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Environmental constraints, governance patterns, and organizational responsiveness: A study of representation in nonprofit organizations

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Environmental constraints, governance patterns, and organizational responsiveness: A study of representation in nonprofit organizations

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Content ENVIRONMENTAL CONSTRAINTS, GOVERNANCE PATTERNS, AND
ORGANIZATIONAL RESPONSIVENESS:
A STUDY OF REPRESENTATION IN NONPROFIT ORGANIZATIONS
Copyright 2003
by
Chao Guo
A Dissertation Presented to the
FACULTY OF THE GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF PHILOSOPHY
(PUBLIC ADMINISTRATION)
August 2003
Chao Guo
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UMI Number: 3116707
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UNIVERSITY OF SOUTHERN CALIFORNIA
THE GRADUATE SCHOOL
UNIVERSITY PARK
LOS ANGELES, CALIFORNIA 90089-1695
This dissertation, written by
CHAO G {AO
under the direction o f h t S dissertation committee, and
approved by all its members, has been presented to and
accepted by the Director o f Graduate and Professional
Programs, in partial fulfillment o f the requirements for the
degree o f
DOCTOR OF PHILOSOPHY
Director
Date A u gu st 1 2 , 2003
Dissertation Committee
Chair
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ii
ACKNOWLEDGEMENTS
Eight years is a long time, and the moment finally comes when I look back
these years and recognize the names of those individuals important to my study and
life. First of all, words cannot express my sincere appreciation to Dr. Terry L.
Cooper, my dissertation Chair, and to Dr. Juliet A. Musso and Dr. Michael B.
Preston, my committee members, for their consistent guidance and constructive
advice. I owe an immense debt of gratitude especially to Terry and Juliet, my
mentors, for keeping me focused and challenged, and for providing timely support
and invaluable insights when I need them most.
I also would like to express my thanks and appreciation to Dr. Peter J.
Robertson, Dr. Rich A. Sundeen, Dr. Gary Painter, and Ms. June Muranaka. A
“virtual” committee member, Peter has been an inspiration to me, and has offered
important insights to the earlier drafts of my dissertation; Rich and Gary have not
only supervised my research and teaching apprenticeships respectively, but also
extended their help far beyond that. As the senior advisor for student services, June
has always been patient and willing to help even when I request for it in the last
minute.
Many other professors at the School of Policy, Planning, and Development
have played an important role in my scholarly development and helped me succeed
in my studies here at the University of Southern California: Dr. James Ferris, Dr.
Elizabeth Graddy, Dr. David Lopez-Lee, Dr. Robert Stallings, and Dr. Shui Yan
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iii
During my stay at the USC, I met with many student-colleagues whose
friendship I cherish: Dr. Muhittin Acar, Nobuyuki Ainoya, Dr. Xiaopeng Chen, Yue
Chen, Youngsoo Choi, Dr. Amy Doshi, Miao Fu, Dr. Yongliang Han, Tim Huerta,
Dr. Jill Humpries, Dr. Wei Liang, Otto Paredes, Dr. Rym Saidane, Jonathan Speier,
Fanghui Song, Ke Ye, Zhou Yu, Dr. Anthea (Yan) Zhang, Yuyong Zhang, Dr. Liu
Zheng, and Mei Zhou. I am especially thankful to Zhou, Ke, Wei, Liu, and Fanghui
for their valuable help at the final stage of my dissertation.
The survey and case research of my dissertation would not have been
possible without the help of people working with a variety of nonprofit organizations
in Los Angeles. I am particularly indebted to the help of the following individuals:
Betty Braxton, Charisse Bremond, Michele Spaurwe, Curtis Owens, Mildred
Simmonds, and Yussuf Simmonds. The in-depth communication with them through
interviews as well as many phone calls and email exchanges was key to my success.
I also want to thank my colleagues at the Arizona State University, from
whom I have received important support and encouragement during the past year
while teaching there. I am especially grateful to Dr. Ann Schneider, Dean of Public
Programs, Dr. Randy Virden, Chair of the Department of Recreation Management
and Tourism, and Dr. Robert Ashcraft, Director of the Center for Nonprofit
Leadership and Management, for their patience, understanding, and support. I am
also very thankful to Ms. Tara McBride and Ms. Brigette Zavala whose help made
my first-year teaching life much easier.
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iv
also very thankful to Ms. Tara McBride and Ms. Brigette Zavala whose help made
my first-year teaching life much easier.
Thanks also to my family and old friends for their emotional support
throughout this long and bumpy process: My parents, my brother Tao, my sister
Ying, my brother-in-law Hongwei, my sister-in-law Yuan, my nephew He, my
nieces Carolyne and Joanna; Weimo Pan, Jiafeng and Jun Yan, Jihong Wu, and Bayi
Le, among others. Jun, a soon-to-be-professor in statistics and my pal since college,
never hesitates to give his brotherly friendship, and never frowns down my request
for free consultation on statistical issues.
I save the last acknowledgement for my best friend, Charlotte Ren. Although
Charlotte and I have known each other for quite a while, it was not until the past few
years that we truly found each other again. She has lightened up my days with her
charming character, interesting ideas, and witty words. Time spent with her has been
my soul food during the many ups and downs of the final years of my dissertation.
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V
TABLE OF CONTENTS
Acknowledgements ii
List of Tables vii
List of Figures viii
Abstract ix
Chapter 1 Introduction 1
1.1 The story of organization ALPHA 2
1.2 Nonprofit organizations and American democracy 7
1.3 Representation in nonprofit organizations 17
1.4 Focusing on board of directors: democratic deficit in 23
nonprofit governance
1.5 Purpose of study 31
Chapter 2 Theoretical Framework 35
2.1 Overview of the theoretical framework 36
2.2 Governance patterns of nonprofit organizations 38
2.3 Environmental constraints and nonprofit governance 44
patterns
2.4 Nonprofit governance patterns and organizational 58
responsiveness to issues in the community
2.5 Summary of the chapter 78
Chapter 3 Research Design and Methodology 82
3.1 Overview of research design 82
3.2 Survey research 83
3.3 Case study 91
Chapter 4 Survey Findings 101
4.1 Data description 101
4.2 Multinomial logistic regression analysis 107
4.3 Discussion of the findings 112
4.4 Summary of the chapter 115
Chapter 5 Case Study Findings 117
5.1 The converging phase 118
5.2 The screening phase 127
5.3 Discussion of the findings 148
5.4 Summary of the chapter 151
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Chapter 6 Discussion and Conclusion 154
6.1 Discussion of the combined findings 156
6.2 Contributions to and implications for theory 159
6.3 Implications for policy 164
6.4 Implications for nonprofit governance and management 166
6.5 Limitations of the study 168
6.6 Suggestions for future research 170
Bibliography 174
Appendix 201
Nonprofit governance survey questionnaire 201
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LIST OF TABLES
3.1 Participants by title: taped interviews 94
3.2 Participants by title: un-taped interviews 94
4.1 Descriptive statistics 106
4.2 Results of multinomial logistic regression models of nonprofit 108
governance patterns
5.1 Summaries of the 1993 survey results 118
5.2 Issues reflected in ALPHA’S responses to funding 137
opportunities (1992-2001)
5.3 Focusing events (1992-2001) 139
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LIST OF FIGURES
2.1 The theoretical framework for the dissertation 37
2.2 Typology of governance patterns of nonprofit organizations 43
2.3 Environmental factors and nonprofit governance patterns 48
2.4 The attention-based view of nonprofit organizations: A two- 65
phase garbage can model
2.5 The theoretical framework for the dissertation (embellished) 80
4.1 Distribution of organizations by functional category 103
4.2 Distribution of organizations by governance patterns 105
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ABSTRACT
This dissertation investigates the issue of representation in nonprofit
organizations. Specifically, the purpose of the study is to examine how
environmental factors shape an organization’s governance pattern by compromising
its descriptive representation of community interests and how such compromise
affects its substantive representation of community interests.
In order to examine the above questions, a theoretical framework containing
the following major components is provided. The first component is a typology of
governance patterns of nonprofit organizations. The second component considers
the joint effects of resource dependence and institutional factors on nonprofit
governance patterns. The third one is an attention-based view of nonprofit
organizations based on which the effects of governance patterns and other contextual
variables on organizational responsiveness to issues in the community are examined.
The research methodology includes a mail survey and a case study. The
survey data is collected on four hundred randomly sampled nonprofit organizations
in Los Angeles. The findings show that governmental dependence tends to reduce
the levels of descriptive representation in nonprofit organizations through two
possible mechanisms - the funding dependence effect and the legitimizing effect;
and that these effects are counter-balanced by dependence on volunteer labor, which
tends to increase the levels of descriptive representation in nonprofit organizations.
