Skip to main content
SpringerLink
Log in

No Margin, No Mission: How Practitioners Justify Nonprofit Managerialization

  • Original Paper
  • Published:
VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations Aims and scope Submit manuscript

Abstract

The financial sustainability of nonprofit organizations is an abiding concern. One generally accepted solution for threats to nonprofit financial sustainability is the adoption of business practices such as commercial revenue. Institutional theory, joined by empirical evidence, suggests that nonprofit practitioners may (or may not) perceive a conflict between their social mission and business practices, which is a perquisite to developing a strategic response. Through a multi-site ethnography, I examine how nonprofit practitioners respond to pressures to enact business practices. The cognitive schema practitioners in this study use to justify that managerialization rationalizes business practices as means to achieving the mission. This schema explains why potential conflicts between business practices and the social mission went largely unnoticed and led, in large part, to passive acquiescence. The lack of perceived conflict captured in this study may be concerning because without conflict business practices may lead to unintended negative consequences such as mission drift.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

(Oliver 1991; Pache and Santos 2010; Voronov and Yorks 2015)

Fig. 2
Fig. 3

Similar content being viewed by others

References

  • Alexander, J., Nank, R., & Stivers, C. (1999). Implications of welfare reform: Do nonprofit survival strategies threaten civil society? Nonprofit and Voluntary Sector Quarterly, 28(4), 452–475.

    Google Scholar 

  • Anheier, H. K., Toepler, S., & Wojciech Sokolowski, S. (1997). The implications of government funding for non-profit organizations: Three propositions. International Journal of Public Sector Management, 10(3), 190–213.

    Google Scholar 

  • Backman, E. V., & Smith, S. R. (2000). Healthy organizations, unhealthy communities? Nonprofit Management and Leadership, 10(4), 355–373.

    Google Scholar 

  • Battilana, J., & Dorado, S. (2010). Building sustainable hybrid organizations: The case of commercial microfinance organizations. Academy of Management Journal, 53(6), 1419–1440.

    Google Scholar 

  • Battilana, J., & Lee, M. (2014). Advancing research on hybrid-organizing: Insights from the study of social enterprises. The Academy of Management Annals, 8(1), 397–441.

    Google Scholar 

  • Battilana, J., Lee, M., Walker, J., & Dorsey, C. (2012). In search of the hybrid ideal. Stanford Social Innovation Review, 10(3), 50–55.

    Google Scholar 

  • Battilana, J., Sengul, M., Pache, A.-C., & Model, J. (2015). Harnessing productive tensions in hybrid organizations: The case of work integration social enterprises. Academy of Management Journal, 58(6), 1658–1685.

    Google Scholar 

  • Beck, T. E., Lengnick-Hall, C. A., & Lengnick-Hall, M. L. (2008). Solutions out of context: Examining the transfer of business concepts to nonprofit organizations. Nonprofit Management & Leadership, 19(2), 153–171.

    Google Scholar 

  • Besharov, M., & Smith, W. (2014). Multiple logics in organizations: Explaining their varied nature and implications. Academy of Management Review, 39(3), 364–381.

    Google Scholar 

  • Binder, A. (2007). For love and money: Organizations’ creative responses to multiple environmental logics. Theory and Society, 36(6), 547–571.

    Google Scholar 

  • Bingham, T., & Walters, G. (2013). Financial sustainability within UK charities: Community sport trusts and corporate social responsibility partnerships. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 24(3), 606–629.

    Google Scholar 

  • Bryson, J. M., Gibbons, M. J., & Shaye, G. (2001). Enterprise schemes for nonprofit survival, growth, and effectiveness. Nonprofit Management and Leadership, 11(3), 271–288.

    Google Scholar 

  • Bush, R. (1992). Survival of the nonprofit spirit in a for-profit world. Nonprofit and Voluntary Sector Quarterly, 21(4), 391–410.

    Google Scholar 

  • Chell, E. (1998). Critical incident technique. In G. Symon & C. Cassel (Eds.), Qualitative methods in organizational research: A practical guide. Thousand Oaks: Sage.

    Google Scholar 

  • Cooney, K. (2006). The institutional and technical structuring of nonprofit ventures: Case study of a US hybrid organization caught between two fields. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 17(2), 137–155.

