business. It is not a coincidence that in 1914 the Cleveland Trust Company created the Cleveland Foundation. It is also not a coincidence that it did not allow any other bank or trust company to join in this philanthropic venture that was presumably created for the benefit of the community. The Indiana State Legislature changed its trust laws in 1915, and the Indianapolis Foundation was formed in 1916 by the three largest trust companies in the city to the exclusion of all others. Again, trust officers claimed they were combining forces for the common good. What these two foundations supplied to the trust companies included positive public relations, a marketing tool for future trust clients, a benevolent reputation, and a competitive edge over all the other banks and trust companies.

This paper starts with the backgrounds of the presidents of the three trust companies that created the Indianapolis Foundation, and most importantly, their relationships with each other. These were John Hampden Holliday, president of the Union Trust Company, John P. Frenzel, President of the Indiana Trust Company, and Evans Woollen, president of Fletcher Savings and Trust. These were men of business, and all of them served together on boards of commercial enterprises throughout their careers. Holliday and Woollen were both Free Masons, and all were members of “Blue Book” society. In addition, they were all involved in the newspaper business at one time or another and understood the importance of maintaining a good public image. This would permeate the decision making process within the foundation.

The Indianapolis Foundation trustees who were hand-picked by the three trust companies were mostly the trio’s surrogate representatives. They, like the foundation’s creators, were all members of the Indianapolis “Blue Book” society. The fact that the trust company presidents and the vast majority of the trustees gave no money to the foundation during or after their lives puts in serious question their support of its mission. This is especially true for those who were philanthropic in other areas of their lives, yet ignored the financial needs of the community foundation that they helped shape and control. The foundation was simply a business vehicle and another philanthropic stripe to wear on their well-tailored shoulders.

Interestingly, the first three trust funds received from donors who designated the Indianapolis Foundation as beneficiary were from men who no longer lived in Indianapolis but had made their considerable fortunes there. Equally interesting is how the families of these donors challenged the bequests or attempted to exert other kinds of control over the funds.

Primary References:

• Indianapolis Foundation Collection, Ruth Lilly Special Collections and Archives, IUPUI
• Indianapolis Foundation Private Archives
• Indianapolis Foundation Private Archives

Close

Abstract

This paper analyzes how development experts imagine the poor as charity schemers and at the same time as entrepreneurial subjects, governing them through calculative regimes and cultivating their entrepreneurial spirit. In this imagination, on the one hand, the poor entrepreneurially try to maximize their benefit from charitable donations and social service provision. In order to mitigate these self-maximizing subjects in infinite pursue of endless and unconditional aid, charities develop calculative regimes that ensure only the deserving poor are served. On the other hand, the poor are seen as possessing a latent entrepreneurialism that is waiting to be capitalized upon as the solution to their own poverty. In the second case, the latent entrepreneurial spirit of the poor must be awakened, channeled and capitalized upon by fostering microenterprises and funding them via microfinance. Through venture philanthropy, the private sector brings financial resources and management science to bear on development programs, employing calculative regimes such as poverty maps and conditional cash transfers. These market-based solutions teach the poor calculative rationality, turning the poor “charity schemer” into objects of development practice, fundamentally changing them into entrepreneurial subjects who then can become ardent consumers.

Close

Abstract

In markets with asymmetric information about quality, third-parties often introduce ratings, aiming to decrease uncertainty. With ratings increasingly available, two important research questions arise: Do the ratings influence the behavior of those rated? And if so, how do the responses affect the market outcomes? Specifically, I consider how third-party ratings affect the decisions of rated charities, and consequently, overall giving. From a charity's perspective, fundraising expenses have countervailing forces. Asking donors increases contributions, but the expense in doing so hurts ratings that are based on financial metrics. I develop a theoretical model of this trade-off, which provides testable hypotheses. For one, a rated charity will reduce fundraising regardless of its rating, relative to being unrated. Panel data of 5,500 charities over fifteen years confirms that fundraising expenses decline, by 45% for the lowest-rated charities. The large reductions in fundraising expenses cause losses in contributions and account for most of the ratings effects on giving, the other effect being donor responses to ratings. Furthermore, substituting the estimated parameters into the theoretical model implies the fundraising decreases are disproportionately large and charities could earn more in contributions without damaging ratings. These results have implications for interpreting the effectiveness of third-party ratings, for designing ratings, and for improving the supply of public goods and services.

Close

Abstract

This research explores what roles nonprofits play in political representation, using the concept of representational styles and foci. Representational foci refer to those whom nonprofits aim to mainly serve: members, constituents, and the general public. Representational styles denote how nonprofits act on behalf of those people: the delegation, trusteeship, and educational styles. Survey and regression analysis results reveal that nonprofits aiming to mainly serve their members are most likely to directly convey their members’ voices to policy makers – the delegation style. In contrast, nonprofits that aim to advocate primarily for their constituents are likely to pursue what they independently identify as the best interests of their constituents – the trusteeship style. On the other hand, nonprofits that aim to speak chiefly for the general public are most likely to act on their own initiative based on their own assessment of policy issues and to work toward educating the general public – the trusteeship and educational styles.

Close

Abstract

We examine how organizational structure influences strategies over which corporate leaders have significant discretion. Corporate philanthropy is our setting to study how a differentiated structural element, the corporate foundation, constrains the influence of individual senior managers and directors on corporate strategy. Our analysis of Fortune 500 firms from 1996 to 2006 shows that leader characteristics at both the senior management and director levels affect corporate philanthropic contributions. We also find that organizational structure constrains the philanthropic influence of board members, but not senior managers, a result that is contrary to what existing theory would predict. We discuss how these findings advance understanding of how organizational structure and corporate leadership interact, and how organizations can more effectively realize the strategic value of corporate social responsibility activities.

Close