The case study is conducted on a nonprofit human service organization in
Los Angeles. Findings from the case study suggest that the link between descriptive
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representation and substantial representation is contingent on a set of environmental
and contextual factors. The study has illustrated the contrasting effects of two types
of contextual factors - funding opportunities and “focusing events” - on
organizational responsiveness. While funding opportunities tend to reduce
organizational responsiveness through pre-defmed issues and pre-guaranteed funding
availability, “focusing events” might increase organizational responsiveness by
diminishing the advantages of funding agencies and organizational decision-makers
in framing issues in the community.
Overall, the study demonstrates the context-dependent nature of the
representative ability of nonprofit organizations, and highlights the importance of
understanding the conditions under which nonprofit organizations may be more
representative of community interests.
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CHAPTER 1
INTRODUCTION
The contribution of nonprofit organizations to American democracy has been
the subject of many scholarly articles and books in public administration; in recent
years, there has also been a surging interest among nonprofit scholars in the
governance of nonprofit organizations. This dissertation reflects one of the first
attempts to engage a dialogue between the two groups of literature through an
investigation into the democratic deficit in nonprofit governance; that is, the
compromise of community interest representation in the governance of nonprofit
organizations. Specifically, the purpose of the study is to examine how
environmental factors shape an organization’s governance pattern by compromising
its descriptive representation of community interests (i.e., community representation
on board and board-dominant governance) and how such compromise affects the
organization’s substantial representation of community interests (as reflected in its
selective response to issues in the community).
The organization of this dissertation is as follows. Chapter One provides an
introduction to the dissertation and discusses the purpose of the study. Chapter Two
provides the conceptual framework for the study. Chapter Three describes the
research design and methodology. Chapters Four and Five present the findings from
the survey and case study research undertaken for this dissertation, respectively. The
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final chapter of the study, Chapter Six, includes discussion of the conclusions drawn
from the study.
In Chapter One, I begin with a story of Organization ALPHA, a community-
based nonprofit organization in South Central Los Angeles, which serves as the
initial motivation for this study. I then review the existing literature on the
contribution of nonprofit organizations to the American democracy, emphasizing the
democratic role of nonprofit organizations at both institutional and organizational
levels. Focusing on the organizational level, I then explore the issue of interest
representation in nonprofit organizations and particularly the democratic deficit in
nonprofit governance. The fifth and final section of the chapter discusses the
purpose of the study.
1.1 The Story of Organization ALPHA
The year was 1990, about eighteen months before the famous Rodney King
trial that triggered the worst civil unrest in American history. The place was at the
heart of South Central Los Angeles, an area of “neglect” (Clinton, 1992; in Pear,
1992, p. Al) that has been plagued for years by a variety of social problems ranging
from permanent poverty and widespread unemployment to teenage pregnancy and
gang welfare. Several community activists gathered to discuss the possibility of
creating “an organization geared toward addressing the issues which face inner city
community residents every day” (ALPHA National Times, 1996). Later, a
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community-based nonprofit organization was established. To preserve anonymity
this organization is referred to as ALPHA.
Formerly owned by the Community United Presbyterian Church, the ALPHA
facility was vacated for over two years prior to its occupancy in 1991. A community
fund-raising organization, where the board chairman of ALPHA served as the long
term president, purchased this property for ALPHA in February 1991. As ALPHA’S
founding executive director once recalled, “the buildings were owned by pigeons” at
that time.1 With a small amount of starting-up money, four volunteers, one of them
being the founding executive director himself, began to clean up the buildings, paint
the walls, build the fences, as well as other dirty work. The center finally opened its
door on October 12,1991.
The community not only applauded ALPHA upon its founding, but also
demonstrated a rather high level of involvement in its activities during the early days
of ALPHA. A series of community meetings were held at ALPHA, where people
from the community were invited to voice their needs and concerns and to provide
advice and comments. Office spaces were provided for block clubs and other
community organizations. The founding executive director and his volunteer staff
used to walk down the street and pay door-to-door visits to residents in the
neighborhood. Moreover, residents were also encouraged to initiate and co-sponsor
neighborhood events with the organization; many volunteered for this organization.
Despite the efforts by the staff and volunteers and the support from the
community, the first six months since the founding of ALPHA proved to be
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extremely difficult. ALPHA managed to collect some small funding from private
donations and started to provide food distribution to the community and tutorial
services to the children. However, it was struggling for financial support to develop
more programs, and was yet to be well known by people in the community.
The civil unrest of 1992 and the earthquakes of 1994 highlighted the
community needs for ALPHA and expedited plans for the organization’s immediate
use for the community. The suddenly increased funding opportunities from both
public and private sectors after these incidents helped ALPHA survive its tenuous
beginning. Grabbing these momentums, ALPHA aggressively developed several
programs and services in response to increasing community needs in emergency
rescue and employment training. The success of these programs raised ALPHA’S
visibility in the community, and helped attract more grants from public and private
funding agencies. Within the next ten years, ALPHA had fed and clothed tens of
thousands of families, and trained thousands of residents into the working world. By
the end of the year 2000, ALPHA had quickly grown to become a multi-million
dollar government contractor with dozens of paid staff members and a power board,
offering a wide range of human service programs to the community.
As it kept on growing, however, ALPHA seemed to be retreating from the
community that it pledged to represent and serve. One indication of such a retreat
lies in its organizational development. The original design of ALPHA was to create
three components: the Community Forum (with a focus on community involvement
and advocacy), the Center for Growth and Human Development (with a focus on
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empowerment and knowledge through employment and training programs) and the
Center for Performing Arts (with a focus on creativity and expression through arts
programs). Along the years, ALPHA had made significant progress in developing
the Center for Growth and Human Development, but the effort to create the other
two components had been minimized. In other words, ALPHA had eventually
deviated from its original design of performing multiple functions in the community
and evolved into a social service provider.
Another sign of such a retreat is the change in the pattern of daily interactions
between the organization and the community. Community meeting was reduced to
an almost annual event, which usually happened before ALPHA’S annual celebration
- a festival-type of event that needs support from residents in the neighborhood.
Block clubs no longer had their offices at the Center. The succeeding executive
directors - in fact, even the founding director during the last few years of his tenure -
no longer took home visits to residents in the community. Last but not least, many
members of the ALPHA board of directors who used to live in South Central Los
Angeles later moved out of the community, but they still held their positions on the
board.
Such weakening of ALPHA’S link with the community was dramatically
demonstrated by a proposed community rally against ALPHA and then by an article
in a community newspaper. In January 2000, members of several block clubs and
other community activists stood up and questioned the legitimacy of ALPHA as a
representative of community interests, threatening to throw a community protest to
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stop the “ripping off of the community” by the ALPHA board and staff (Community
Rally Flyer, 2000). At the same year, in a comment essay published on a black
newspaper, Hutchinson (2002) challenged the legitimacy of ALPHA and a few other
black organizations to represent the interest of black community. He wrote,
There was no indication who these groups represent and what their
program is. The arrogance of a handful of amorphous groups
claiming to be the exclusive voice for blacks is the big reason many
blacks ask, “Where are the black leaders?” “What are they doing for
the community?” . . . Many of these leaders are mostly middle-class
business and professional persons. Their agenda and top down style
of leadership is remote, distant, and often wildly out of step with the
needs of poor and working class blacks, (p. 1)
During the period of 1999 to 2001, I had been offered the opportunity to
volunteer and work with this organization. From what I had observed and learned
about this organization, the story of ALPHA seems to have posed a dilemma for
nonprofit scholars and practitioners: On the one hand, this organization had a
mission to help the community, a committed board and devoted staff, a fast financial
growth, and a sound record of serving a huge number of participants and residents in
the community; on the other hand, the attitude of the community toward the
organization was eventually turned from one of trust, appreciation, and support to
one of distance and suspicion. This dilemma can be further elaborated by the
following questions:
♦ To what extent, if at all, does ALPHA represent the interests and concerns of
its constituents and the larger community?
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♦ To what extent does the fact that those organizational leaders are wealthy
business and professional people affect their ability to represent the needs of
poor and working class residents in the community?
♦ Is there a necessary tradeoff between providing social services and
representing the voices and concerns of the community?
These questions have motivated me to conduct this study. My belief is that
ALPHA is not unique in having the above dilemma; it is just a mirror of today’s
nonprofit world. Indeed, in recent years people are being bothered by scandals
associated with some nonprofit giants (Hancock, 1996), questioning the
accountability of many of them, and losing their faith in nonprofits as a whole
(Arenson, 1995; Gaul & Borowski, 1993). As commented by Weisbrod (1997),
nonprofit organizations are “increasingly being seen not as public-spirited
philanthropies but as self-serving entities that pursue the interests of their top
officials and board members” (p. 545). Given this situation, a study of interest
representation in nonprofit organizations is both important and timely.