    Google Scholar 

  • Corbin, J., & Strauss, A. (2015). Basics of qualitative research: Techniques and procedures for developing grounded theory (4th ed.). Thousand Oaks: Sage.

    Google Scholar 

  • Dart, R. (2004). Being “business-like” in a nonprofit organization: A grounded and inductive typology. Nonprofit and Voluntary Sector Quarterly, 33(2), 290–310.

    Google Scholar 

  • DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.

    Google Scholar 

  • Ebrahim, A., Battilana, J., & Mair, J. (2014). The governance of social enterprises: Mission drift and accountability challenges in hybrid organizations. Research in Organizational Behavior, 34, 81–100.

    Google Scholar 

  • Eikenberry, A. M., & Kluver, J. D. (2004). The marketization of the nonprofit sector: Civil society at risk? Public Administration Review, 64(2), 132–140.

    Google Scholar 

  • Emerson, R. M., Fretz, R. I., & Shaw, L. L. (1995). Writing ethnographic field notes (2nd ed.). Chicago: The University of Chicago Press.

    Google Scholar 

  • Epperly, B., & Lee, T. (2015). Corruption and NGO sustainability: A panel study of post-communist states. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 26(1), 171–197.

    Google Scholar 

  • Fifka, M. S., Kühn, A.-L., Loza Adaui, C. R., & Stiglbauer, M. (2016). Promoting development in weak institutional environments: The understanding and transmission of sustainability by NGOS in Latin America. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 27(3), 1091–1122.

    Google Scholar 

  • Flanagan, J. C. (1954). The critical incident technique. Psychological Bulletin, 51(4), 327.

    Google Scholar 

  • Friedland, R., & Alford, R. R. (1991). Bringing society back in: Symbols, practices, and institutional contradictions. In W. W. Powell & P. J. DiMaggio (Eds.), The new institutionalism in organizational analysis (pp. 232–263). Chicago: University of Chicago Press.

    Google Scholar 

  • Geertz, C. (1994). Thick description: Toward an interpretive theory of culture. In M. Martin & L. C. McIntyre (Eds.), Readings in the philosophy of social science (pp. 213–231). Cambridge: MIT Press.

    Google Scholar 

  • Glynn, M. A., & Lounsbury, M. (2005). From the critics’ corner: Logic blending, discursive change and authenticity in a cultural production system. Journal of Management Studies, 42(5), 1031–1055.

    Google Scholar 

  • Golensky, M., & Mulder, C. A. (2006). Coping in a constrained economy. Administration in Social Work, 30(3), 5–24.

    Google Scholar 

  • Guo, B. (2006). Charity for profit? Exploring factors associated with the commercialization of human service nonprofits. Nonprofit and Voluntary Sector Quarterly, 35(1), 123–138.

    Google Scholar 

  • Hager, M., Galaskiewicz, J., Bielefeld, W., & Pins, J. (1996). Tales from the grave organizations’ accounts of their own demise. American Behavioral Scientist, 39(8), 975–994.

    Google Scholar 

  • Hallett, T., & Ventresca, M. J. (2006). Inhabited institutions: Social interactions and organizational forms in Gouldner’s patterns of industrial bureaucracy. Theory and Society, 35(2), 213–236.

    Google Scholar 

  • Hvenmark, J. (2013). Business as usual? On managerialization and the adoption of the balanced scorecard in a democratically governed civil society organization. Administrative Theory & Praxis, 35(2), 223–247.

    Google Scholar 

  • Hwang, H., & Powell, W. W. (2009). The rationalization of charity: The influences of professionalism in the nonprofit sector. Administrative Science Quarterly, 54(2), 268–298.

    Google Scholar 

  • Jäger, U., & Beyes, T. (2010). Strategizing in NPOs: A case study on the practice of organizational change between social mission and economic rationale. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 21(1), 82–100.

    Google Scholar 

  • Jay, J. (2013). Navigating paradox as a mechanism of change and innovation in hybrid organizations. Academy of Management Journal, 56(1), 137–159.

    Google Scholar 

  • Kerlin, J. A. (2010). A comparative analysis of the global emergence of social enterprise. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 21(2), 162–179.

    Google Scholar 

  • Kerlin, J. A., & Pollak, T. H. (2011). Nonprofit commercial revenue a replacement for declining government grants and private contributions? The American Review of Public Administration, 41(6), 686–704.

