Founding New Nonprofit Organizations

Abstract

In this study, the authors explore how the dynamics associated with the founding of new nonprofit organizations, the characteristics of the founders, and the developmental life cycles of nonprofit organizations contribute to the seemingly fragmented landscape of the nonprofit sector. Based on data collected from interviews with 31 nonprofit organizations, we find that new nonprofits are being created by passionate, entrepreneurial individuals who hope to make a difference in the community. Although these organizations are typically small, with few staff members and small budgets, the extent to which they rely on volunteers and are connected to the broader community varies considerably. Moreover, many founders had little experience volunteering or working in the sector. The findings from this study have important implications for the professional development of nonprofit staff, leaders, and volunteers, and they shed new light on how we think about and describe the founders of nonprofit organizations. Keywordsfounder's syndrome, new nonprofit organizations, market failure, contract failure, government failureThe purpose of this study is to explore the dynamics associated with the founding of new nonprofit organizations. Using data gathered from interviews with the founders of new nonprofit organizations, we explore why the founders created a new nonprofit organization-especially during a time when foundations, governments, and citizens Research Note

A New Focus on Nonprofit ­Entrepreneurship Research

“…Instead, many undertakings in the process of creating a new nonprofit organization occur before the new entity becomes a formal operational entity. However, when selecting a point in time at which to examine nonprofit entrepreneurship process, much of the existing literature has focused on already incorporated operational nonprofits (Cordes et al ; Van Slyke and Lecy ), disregarding or only retrospectively acknowledging or examining any undertakings taking place before the organization is formally founded (Carman and Nesbit ; Dollhopf and Scheitle ).…”

“…Studies seeking to explicate nonprofit entrepreneurship based on established and up‐and‐running nonprofits are prone to a survival bias; they miss potentially interesting and important cases that failed to complete the creation process. In addition, scholars seeking to investigate nascent nonprofit entrepreneurship features often do so by asking nonprofit entrepreneurs in already up‐and‐running organizations to think back about the early stages in the start‐up process (Carman and Nesbit ; Dollhopf and Scheitle ). A key problem with such an approach, where nonprofit researchers end up asking interview or survey questions about the start‐up process retrospectively, is that it is susceptible to hindsight bias.…”

“…It is captured when a recall attempt is benchmarked directly against a recorded earlier response, as in the memory design” (Roese and Vohs , 412). Drawing on what previous research has highlighted as important facets of the nascent nonprofit stage, memory distortion was examined with regard to two main features: start‐up motivation and start‐up funding intentions (Carman and Nesbit ; Haugh ).…”

“…Scholarly attention to nonprofit entrepreneurship is far from new (Young ). Still, interest in the creation of new nonprofits has grown recently, as evidenced by the increasing number of conceptual and empirical studies devoted to vital nonprofit entrepreneurship issues, including the motivations and intentions of nonprofit entrepreneurs, decision‐patterns in nonprofit start‐ups, and properties of emerging and recently founded nonprofit organizations (Carman and Nesbit ; Child, Witesman, and Braudt ; Dollhopf and Scheitle ; Haugh ; Van Slyke and Lecy ). Although scholarship has made several important contributions to our understanding of the creation of new nonprofits, it is not without shortcomings.…”

Entrepreneurship among Nonprofit Arts Organizations: Substituting between Wage and Flexible Labor

“…For example, in studying nascent nonprofit organizations, Andersson () identifies a common set of capacities among entrepreneurs necessary for organizational survival, including well‐developed venture concepts and a good understanding of the market to be served. Other work has identified the motivations of nonprofit founders for electing to form new organizations (Carman and Nesbit ) and attributes of individual founders associated with nonprofit start‐ups' success, including education, experience (Dollhopf and Scheitle ), and attitudes such as openness to change (Sastre‐Castillo, Peris‐Ortiz, and Danvila‐Del Valle ). In examining the broader literature on social entrepreneurship, Guo and Bielefeld distilled the traits of social entrepreneurs as being opportunistic, virtuous, having balanced judgment, and risk endurance (Guo and Bielefeld ).…”