1.2 Nonprofit Organizations and American Democracy
In the past few decades, the American people have witnessed the surge of
nonprofit organizations (Frumkin & Kim, 2001; Hodgkinson et al., 1996), the
increasing prominence of nonprofit organizations in the delivery of public services
(Zimmermann, 1994) and the increasing interdependence between government, the
principal financier, and nonprofit organizations, the major deliverer of the public
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services (Herman & Renz, 2000; Saidel, 1991; Saidel & Harlan, 1998). Labeled by
various scholars as third party government (Salamon, 1987), the shadow state
(Wolch, 1990), or the contracting regime (Smith & Lipsky, 1993), the resulting
pattern of activity between government and nonprofit organizations has important
implications for the practice of public administration today: As more and more
public services are provided, and more and more taxpayers’ money is consumed, by
nonprofit organizations, a growing number of public administrators are indeed
“nonprofit administrators” (Zimmermann, 1994, p. 398), and public administration
becomes governmental plus nonprofit management (Lane, 1980).
As nonprofit organizations increase their visibility in public administration,
there is a growing concern about their roles and functions other than service
delivery," particularly their role in democratic governance (Berger & Neuhaus, 1977;
Putnam, 1995, 1996; Smith & Lipsky, 1993). As early as the nineteenth century,
Alexis de Tocqueville (1956) posited a link between American democracy and
Americans’ high rates of joining voluntary associations in his study of Jacksonian
America. Tocqueville perceived the contribution of voluntary associations to
American democracy at two levels. At the organizational level, participation in
associations inculcates the habits of tolerance and civility, helps citizens to develop
skills of problem-solving and united action, and constitutes a primary educational
vehicle for citizen’s participation in democratic governance; in other words,
associations serve as schools for democracy (Tocqueville, 1956; see also Bucholtz,
1998). Tocqueville wrote,
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Feelings and opinions are recruited, the heart is enlarged, and the
human mind is developed, only by the reciprocal influence of men
upon each other. I have shown that these influences are almost null in
democratic countries; they must therefore be artificially created, and
this can only be accomplished by associations.. . . If men are to
remain civilized, or to become so, the art of associating together must
grow and improve in the same ratio in which the equality of
conditions is increased. (Tocqueville, 1956, pp. 200-202)
This organizational-level analysis has focused on the internal effects of voluntary
associations and is labeled by some contemporary scholars as “Civil Society I”
(Foley & Edwards, 1996; Newton, 1996).
Tocqueville’s institutional-level analysis of the democratic role of voluntary
associations was a subtle one: instead of a straight-forward answer, he saw the
existence of these organizations as a double-edged sword; that is, they are both
valued as a counterbalance of state and corporate power and cautioned as a potential
disruptive force. His arguments were organized along several dimensions. First,
Tocqueville acknowledged that voluntary associations represent the interests of
citizens and function as a buttress against public and private sector hegemony.1 1 1 He
wrote,
Amongst democratic nations,... all the citizens are independent and
feeble. They can do hardly anything by themselves, and none of them
can oblige his fellow-men to lend him their assistance. They all,
therefore, become power-less, if they do not learn voluntarily to help
each other. (Tocqueville, 1956, p. 199)
Secondly, Tocqueville cautioned us of the potential risks that these associations
might carry for democratic governance. He warned that associations could “form
something like a separate nation within the nation ... with all the moral prestige
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derived from the representation of their members” (Tocqueville, 1956, p. 190).
Thirdly, Tocqueville recognized the ways in which social and political conditions
structure associational life, and the responsibility for the democratic polity to foster
the growth of a rich associational life. This institutional-level analysis has focused
on the external effects of voluntary associations, and is labeled by contemporary
scholars as “Civil Society II” (Foley & Edwards, 1996; Newton, 1996).
While both organizational and institutional levels of analysis are important in
understanding Tocqueville’s view of the democratic role of associations, they have
been curiously divorced from each other by contemporary democratic theorists.
Since the middle of the twentieth century, Tocqueville’s institutional-level analysis,
or Civil Society II, has been echoed and developed by various American pluralist
theorists. The pluralist understanding of the democratic role of associations
emphasized their representational effects. Treating small groups as the basic units
within society, pluralist theorists viewed associations as a primary means through
which interests of citizens are represented to the state. Arguably the most dominant
version of pluralism is the so-called interest-group pluralism. Theorists of interest-
group pluralism focus their attention on political organizations that mobilize citizens
around particular social and political conflicts (i.e., parties and various interest
groups such as business groups, labor unions, and civil rights associations), and
maintain that democratic politics is determined by competition and bargaining
among interest groups that each is representing its own stakeholders or
constituencies (see Dahl, 1956; Truman, 1951). From this perspective, the
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democratic role of nonprofit organizations is limited to that of political
organizations.
A different version of pluralist thought on nonprofit organizations was
developed by Berger and Neuhaus (1977) in their landmark study, To Empower
People. Berger and Neuhaus argued that voluntary associations, along with families
and churches, function as mediating institutions which are essential to a democratic
way of life. In contrast to that of interest-group pluralists who focused narrowly on
political organizations, Berger and Neuhaus’ definition of voluntary associations
covers both political and nonpolitical organizations, and is close to what we call
nonprofit organizations today. To the authors, voluntary associations mediate
between individuals and “mega-structures” (i.e., government and large corporations)
by giving audible “voice” to individual concerns and, thereby, maintain the
legitimacy of a democratic regime (see Bucholtz, 1998, p. 577). Their “mediating
structures” theory added new fuel to the pluralist tradition through a call for “a
public policy designed to sustain pluralism through mediating structures” (Berger &
Neuhaus, 1977, p. 40). Berger and Neuhaus’ pluralist view is well reflected in their
proposal for an almost Laissez-faire policy toward nonprofit organizations,
[I]t is not the business of public policy to make value judgments
regarding the merits or demerits of various identity solutions, so long
as all groups abide by the minimal rules that make a pluralistic
society possible. It is the business of public policy not to undercut,
and indeed to enhance, the identity choices available to the American
people, (p. 41)
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Here, although Berger and Nauhaus did mention that government should play a role
in enhancing the associational life, they regarded this role as no more than
“protecting people’s identity choices” and “not interfering with their businesses”. It
is also worth noting that, in their analysis, the positive effects of voluntary
associations as a counter power to state have been stressed but their potentially
disruptive effects overlooked.
The above pluralist views that nonprofit organizations contribute to
democratic governance at the institutional level through their representational
function have been much challenged in the past several decades (Berry, 1994; Conn,
1973; Crotty, 1994). The pluralist claim that associations would give everyone
representation and voice has been discounted by some scholars as one of “the great
unfulfilled promises of pluralism” (Frumkin, 2001, p. 46). Indeed, the critics have
been centered on the issue of interest representation; that is, to what extent do
nonprofit organizations best represent the interests of their constituencies? It has
been widely documented that, in reality, nonprofit organizations often yield to the
famous “iron law of oligarchy” (Michels, 1962); they are led by local elites who are
rarely elected and who function with few mechanisms of representative
communication within their constituencies and the community at large (Bolduc,
1980; Cnaan, 1991). Obviously, the institutional-level analysis alone cannot explain
the above organizational phenomena, and thus is inadequate to justify the claim that
nonprofit organizations are a primary means through which interests of citizens are
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represented to the state; such pluralist view becomes problematic without the support
of an organizational-level analysis.
In contrast to the pluralist theorists, the other stream of research emphasized
the internal effects of nonprofit organizations on democratic governance, and
particularly the developmental effects of participation in nonprofit organizations on
citizens. On several grounds, scholars have argued that participation in nonprofit
organizations is central to democracy because it shapes political behavior and
attitudes (Almond & Verba, 1963), develops civic skills and democratic values
(Brady et al., 1995), and generates social capital (Putnam, 1993,1995).
Stimulated by Robert Putnam’s (1993) book, Making Democracy Work, and
further by his “bowling alone” article (1995), the social capital thesis has gained
much popularity in recent years. Putnam argued that participation in secondary
associations creates social capital in the form of dense networks of civic engagement,
norms of generalized reciprocity, and generalized trust, which in turn produce a
healthy democracy.lv His arguments have sparkled a debate among scholars on the
relationship between associations, social capital and democratic governance. In
response to Putnam’s uncritical endorsement of the role of social capital in
promoting democracy, scholars asked the following questions: Why associational
activities often produce “unsocial” instead of “social” capital? In other words, why
social capital created through associational activities is sometimes used for
undemocratic purposes (Berman, 1997, p. 566; see also Booth & Richard, 1998;
Levi, 1996; Whittington, 1998)? As illustrated by nineteenth-century churches and
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social clubs as well as by those violent and confrontational forms of associations
(e.g., the Ku Klux Klan and some of the militias in the United States), social capital
can be an antidemocratic force in the polity and potentially a disruptive one if it also
creates exclusion and confrontation problems.