    Google Scholar 

  • King, D. (2016). Becoming business-like: Governing the nonprofit professional. Nonprofit and Voluntary Sector Quarterly, 46(2), 241–260.

    Google Scholar 

  • Kraatz, M. S., Ventresca, M. J., & Deng, L. (2010). Precarious values and mundane innovations: Enrollment management in American liberal arts colleges. Academy of Management Journal, 53(6), 1521–1545.

    Google Scholar 

  • Leiter, J. (2008). Nonprofit isomorphism: An Australia–United States comparison. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 19(1), 67–91.

    Google Scholar 

  • Leroux, K. M. (2005). What drives nonprofit entrepreneurship?: A look at budget trends of metro detroit social service agencies. The American Review of Public Administration, 35(4), 350–362.

    Google Scholar 

  • Levine, H., & Zahradnik, A. G. (2012). Online media, market orientation, and financial performance in nonprofits. Journal of Nonprofit & Public Sector Marketing, 24(1), 26–42.

    Google Scholar 

  • Maier, F., Meyer, M., & Steinbereithner, M. (2016). Nonprofit organizations becoming business-like a systematic review. Nonprofit and Voluntary Sector Quarterly, 45(1), 64–86.

    Google Scholar 

  • Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2), 340–363.

    Google Scholar 

  • Oliver, C. (1991). Strategic responses to institutional processes. Academy of Management Review, 16(1), 145–179.

    Google Scholar 

  • Pache, A.-C., & Santos, F. (2013). Inside the hybrid organization: Selective coupling as a response to competing institutional logics. Academy of Management Journal, 56(4), 972–1001.

    Google Scholar 

  • Pache, A.-C., & Santos, F. M. (2010). When worlds collide: The internal dynamics of organizational responses to conflicting institutional demands. Academy of Management Review, 35(3), 455–476.

    Google Scholar 

  • Powell, W. W., Gammal, D. L., & Simard, C. (2005). Close encounters: The circulation and reception of managerial practices in the San Francisco Bay Area nonprofit community. In B. Czarniawska & G. Sevón (Eds.), Global ideas: How ideas, objects and practices travel in a global economy. Frederiksberg: Copenhagen Business School Press.

    Google Scholar 

  • Roberts, S. M., Jones, J. P., & Fröhling, O. (2005). NGOs and the globalization of managerialism: A research framework. World Development, 33(11), 1845–1864.

    Google Scholar 

  • Rothschild-Whitt, J. (1979). The collectivist organization: An alternative to rational-bureaucratic models. American Sociological Review, 44(4), 509–527.

    Google Scholar 

  • Ruud, G. (2000). The symphony: Organizational discourse and the symbolic tensions between artistic and business ideologies. Journal of Applied Communication Research, 28(2), 117–143.

    Google Scholar 

  • Saldaña, J. (2016). The coding manual for qualitative researchers (3rd ed.). Thousand Oaks: Sage.

    Google Scholar 

  • Sanders, M. L. (2015). Being nonprofit-like in a market economy: Understanding the mission-market tension in nonprofit organizing. Nonprofit and Voluntary Sector Quarterly, 44(2), 205–222.

    Google Scholar 

  • Sanders, M. L., & McClellan, J. G. (2012). Being business-like while pursuing a social mission: Acknowledging the inherent tensions in US nonprofit organizing. Organization, 21(1), 68–89.

    Google Scholar 

  • Scott, W. R., Ruef, M., Mendel, P., & Caronna, C. (2000). Institutional change and healthcare organizations: From professional dominance to managed care. Chicago: University of Chicago Press.

    Google Scholar 

  • Selznick, P. (1949). TVA and the grassroots. A study in the sociology of formal organizations. Berkeley: University of California Publications.

    Google Scholar 

  • Sheppard, J. P. (1995). A resource dependence approach to organizational failure. Social Science Research, 24(1), 28–62.

    Google Scholar 

  • Skelcher, C., & Smith, S. R. (2015). Theorizing hybridity: Institutional logics, complex organizations, and actor identities: The case of nonprofits. Public Administration, 93(2), 433–448.

    Google Scholar 

  • Smith, W. K., & Besharov, M. L. (2019). Bowing before dual gods: How structured flexibility sustains organizational hybridity. Administrative Science Quarterly, 64(1), 1–44.

