Linking overhead expenses and nonprofit effectiveness: Evidence from Habitat for Humanity

Berrett, Jessica

doi:10.1002/nml.21492

Cited by 12 publications

(4 citation statements)

References 45 publications

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“…Other management capacity dimensions are the ability to create long-term planning and strategic plans (Bryan et al 2021 ; Misener and Doherty 2009 ). Moreover, Berrett ( 2022 ) found that. A growth in management capacity expenses (salaries, professional fees, marketing, and system) mediates a positive relationship between the overhead ratio and the success of nonprofits.…”

Section: Bibliometric Analysismentioning

confidence: 99%

Nonprofit capacity and social performance: mapping the field and future directions

2022

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Nonprofit organizations are critical actors in the Sustainable Development Goals as they provide a wide range of social services to the community and contribute to creating a sustainable future. They must compete for funding or government contracts by showing high social performance. Among the top factors influencing social performance is capacity, and it has received considerable attention in public and nonprofit literature. Capacity refers to the resources, capabilities, and practices required to perform their functions to achieve the social mission and high social performance. However, studies concerning capacity linked with social performance remain controversial. Understanding the linkage between capacity and social performance is relevant to funders, board directors, and management as it helps them enhance organizational performance. This research aims to assess the flow of knowledge in the study field and make recommendations for future research. The study focuses on capacity of nonprofits and thoroughly reviews the literature using complementary bibliometric analysis: co-occurrence analysis of keywords, sources, and authors and bibliographic coupling analysis of documents. We conduct a systematic analysis of peer-reviewed journal articles published between 1955 and 2022. Seven significant themes emerge among the most prominent researchers: (1) the link between capacity and social performance; (2) dimensions of capacity; (3) human resource capacity linked with social performance: (4) financial capacity linked with social performance; (5) capacity building linked with social performance; (6) collaboration and capacity; and (7) factors affecting capacity–social performance. The literature on nonprofits is determined to have inconsistent findings regarding the relationship between capacity and social performance. Research on various factors influencing capacity–social performance relationships is also scarce. This article highlights major principles in the discipline and identifies significant theoretical gaps in the body of knowledge. It also outlines the conceptual foundation for the study and makes recommendations for further research. From a managerial standpoint, the study sheds light on whether capacity is linked to higher performance levels and provides policymakers with guidelines on the implications of capacity building and collaboration.

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Section: Bibliometric Analysismentioning

confidence: 99%

Nonprofit capacity and social performance: mapping the field and future directions

2022

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“…Also nonprofit-probity norms discourage investment; and the consequent impact on nonprofit performance has been investigated in a fragmented nascent literature. Nonprofit norm-busters (i.e., nonprofits lacking financial caution) had 53% more funds to invest than norm-followers in mission-related services over a 10-year period (Mitchell & Calabrese, 2022); nonprofits that invested in infrastructure/staffing were better able to enact their missions (Bedsworth et al, 2008); and higher overhead ratios in nonprofits led to greater mission fulfillment and revenue performance (Berrett, 2021).…”

Section: Innovation Performance and Governance Literaturementioning

confidence: 99%

Nonprofit Boards in Pursuit of Innovation for Growth: Views From the Frontline

Richardson

Kelly

2023

Nonprofit and Voluntary Sector Quarterly

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Conventional thinking holds that for-profits need to innovate for growth to be financially viable. Nevertheless, to date, we have not recognized the importance of nonprofit growth and innovation’s function here. Yet despite “innovation for growth” being an even greater imperative for nonprofits in their quest to resolve societal challenges, prior sector research has, at most, only superficially investigated this construct new to nonprofits. In this first-in-field conceptual project, we weave together a comprehensive literature review with findings from 26 interviews with nonprofit directors. In doing so, we advance the scattered nonprofit-innovation and organization-performance research by describing nonprofit innovation for growth and why it matters. And we originally conceptualize that nonprofit boards seem to prioritize particular factorial determinants new to nonprofit-innovation research in their effective pursuit of innovation for growth.

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“…Previous operationalizations have focused on goal attainment, organizational resources or legitimacy, which resulted in indicators such as financial ratios, self‐rated effectiveness and measures of organizational reputation (Forbes, 1998; Bryan, 2019). It is striking that similar financial statistics, like revenue growth, are used as indicators for both capacity and effectiveness (Berrett, 2022; Chikoto & Neely, 2014; Provan, 1980), emphasizing the conceptual unclarity around the two terms (Liket & Maas, 2015). For the purposes of this article, we follow Bryan (2019) in the sense that capacity is the means to achieve effectiveness, that is, the extent to which an organization achieves its goals.…”

Section: Theory and Literature Reviewmentioning

confidence: 99%

Unrestricted funding and nonprofit capacities: Developing a conceptual model

Wiepking,

de Wit

2023

Nonprofit Mgmnt & Ldrshp

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Unrestricted or flexible funding practices are increasingly popular among funders. There is initial empirical support for the assumption that fewer donor‐imposed restrictions on funding have positive outcomes for nonprofit capacities, including the ability to better deal with external shocks such as presented by the COVID‐19 crisis. However, academic literature on the consequences of donor‐imposed restrictions is scarce, scattered, and lacks an overarching theoretical basis. In this article, we theorize how unrestricted funding may relate to nonprofit capacities and consequently effectiveness. Our theoretical propositions are derived from a review of the academic and gray literature as well as a theory‐based analysis of 20 in‐depth interviews with grantees receiving multi‐year unrestricted funding as a substantial part of their funding portfolio. We propose a conceptual model that hypothesizes how unrestricted funding may affect seven different nonprofit capacities: (1) financial management; (2) operational capacity; (3) staff management; (4) adaptive capacity; (5) strategic planning; (6) mission orientation; and (7) innovation. This framework can function as a much‐needed starting point to support academics and nonprofit leaders to better understand how unrestricted funding relates to nonprofit capabilities and consequently nonprofit effectiveness.

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Linking overhead expenses and nonprofit effectiveness: Evidence from Habitat for Humanity

Cited by 12 publications

References 45 publications

Nonprofit capacity and social performance: mapping the field and future directions

Nonprofit capacity and social performance: mapping the field and future directions

Nonprofit Boards in Pursuit of Innovation for Growth: Views From the Frontline

Unrestricted funding and nonprofit capacities: Developing a conceptual model

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