The awareness of the “dark” side of social capital prompted some scholars to
empower the social capital thesis by distinguishing the democracy-promoting types
of social capital from others (Booth & Richard, 1998; Stolle & Rochon, 1998;
Warren, 2001). Stolle and Rochon (1998), for example, distinguished between
private social capital (i.e., trust, cooperation, and norms of reciprocity among fellow
members of a voluntary association) and public social capital (i.e., generalized trust,
tolerance, and cooperation toward citizens in general; also labeled as “public
civicness”).
Other scholars, following a tradition developed by Almond and Verba (1963)
in their seminal book, The Civic Culture, stressed the importance of participation in
nonprofit organizations to the development of citizens’ political behaviors and
attitudes. For instance, Booth and Richard (1998) singled out democratic norms and
civic engagement behaviors from the pool of social capital, and labeled these
attitudes and behaviors as “political capital”. They concluded that political rather
than social capital links associational activism to democracy. These efforts, along
with the efforts by other scholars in identifying “civil skills” (Brady et al., 1995),
have reflected a return to Tocqueville’s notion of “school of democracy” which has
been curiously missed in the social capital thesis. According to these scholars,
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associations are the schools of democracy in which citizens gain a sense of efficacy,
obtain relevant information, develop civic virtues, and learn political skills and
critical skills (see Warren, 2001, pp. 70-77).
Despite their contributions to the advancement of our understanding of the
developmental effects of participation in nonprofit organizations on individuals, the
existing organizational-level analyses seem to have evaded the question of
representation. The absence of a discussion on representation among the
organizational-level analyses is unfortunate, because it not only fails to provide a
response to the challenge left answered by the institutional-level analyses, but also
falls short of offering a better explanation of certain issues associated with the
developmental effects of participation in nonprofit organizations. For instance,
scholars have acknowledged that organizations vary in their relative capacity to
function as schools of democracy (Paxton, 2002; see also Gutmann, 1998; Warren,
2001). Recent studies have either examined or suggested the effects of various
internal characteristics of nonprofit organizations on the development of democracy-
promoting types of social capital or political capital, including membership
heterogeneity (Gutmann, 1998), organizational inclusiveness (i.e., whether the
interactions within the particular organizations bring one into contact with a broad
sampling of society; Stolle & Rochon, 1998); and organizational connectedness (i.e.,
whether the particular organizations are connected to, or isolated from, the larger
community; Paxton, 2002). These internal characteristics all seem to be indicators of
representation, suggesting the need to further study the possible relationship between
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the extent to which nonprofit organizations represent constituent interests and the
developmental effects of participation in these organizations on citizens.
Several lessons can be learned from the above discussions. First, both
institutional and organizational levels of analysis are important for the understanding
of the democratic role of nonprofit organizations. Second, the existing institutional-
level analyses, as represented by the interest-group pluralism and mediating-structure
theory, fall short of addressing the question of representation. Third, the existing
organization-level analyses have evaded the question of interest representation and
focused on the developmental effects of nonprofit organizations on citizens. Fourth,
the weakness of the existing theories might lie in the fact that they have relied on one
level of analysis while overlooking the other.
Drawing upon these lessons, I argue that we should combine both the
institutional and the organizational levels of analysis for a fuller understanding of the
democratic role of nonprofit organizations. As the first step, an organizational-level
analysis should be conducted to discuss the important issue of representation in
nonprofit organizations, which has been inadequately addressed by existing
discussions at both organizational and institutional levels.
In the following sections, I will focus on the organizational level and further
explore the issue of representation in nonprofit organizations.
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1.3 Representation in Nonprofit Organizations
Before we proceed, several important forms of representation need to be
clarified for the purpose of future discussion. Pitkin (1967) identified such different
forms of representation as formal representation, descriptive representation, and
substantive representation. Formal representation refers to representation in terms of
formal arrangements by which the representative is selected (e.g., through elections).
Descriptive representation refers to the level of similarity in socio-economic and
demographic background between leaders and the constituency. An organization is
descriptively or proportionally representative if its leadership has socio-economic
and demographic traits similar to those of the organization’s constituency.
Substantive representation is the level of similarity in perceived needs between
leaders and the constituency. An organization is substantively representative if the
needs that its leadership perceives are similar to those perceived by the
organization’s constituency.
Debate over representation has been a continuing part of the Western political
tradition (Peterson, 1970), and has created one of the central controversies in the
history of representative government. Regarded as the mandate-independence
controversy or the constituent-conscience dilemma, the question can be summarized
as “should (must) a representative do what his constituents want, and be bound by
mandates or instructions from them; or should (must) he be free to act as seems best
to him in pursuit of their welfare” (Pitkin, 1967, p. 145)? In other words, should
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the representative act according to his own judgment and conscience, or should he
faithfully follow the will of his constituents?
Traditional discussions of this controversy or dilemma often line up with two
contrasting theories of representation. The delegate theory, closely associated with
John Stuart Mill, sees the representative as an agent or delegate of his constituents,
and holds that the representative must, wherever possible, reflect the wants and
needs of constituents. On the other hand, the trustee theory, closely associated with
Edmund Burke, gives priorities to the values of elite competence and conscience,
and holds that the representative must act upon his or her own independent judgment
of the public good irrespective of the expressed wishes of constituents (for detailed
discussions of these contrasting theories of representation, see Pitkin, 1967 and
Bowie, 1981).
For Burke, the representative is chosen not for people but for their interests,
thus as long as their interest are represented, it does not matter whether it is done by
a representative chosen from the same geographical location. Burke does not believe
that the trustees (representatives) should be controlled by their constituencies;
instead, he believes that the trustees should use their own judgment to decide what is
in the interest of their constituencies (Pitkin, 1967). With a focus on substantive
representation and actual representation, Burke seems to discount the importance of
descriptive representation and formal representation: so long as the interests of a
district are protected by some member of Parliament, it is represented. If this is so,
what is the significance of election or similarity in background between a
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representative and his constituency? Although Burke never denies the right of the
voters to remove a representative, for him the voters are not to seek to control the
representatives through instructions, and they should be removed only for corruption
or lack of ability (Conniff, 1977). In the trustee theory, therefore, it seems that
formal representation serves as the one and only mechanism for popular control.
While John Stuart Mill also holds that the exercise of independent judgment
by representatives is reconciled with the requirements of popular control through the
medium of frequent, free elections, this medium for Mill is not a sufficient condition
of properly constituted popular government. Mill shares with Tocqueville in that, to
be free, a people must learn to participate on a direct and continuing basis. He calls
for a high degree of popular control over the conduct of representatives through
citizen participation, and justifies its value on both protective and educational
grounds. In terms of the protective criterion, Mill argues that human beings are safe
from evil at the hands of others only to the extent that they are self-protecting; and
they achieve a high degree of success in their struggle with nature only to the extent
that they are self-dependent. In terms of the educational criterion, Mill holds that
citizen participation helps to develop the political intelligence and public spirit of
citizens. Thus, local (participatory form of) democracy is for him the primary
instrument of popular political education (For a detailed discussion of John Stuart
Mill’s argument for citizen participation, see Krouse, 1982).
Extending the debate to the context of the nonprofit sector, the arguments of
trustee theory become less convincing. One important feature of nonprofit
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organizations that distinguishes them from governments is the lack of formal
representation. Although the selection of leadership (e.g., the board and chief
executive) by members through elections does exist in certain type of nonprofit
organizations (e.g., membership organizations), in most nonprofit organizations it
can be described as a self-perpetuating system; that is, leaders elect their own
replacements (Ferraro, 2000; Middleton, 1987; Widmer & Houchin, 2000). The
absence of elections as the one and only structural mechanism for the constituencies
to control their representatives, there is no way for them to hold nonprofit
organizations accountable.
More specifically, the trustee theory has difficulty in answering the following
questions: How would it affect the ability of nonprofit organizations to represent
constituent interests if certain segments of the population enjoy systematic privilege
in organizational participation at the expense of others (see Bickford, 1999, p. 89)?
How would it affect their representational role if these organizations coopt their
constituencies rather than represent their true needs (Cooper & Musso, 1999, pp.
206-207), or if they are “coopted by the government” (Berger & Neuhaus, 1977, p.