    Google Scholar 

  • Smith, W. K., Besharov, M. L., Wessels, A. K., & Chertok, M. (2012). A paradoxical leadership model for social entrepreneurs: Challenges, leadership skills, and pedagogical tools for managing social and commercial demands. Academy of Management Learning & Education, 11(3), 463–478.

    Google Scholar 

  • Smith, W. K., & Tracey, P. (2016). Institutional complexity and paradox theory: Complementarities of competing demands. Strategic Organization, 14(4), 455–466.

    Google Scholar 

  • Thornton, P. H., & Ocasio, W. (2008). Institutional logics. In R. Greenwood, R. Suddaby, & K. Sahlin (Eds.), The SAGE handbook of organizational institutionalism (pp. 99–129). Thousand Oaks: Sage.

    Google Scholar 

  • Thornton, P. H., Ocasio, W., & Lounsbury, M. (2012). The institutional logics perspective: A new approach to culture, structure, and process. Oxford: Oxford University Press.

    Google Scholar 

  • Toepler, S. (2006). Caveat venditor? Museum merchandising, nonprofit commercialization, and the case of the metropolitan museum in New York. Voluntas: International Journal of Voluntary & Nonprofit Organizations, 17(2), 95–113.

    Google Scholar 

  • Trost, J. E. (1986). Statistically nonrepresentative stratified sampling: A sampling technique for qualitative studies. Qualitative Sociology, 9(1), 54–57.

    Google Scholar 

  • Vaceková, G., Valentinov, V., & Nemec, J. (2017). Rethinking nonprofit commercialization: The case of the Czech Republic. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 28(5), 2103–2123.

    Google Scholar 

  • Valentinov, V., & Vaceková, G. (2015). Sustainability of rural nonprofit organizations: Czech Republic and Beyond. Sustainability, 7(8), 9890.

    Google Scholar 

  • Van Maanen, J. (2011). Tales of the field: On writing ethnography. Chicago: University of Chicago Press.

    Google Scholar 

  • Voronov, M., & Yorks, L. (2015). “Did you notice that?” Theorizing differences in the capacity to apprehend institutional contradictions. Academy of Management Review, 40(4), 563–586.

    Google Scholar 

  • Weber, M. (1978). Economy and society: An outline of interpretive sociology. Berkeley: University of California Press.

    Google Scholar 

  • Weerawardena, J., McDonald, R. E., & Mort, G. S. (2010). Sustainability of nonprofit organizations: An empirical investigation. Journal of World Business, 45(4), 346–356.

    Google Scholar 

  • Weisbrod, B. A. (1997). The future of the nonprofit sector: Its entwining with private enterprise and government. Journal of Policy Analysis and Management, 16(4), 541–555.

    Google Scholar 

  • Weisbrod, B. A. (1998). The nonprofit mission and its financing: Growing links between nonprofits and the rest of the economy. In B. A. Weisbrod (Ed.), To profit or not to profit: The commercial transformation of the nonprofit sector. Cambridge: Cambridge University Press.

    Google Scholar 

  • Wilson, R. (1998). Philanthropy in 18th-century Central Europe: Evangelical reform and commerce. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 9(1), 81–102.

    Google Scholar 

  • Witmer, H., & Mellinger, M. S. (2016). Organizational resilience: Nonprofit organizations’ response to change. Work, 54(2), 255–265.

    Google Scholar 

Download references

Acknowledgements

This paper was developed as a part of a doctoral dissertation with the support of several committee members that include Pacey Foster, Maureen Scully, Heather MacIndoe, and Rich DeJordy.

Funding

This study was funded by the University of Massachusetts Boston Dissertation grant.

Author information

Authors and Affiliations

  1. John Glenn College of Public Affairs, The Ohio State University, Columbus, OH, USA

    Erynn E. Beaton

Authors
  1. Erynn E. Beaton
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Erynn E. Beaton.

Ethics declarations

Conflict of interest

The author declares that they have no conflict of interest.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Beaton, E.E. No Margin, No Mission: How Practitioners Justify Nonprofit Managerialization. Voluntas 32, 695–708 (2021). https://doi.org/10.1007/s11266-019-00189-2

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11266-019-00189-2

Keywords

Search

Navigation