40) and become “agents of government” (Smith & Lipsky, 1993, p. 72)? Although it
is a common understanding that a nonprofit organization should “act in the best
interests of its constituency” (Ferraro, 2000, p. 46), and that the board should “ act
for the good of others” and “function as guardian or steward to safeguard the public
interest” (Axlrod, 1994, p. 120), it is not at all clear how this would be happening.
Indeed, what are the possible mechanisms through which nonprofit organizations can
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be held more responsible, representative, and responsive to the demands of those
whom they claim to be representing?
One possible mechanism seems to be inherent in the form of descriptive
representation. Although neither the trustee theory nor the delegate theory discusses
the role of descriptive representation in promoting substantive representation, some
nonprofit scholars and practitioners have suggested a link between the two forms of
representation. For instance, a board member of a nonprofit rural economic
development corporation has written:
True diversity means bringing unlikely perspective to the board table
so that they inform and enrich debate about the mission and action of
the organization. .. . [Through building boards of trustees that reflect
the diversity in the community,] board dialogue becomes a
conversation across communities and among stakeholders that
illuminates the organization’s mission and life in new ways.
(Dodson, 1992; as quoted in Widmer & Houchin, 2000: 130)
To what extent does such a link between descriptive and substantive forms of
representation exist in the context of nonprofit organizations? It is still a question
that is open to empirical test.
Another possible mechanism is suggested by the delegate theory. In the
context of nonprofit organizations, where formal representation - the selection of
leaders through the medium of frequent, free elections - is virtually absent,
constituent participation in the decision-making process offers stronger control over
the directions of these organizations. In light of the delegate theory, I would argue
that constituent participation on a direct and regular basis may benefit a nonprofit
organization through three functions: First, constituent participation performs an
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educational function, allowing those involved to develop a keener understanding of
the system, and facilitating the development of political and civic skills of ordinary
constituents. Second, and perhaps more importantly, constituent participation also
performs a protective function; that is, it engages constituents in an on-going public
dialogue within an organization through which matters of public concern can be
communicated and deliberated, and thus improves the control of the organization by
the community. Moreover, it helps to secure the link between descriptive
representation and substantive representation. This suggestion is comparable to the
argument that communication and deliberation lie at the core of descriptive
representation (Mansbridge, 1999). Without effective communication, descriptive
representation might still have its symbolic value, but its effect on substantive
representation seems to be questionable.
In sum, the following questions have been raised for the study: How well do
nonprofit organizations represent, both descriptively and substantially, the interests
of their constituencies? How are the two types of representation related to each
other? Does the variation in the level of descriptive representation have any effect
on an organization’s level of substantial representation? Does constituent
participation have any effect on the linkage between descriptive representation and
substantive representation?
To address these questions, I turn my focus on nonprofit board of directors.
Serving as the governing body of a nonprofit organization, performing bridging
functions through links to external constituencies and critical resources, and
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understood as part of both the organization and its environment (Middleton, 1987),
nonprofit board thus has provided an ideal arena where the organizational factors and
institutional factors meet, as we will discuss in the next section.
1.4 Focusing on Board of Directors: Democratic Deficit in Nonprofit
Governance
The past two decades have witnessed a resurgent interest in the issue of
governance (e.g., Alexander & Weiner, 1998; Ferlie at al., 1995; Hult & Walcott,
1990; Johnson et al., 1996; March & Olsen, 1995), and an emerging interest in the
governance of nonprofit organizations (Middleton, 1987; Ostrower & Stone, 2001;
Ott, 2001; Saidel & Harlan, 1998). There is a growing body of literature on
nonprofit boards that addresses their formal roles and responsibilities (e.g., Drucker,
1990; Harris, 1993; Ingram, 1988; Kramer, 1981; Widmer, 1993); different aspects
of board composition such as size, race/ethnicity, gender, demography, among others
(e.g., Abzug, 1996; Abzug et al., 1993; Bradshaw et al., 1996; Gittell & Covington,
1994; Kang & Cnaan, 1995; Middleton, 1987); board-staff relationship (e.g., Carver,
1997; Houle, 1989; Kramer, 1981; Murray et al., 1992; Wood, 1992); board
effectiveness (e.g., Bradshaw et al., 1992; Chait & Taylor, 1989; Green &
Greisinger, 1996; Herman & Renz, 1998); board evolution and group dynamics (e.g.,
Mathiasen, 1982; Middleton, 1987; Ostrowski, 1990); and board recruitment,
assessment, and renewal (e.g., Dayton, 1987; O’Connell, 1988).v
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Most of the scholarly work on nonprofit boards has applied an open-system
framework that stresses the ways in which organizations attempt to reduce external
constraints and adapt more effectively to their environment (Thompson, 1967).
According to the open-system framework, organizations are both influenced by
environmental constraints and capable of structurally adapting to environmental
changes through the establishment of boundary-spanning units. The importance of
board of directors as boundary spanners between organizations and their
environments has been convincingly argued by a number of researchers (e.g.,
Middleton, 1987; Miller & Weiss, 1988; Pfeffer, 1973; Provan, 1980; Selznick,
1949; Zald, 1969). According to these researchers, an organization links itself with
external environments through the incorporation of representatives of external
groups into the decision-making or advisory structure of the organization, and
particularly the board of directors (McMurtry et al., 1991; Scott, 1992). Selznick
(1949) first described the significance of this practice, known as the bridging
function or co-optation, in his classic study of the Tennessee Valley Authority,
examining how this federal agency gained leverage into a closed, tight-knit rural
community through co-optation. Since Selznick’s original study, many researchers
have studied such co-optative use of boards of directors. Performing bridging
functions through links to external constituencies and critical resources, boards can
thus be understood as part of both the organization and its environment (Middleton,
1987).
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As an emerging field of study, nonprofit governance has still been a relatively
isolated area of research, lacking connections to wider disciplinary and theoretical
concerns (Ostrower & Stone, 2001). Things, however, have started to change in the
past ten years, when a few scholars have begun to locate the study of nonprofit
governance within the larger context of American democracy (e.g., Austin &
Woolever, 1992; Smith & Lipsky, 1993; Zimmermann, 1994). The scholarly
attention has been particularly directed to the failure of the existing institutional-level
analyses to address the issue of representation. In his criticism of the interest-group
pluralism, Berry (1994) pointed out that the governance of interest groups deserves
greater attention from interest groups scholars. He further argued,
Governance questions are questions about representation. More
specifically, they are questions about how well people’s views are
represented within an organization, and how members’ views
correspond to what their lobbying organization communicates to
government, (p. 23)
His argument has been echoed by Crotty (1994), who also submitted that the issue of
representation has received little systematic empirical analysis by interest group
scholars.
In a similar vein, Austin and Woolever (1992) also challenged the “mediating
structures” theory for its inability to address the question of representation. As
argued by the authors, if nonprofit organizations perform mediating function
between citizens and the larger social institutions, then “the extent to which
voluntary organizations represent the actual populations of their constituent
geographic domains . . . in governance” should be of concern (p. 181). They further
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argued that “[if] participation in the organization is completely random, we would
expect the composition of membership and boards to reflect community population
characteristics” (p. 183).
To a less extent, scholars also related board of directors to the organizational-
level analysis of the developmental effects of nonprofit organizations on citizens.
Zimmermann, for instance, suggested that nonprofit organizations “might serve
better as training grounds for democracy” if their boards are “more truly
representative” of the community (Zimmermann, 1994, p. 401).
The importance of nonprofit boards in the understanding of the democratic
role of nonprofit organizations has been highlighted in Smith and Lipsky’s (1993)
seminal book, Nonprofit for Hire. Smith and Lipsky emphasized the community and
democratic role that nonprofit organizations play in addition to their service
functions. They argued that nonprofit organizations are “tangible, significant
manifestations of community” and pathways to citizen participation (p. 22), and that
“[boards] of directors, more than any other aspect of nonprofit organizations,
embody and represent community interests” (p. 74). At a time when government
contracting becomes the dominant strategy for public service delivery, they have
raised their concern over “the potential tension between governing nonprofit
organizations as agents of community and operating them as agents of government”
(p. 72). They further argued that “[this] tension is expressed in different ways,
including changes in the composition of boards of directors, changes in the
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qualifications and recruitment of executive officers, and changes in the relations
between boards and executive officers” (pp. 72-73).
In this dissertation, I attempt to follow the steps of these scholars and
continue to engage a dialogue between nonprofit governance and the democratic role
of nonprofit organizations. The presumption of this study is that, if nonprofit
organizations are to represent the interests of their constituencies, certain democratic
elements should be reflected in their organizational structure and process. This
presumption is consistent with the argument made by several scholars that structures
of (representative) democracy should be established within an organization “so that
the goals, purposes, and norms of members are represented by those who speak on
their behalf’ (Warren, 2001, p. 84; see also Rosenblum, 1998). Based on this
presumption, I attempt to examine the extent to which nonprofit organizations
develop certain mechanisms of organizational control that retain equality and control
of decision making by their constituents and the larger community. Of particular
concern is the issue of governance; that is, to what extent these organizations are
governed in a manner that allows representatives of their constituents and the larger
community to get truly involved in organizational decision making.
Although scholars have presented a variety of definitions of nonprofit
governance (see Ott, 2001 for a discussion o f the different definitions), it usually
involves a volunteer board of directors and a chief executive (or broadly, the senior
management) sharing roles of responsibilities associated with the board and the
organization (Ferraro, 2000; Inglis et al., 1999). In a substantial study of governance
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in public organizations, Hult and Walcott (1990) argued that governance is
concerned with critical issues, such as decisions regarding organizational mission,
major activities, the right to participate in decision-making, and general relations
with the external environment. Governance structures, according to Hult and
Walcott, shape “participation rights” by specifying, “who is entitled or required to
participate, how the participants may interact, and what constitutes a decision” (p. 9).
The specification of who participates in organizational decision making is reflected
in the composition of the board; the specification of how the participants interact
indicates the power distribution among the participants. In a similar vein, Murray
(1998) also identified two dominant issues in nonprofit governance. One issue is
who plays, or should play, which roles in the process, or, in practical terms, who is in
charge of the organization and to whom is it accountable? The other issue is how
governance decisions are, or should be, made.
A review of the prescriptive research on nonprofit boards demonstrates that
democratic elements have been instilled into the design of nonprofit governance
along the two important dimensions identified by these scholars mentioned above.
One dimension is board composition, reflecting who is entitled or required to
participate in the governing process. The other dimension is board-executive
relationship, referring to the power distribution of an organization. In terms of board
composition, boards of directors “represent the voices of society” (Herzlinger &
Krasker, 1987, p. 104; see also Jackson & Holland, 1998). Board members are the
persons in whom power is entrusted by the community to act as fiduciaries. In terms
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of power distribution, boards of directors stand at the top of the hierarchy of
authority and at the center of leadership responsibility in nonprofit organizations, and
guide their organizations with caring, skill, and integrity (Axelrod, 1994; Carver,
1997; Jackson & Holland, 1998). Such centrality of boards in the organizational
hierarchy is based on both a legal requirement and a moral assumption (Herman &
Heimovics, 1991; Herman, Renz, & Heimovics, 1997). In the United States, the law
ultimately holds the board of directors responsible for the affairs and conduct of a
nonprofit organization. The moral assumption is that the board will conduct the
affairs of a nonprofit organization as a public steward and will ensure that the
organization serves the interests of its constituents and the larger community.
Despite the emphasis on the importance of these democratic elements of
nonprofit boards associated with their legal and moral responsibilities in the
prescriptive literature, the reality often seems to tell a story of democratic deficit in
nonprofit govemance;y l that is, the compromise on representation of community
interests in nonprofit governance. In terms of board composition, many nonprofit
boards are charged with not being broadly representative of the public, that is, the
tendency to be limited to upper-income, professional employers and managerial
persons, while the community has little or no representation (Verba & Nie, 1972;
Widmer, 1985, 1989). In terms of board power over chief executive, many nonprofit
boards have been noted for their “rubber stamp” function and the prevalence of what
have been termed “minority rule”. Functioning according to the “iron law of
oligarchy”, in which decision-making power is concentrated in a small number of
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non-elected board members and an executive staff, the governance of many
nonprofit organizations seems to be drifting away from the embodiment and
representation of community interests (Cnaan, 1991; Kramer, 1981).
The issue of democratic deficit in nonprofit governance poses important
challenges for the organizational-level analysis of interest representation in nonprofit
organizations. If nonprofit boards fail to include representatives of their constituents
and the larger community in their governance structure, if they fail to perform as real
governing bodies to direct the actions and safeguard the missions of their
organizations, and if these democratic elements are absent in the governance of
nonprofit organizations, then it is only logical to ask the following questions: Are
nonprofit organizations actually functioning on behalf of their constituents and the
larger community? How can they make contributions to a democratic society if they
are in a democratic deficit themselves?
In response to these questions, this dissertation highlights the “context-
sensitive” nature of nonprofit organizations as a vehicle for promoting American
democracy (Clark, 2000); that is, “their abilities to encourage development of civic
skills, creation of social capital, and formation of distinctive relations between
citizen and state will be contingent on other local factors and their own internal
capacities” (p. 212). Taking this as its point of departure, this dissertation attempts
to explore why and how nonprofit organizations vary in their levels of democratic
deficit in governance. Specifically, the dissertation examines two important themes
arising from the democratic deficit in nonprofit governance:
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(1) The theme of descriptive representation. Why are some nonprofit
organizations able to develop certain governance patterns that contain higher levels
of descriptive representation of community interests (i.e., community representation
on board and board-dominant governance) than others? What are the environmental
and contextual factors that lead to the variation in governance patterns of nonprofit
organizations?
(2) The theme of substantive representation. Why are some nonprofit
organizations more responsive to the interests of their constituencies than others?
Does the variation in governance patterns have any effect on the way nonprofit
organizations respond to questions and issues initiated by their constituencies and the
larger community? What roles do constituent participation and other contextual
factors play in determining the responsiveness of nonprofit organizations to
community interest?
Lack of knowledge about these two related themes may have seriously
undermined a proper understanding of nonprofit organizations’ role in American
democracy.
1.5 Purpose of Study
This dissertation research reflects one of the first attempts to engage a
dialogue between nonprofit boards and the democratic role of nonprofit
organizations through an investigation into the democratic deficit in nonprofit
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governance; that is, the compromise of community interest representation in the
governance of nonprofit organizations.
In this study, I attempt to examine the two themes that were presented at the
end of the previous section, respectively. In terms of the theme of descriptive
representation, I propose that the variation in governance patterns of nonprofit
boards can be understood within a larger context of how organizations manage their
interdependence with external environment, particularly resource environment and
institutional environment. The resource dependence theory (Pfeffer & Salancik,
1978) provides a particularly useful perspective to explore the factors of resource
environment that lead to the variation in nonprofit governance patterns. The resource
dependence theorists hold that organizations attempt to coopt sources of
environmental uncertainty and constraint by establishing linkages with certain
elements in the environment that generate uncertainty and constraint for them. Their
findings suggest that higher dependence on and greater uncertainty associated with
external resources lead to certain changes in organizations’ governance structure.
The other theoretical perspective, the institutionalism, emphasizes the role of
normative pressures in an organization’s quest for survival (Meyer & Rowan, 1977;
Perrow, 1986; Selznick, 1949; Zucker, 1988) and contends that organizations
respond to institutional constraints and control through compliance to environmental
demands. The review of institutionalist literature also informs our current study
because it defines the room in which organizations are able to respond strategically
to external environment. Altogether, the two perspectives foreshadow the ways in
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which organizational adaptation to external environment has the capacity to shape an
organization’s governance pattern by compromising its descriptive representation of
community interests.
In terms of the theme of substantive representation, I propose that nonprofit
organizations’ responsiveness to community interests can be explored from an
attention-based view of nonprofit organizations. Holding the assumption that
organizational decision-makers are limited in their time and capacities for attention
(March, 1994), this perspective stresses the importance of organizational attention
structure in directing the allocation focus of organizational decision makers (March
& Olsen, 1976; Ocasio, 1997). Following this line of logic, the variation in nonprofit
governance patterns, along with constituent participation and other contextual factors
such as “funding opportunities” and “focusing events”, may jointly change the
configuration of their organizational attention structure, and therefore affect their
organizational choice of which issues in the community should be addressed.
Therefore, the purpose of this study is threefold. First, this study attempts to
combine the two theoretical perspectives of resource dependence and institutionalism
to reach an integrative conceptual framework for the study of the variation in
nonprofit governance patterns. Specifically, this study examines the joint effects of
resource dependence (i.e., funding and volunteer dependence) and institutional
constraints on the board composition and board power over chief executive. Second,
through the introduction of an attention-based view of nonprofit organizations, this
study then discusses how the variation in governance patterns, constituent
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participation and other contextual factors affect the responsiveness of nonprofit
organizations to community needs and interests. Third, this study further discusses
the possibilities of overcoming the barriers to representation in nonprofit
organizations or minimizing their negative impacts.
' The founding executive director made this comment during an informal conversation with author in
1999.
I I O’Connell (1994), for example, categorized the roles o f nonprofit organizations into service,
advocacy, and empowerment. In a subsequent study, O ’Connell went on to argue that service is
secondary to the functions o f advocacy and empowerment (O ’Connell, 1996). Various scholars also
explored the expressive dimension o f nonprofit organizations, arguing that the core function o f
nonprofit organizations is to “produce important expressive outputs that provide satisfaction to the
individuals donating funds, managing programs, and volunteering their time” (Frumkin & Andre-
Clark, 2000, p. 159;see also Frumkin, 2002; Mason, 1996).
I I I Here Tocqueville’s view parallels that o f Madison, who argued in The Federalist Papers that groups
function to connect individuals to government and to resist when governmental powers become
tyrannical (see Warren, 2001, p. 83).
I V In Putnam’s studies, political organizations are excluded from the realm o f Civil Society I.
Moreover, the so-called “tertiary” associations - those “mailing list organizations” (e.g., the American
Association o f Retired People and the Sierra Club, etc.) and most prominent nonprofits (e.g., Harvard
University, the Metropolitan Opera, etc.) - are also excluded due to the fact that these organizations
fail to provide the social connectedness and face-to-face contact that is believed to be crucial to
building social capital.
v For two comprehensive reviews on nonprofit governance literature, please refer to Middleton (1987)
and Ostrower and Stone (2001).
v l The phrase “democratic deficit” refers to the fact that an organization or institution has no direct
responsibility to its constituents and is dominated by experts and bureaucrats answerable to no
democratically elected body (Quadrant, 2000). It is frequently used in recently years in the discussion
o f international governmental organizations such as United Nations and European Union, non
governmental organizations, and government agencies (Boyce, 1993; see also Bogdanor, 1994; Ferlie
et al., 1995; McLaughin, 1992; Nye, 2001; Quadrant, 2000). I borrow this term to describe the similar
situation in nonprofit organizations.
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CHAPTER 2
THEORETICAL FRAMEWORK
Chapter Two provides the theoretical framework for the dissertation, which
enables us to examine two important themes arising from democratic deficit in
nonprofit governance: (1) descriptive representation of community interests; and (2)
substantive representation of community interests. In terms of the former theme, I
contend that governmental dependence reduces the levels of descriptive
representation in nonprofit organizations through two possible mechanisms - the
funding dependence effect and the legitimizing effect; and that these effects are
counter-balanced by organizational dependence on volunteer labor. In terms of the
latter theme, I contend that there is a conditional link between descriptive
representation and substantive representation; and that constituent participation has a
positive effect on substantive representation in nonprofit organizations.
The chapter is organized as follows. I begin with a brief overview of the
theoretical framework. In the rest of the chapter, I then give detailed discussions for
each of the three major components of the theoretical framework. Specifically, the
second section provides a typology of nonprofit governance patterns along the two
dimensions of board composition and board power relative to chief executive. The
third section considers the joint effects of resource dependence and institutional
factors on the governance patterns of nonprofit organizations. The fourth section
discusses the effects of governance patterns and other contextual factors on the
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36
responsiveness of nonprofit organizations to issues in the community through the
introduction of an attention-based view.
2.1 Overview of the Theoretical Framework
This chapter will provide the theoretical framework for the study of
representation in nonprofit organizations. Specifically, it will discuss how
environmental factors affect nonprofit organizations’ descriptive representation of
community interests by shaping the patterns of their governance structure, and affect
their substantive representation of community interests by determining how
nonprofit organizations respond to different issues in the community; it will also
discuss the effect of nonprofit organizations’ descriptive representation (as indicated
by the variation in governance patterns) on their substantive representation (as
indicated by their selective responsiveness to issues in the community) (see Figure
2 .1).
Accordingly, this theoretical framework includes three major components.
The first component provides a typology of nonprofit governance patterns along the
two dimensions of board composition and board power relative to chief executive.
The second component considers the joint effects of resource dependence and
institutional factors on the governance patterns of nonprofit organizations. The third
component is an attention-based view of nonprofit organizations through which the
joint effects of nonprofit governance patterns and “policy windows” (i.e., funding
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Environmental
Factors
Figure 2.1 The Theoretical Framework for the Dissertation
Descriptive
Substantive
Representation of
Representation of
Community Interests
------------------- ►
Community Interests
(Governance Patterns of
(Organizational
Nonprofit Organizations)
Responsiveness to Issues
in the Community)
..............................................................• r — — -
U )
38
opportunities and focusing events) on the responsiveness of nonprofit organizations
to issues in the community are discussed.
In the following three sections, I will introduce each of the three components
respectively.
2.2 Governance Patterns of Nonprofit Organizations
In recent years, a growing number of scholars have directed their attention to
the divergence of the actual behavioral patterns of nonprofit boards from the
prescriptive models. Despite their prescriptive value, both the hierarchical authority
model (Carver, 1997; Houle, 1989), which places the nonprofit board of directors on
top of the organizational hierarchy and understands it as the legally constituted
leadership body and the guardian of organizational mission, and the partnership
model (Drucker, 1990b), which advocates an “equal partnership” between board and
executive who concentrate on different tasks, become problematic in practice
(Golensky, 1993; Herman & Heimovics, 1990; Murray et al., 1992). For example,
scholars have reported that nonprofit boards are often featured by their “director
apathy” (Siciliano & Spiro, 1992, p. 69; see also Baughman, 1987); that effective
governance by nonprofit boards is “a rare and unnatural act” (Taylor et al., 1999, p.
54); and that many nonprofit boards are viewed as largely irrelevant in government
contracting systems (Fink, 1989; Gronbjerg, 1993; Young & Sultz, 1995).
Such divergence has stimulated recent research on the actual patterns of
nonprofit governance structure (for reviews of relevant literature, see Middleton,
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39
1987; Ostrower & Stone, 2001). In line with Ostrower and Stone’s argument that
nonprofit boards are “complex entities that defy sweeping generalizations” and that
“there is no ‘one size fits all’ model of boards” (p. 2), empirical studies on nonprofit
governance patterns have provided extensive evidence that governance structure
varies within different contexts and across time (Harris, 1994; Kramer, 1981, 1985;
Murray, 1998; Murray et al, 1992; Saidel & Harlan, 1998; Wood, 1992).
Although there is no consensus among scholars on which criteria should be
chosen in developing typologies of nonprofit governance patterns, the majority of
them have developed their typologies along one of the two important board
dimensions that we discussed in Chapter One: (1) Who participates in organizational
decision-making, as reflected in board composition; and (2) Who has the power in
organizational decision-making, as reflected in board-executive relationship. Some
typologies of nonprofit governance patterns reflect a focus on the first dimension
(e.g., Barnett et al., 2001; Weiner & Alexander, 1993). Weiner and Alexander, for
example, identified two models of nonprofit governance: the “philanthropic”,
volunteer board model traditionally associated with hospitals, and the “corporate”
board model typically found in the commercial sector. The former is based largely
on volunteer, part-time community representation, while the latter includes a number
of the community’s corporate, professional, and social elite (see also Barnett et al.,
2001 for a detailed discussion).
Other typologies of nonprofit governance patterns have mostly focused on
the second dimension (Kramer, 1981; Murray et al., 1992; Murray, 1998; Saidel &
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40
Harlan, 1998). Kramer (1981), for example, identified four patterns that include
highly concentrated power by either the CEO or board president as well as dispersed
power within board or CEO leadership: (1) CEO-dominated board, (2) chair-
dominated board, (3) power-sharing board, and (4) powerless board. More recently,
Murray, Bradshaw, and Wolpin (1992) developed Kramer’s typology by combining
power concentration-dispersion and degree of consensus on issues. Their typology
resulted in five different patterns of board governance: (1) CEO-dominated board,
(2) chair-dominated board, (3) fragmented power board, (4) power-sharing board,
and (5) powerless board. In a similar vein, Murray (1998) later identified four
governance patterns that are commonly observed in nonprofit organizations: (1) the
“CEO-dominant” pattern, (2) the “board-dominant pattern”, (3) the “staff-dominant”
pattern, and (4) the “collective governance” pattern.
It should be noted that there exist some typologies of nonprofit governance
patterns that have been constructed along dimensions other than board composition
and power distribution. Harris (1994), for example, attempted to distinguish three
models of governance according to the way in which the roles of board and staff may
be interlinked with each other and with their agency’s guardians and service-
consumers: the traditional model, where the board represents the guardians of the
agency and employ the staff to deliver services to consumers or beneficiaries of the
agency; the membership model, where the beneficiaries are the guardians
themselves, who entrust the board to appoint staff to deliver a service; and the
entrepreneur model, where the staff employed by the board are entrepreneurs who
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41
have a vision of the agency. Another example is Wood’s (1992) cyclical model of
board behavior, which explains the nonprofit governance patterns according to stages
in the board’s life cycle. Wood’s model holds that the roles, responsibilities, and
power of board and staff follow an evolutionary cycle. After a nonrecurring
founding period, a board typically progresses through a sequence of three distinct
operating phases and then experiences a crisis that initiates the whole sequence over
again. During each cycle, board members become progressively less interested in
the agency’s mission and programs and more interested in bureaucratic procedures
associated with governance.
Even in the above two cases, the importance of the two dimensions of board
composition and power distribution is either demonstrated or implied. While
Wood’s (1992) model focuses on the evolution of board roles and responsibilities in
its life cycle, it also describes the shifting patterns of dominance between executive
directors and boards more generally. Harris’ (1994) model is also in the direction of
embracing the two dimensions when it explores the interactions between the key
participants - board and staff - and between the key participants and the guardians
and service-consumers of an organization.
Based on the review of the literature on nonprofit governance patterns, I
submit that a typology of nonprofit governance patterns can be developed upon the
combination of the above two dimensions of nonprofit governance structure. In
terms of board composition, a board may either consist of more community
representatives (i.e., staff, clients, volunteers, community residents, etc.), or consist
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42
of more corporate, professional and social elite - the so-called “power board”
(Herman & Tulipana, 1985, p. 48); in terms of power distribution, a board may either
be a strong one that dominates chief executive or staff, or a weak one that is
dominated by them. For the purpose of this study, I therefore roughly categorize the
governance structure of nonprofit organizations into four patterns (see Figure 2.2):
(1) Strong, community board (i.e., community representation on board plus strong
board power over chief executive or staff); (2) Strong, non-community board (i.e.,
elite representation on board plus strong board power over chief executive or staff);
(3) Weak, community board (community representation on board plus weak board
power over chief executive or staff); and (4) Weak, non-community board (elite
representation on board plus weak board power over chief executive or staff).
This typology has its strength and its weakness. The strength of this typology
lies in the fact that it combines two key dimensions of nonprofit governance: board
representation and power distribution between board and chief executive, both of
which are important indicators of the democratic deficit in nonprofit governance.
The weakness of this typology is also obvious: although the above-mentioned two
dimensions constitute the core of governance structure, they do not cover all the
relevant variables. Without considering such variables as power concentration-
dispersion or degree of consensus on issues, this typology runs the risk of losing the
subtleties in and around the board.
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Figure 2.2 Typology of Governance Patterns of Nonprofit Organizations
o 9 J
s s i
3 °
• ■ S o
g ( L >
O Q )
a - 5
o
CL
C O
o
C D
Decision S tructure
(C om m unity R ep resen tatio n on Board)
No Y es
< ►
Strong, Non-Community
Board
Strong, Community
Board
Weak, Non-Community
Board
Weak, Community
Board
44
2.3 Environmental Constraints and Nonprofit Governance Patterns
In this section, I explore the factors that lead to the variation in nonprofit
governance patterns. Following Ostrower and Stone’s (2001) suggestion that “both
internal and external contingencies and contextual variables must be explicated in the
studies of [nonprofit] governance” (p. 3), I focus my attention on the role of two
important factors of external environment, namely dependence factors and
institutional factors, in shaping the patterns of nonprofit governance.
2.3.1 Multiple Constituencies and “Crowding-out” Effect
Consistent with the open-system framework, resource dependence theory
(Pfeffer & Salancik, 1978) provides a useful perspective for the study of nonprofit
governance. Resource dependence theory holds the idea that organizations attempt
to co-opt sources of environmental constraint and uncertainty by establishing
linkages with certain elements in the environment that generate constraint and
uncertainty for them. According to this theory, organizations manage external
dependencies and uncertainties by placing representatives of important
“stakeholders” or “constituencies” on their boards.
Serving a multitude of key stakeholders or constituencies from its task
environment, a nonprofit organization often confronts incompatible and competing
demands from these multiple constituencies. As Pfeffer and Salancik (1978) pointed
out, organizations are “coalitions of interests that face an environment of competing,
frequently conflicting, demands and that need resources from that environment” (p.
xii), and some actors are more powerful than others in the exertion of demands.
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45
With limited capability of including the representatives of all the constituencies in its
governance, an organization is likely to give priority to those more powerful
constituencies. Yet this may create a “crowding-out” effect that leads to the under
representation of some important, but less powerful constituencies.
Despite their explanatory power, resource dependence theory has recently
been criticized for their ignorance of the role of institutional environment.
Institutional theory submits that legitimacy, not efficiency, is critical to the survival
of an organization, that the survival of the organization depends on its conformity
with prevailing norms, practices, and beliefs of multiple constituencies, and that the
organization seeks to maintain legitimacy in the eyes of important institutional
stakeholders (Meyer & Rowan, 1977; Meyer & Scott, 1983). According to
institutional theory, including representatives of all the important stakeholders on
board of directors is a visible way of demonstrating an organization’s commitment to
those stakeholders; in this case, board functions as a legitimating mechanism rather
than a bridging or co-optative device, and its composition reflects the spectrum of an
organization’s multiple constituencies.
In this study, I argue that the above two theoretical perspectives are
complementary, and can thus be combined to reach a richer understanding of the
governance patterns of nonprofit organizations. As will be discussed further in the
following sub-section, I propose that the degree of the above-mentioned “crowding-
out” effect is jointly determined by resource dependence and institutional factors of
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46
an organization’s external environment, and in turn shapes the governance pattern of
this organization.
2.3.2 Combining Resource Dependence and Institutional Perspectives
In recent years, scholars have called for research that combines resource
dependence and institutional theories for a better understanding of organization’s
adaptive behavior. Hambrick and Finkelstein (1987) were probably the first to
suggest the complementarity of resource dependence and institutional models when
they argued that organizational environments vary in the amount of discretion they
afford managers. In some industries, mangers have considerable discretion while in
others, the constraints posed by external forces such as government regulators are so
powerful that managers have little flexibility to deviate from prescribed actions.
Hambrick and Finkelstein’s argument was echoed by other scholars (DiMaggio,
1988; Goodstein, 1994; Oliver, 1991). DiMaggio, for instance, recommended that
institutional and political models should be regarded as complementary tools for
understanding institutional phenomena.
Along this line, Bielefeld (1992a) made an effort in combining resource
dependence and institutional theories in his study of the relationships between
funding heterogeneity and structure and functioning of nonprofit organizations. His
findings showed that, for nonprofits that are less vulnerable to institutional factors of
their environments, funding heterogeneity has a positive effect on boundary
spanning, consistent with resource dependence theory. For nonprofits that are more
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47
vulnerable to institutional factors, funding heterogeneity has a positive effect on
modeling and participation in collective efforts, consistent with institutional theory.
The efforts by scholars to combine these perspectives shed new light on the
understanding of organization’s adaptive behavior. They suggest that each of the two
theories has some predictive power, but neither of them can provide a satisfactory
explanation by itself; therefore, it will be more useful for us to understand them as
complementary and include them in one framework. Extending this argument to the
study of nonprofit governance, I argue that nonprofit governance pattern is jointly
influenced by two distinct groups of environmental constraints, namely dependence
and institutional factors (see Figure 2.3).
The Dependence Factors
Theorists from the resource dependence perspective treat the environment as
a source of scarce resources that are sought after by a population of organizations
that competes for as well as shares them (Pfeffer & Salancik, 1978). As a
consequence of the competition for scarce resources, one organization develops
dependencies on others in its environment.
Thompson (1967) has noted that “[a]n organization is dependent upon some
elements of its task environment 1) in proportion to the organization’s need for
resources or performances which that element can provide, and 2) in inverse
proportion to the ability of other elements to provide the same resource or
performance” (p. 31). In other words, to the extent that an organization is in need of
resources provided by that element, and that it is unable to obtain them elsewhere, it
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Figure 2.3
Dependence Factors
* Funding Dependence
* Volunteer D ependence
Institutional Factors
* Legal Influences
* Industry Differences
* Organizational Influences
Environmental Factors and Nonprofit Governance Patterns
Governance Patterns
Strong, Non-
Community Board
Strong, Community
Board
W eak, Non-
Community Board
W eak, Community
Board
49
becomes dependent on that element. Thompson’s definition makes it clear that the
degree of dependence experienced by an organization is determined by the
importance and concentration of resources provided (Thompson, 1967; see also
Aldrich & Mindlin, 1978). Organizations that rely on a few sources for vital inputs
become highly dependent on those providers for survival.
Within nonprofit sector context, two types of resources are probably of most
importance to the survival of nonprofit organizations: financial capital and volunteer
labor. Financial capital is crucial to the survival of nonprofit organizations, not only
because it constitutes a convertible resource that organizations can use to obtain most
other types of necessary resources, but also due to the fact that nonprofit
organizations usually rely on a greater variety of funding sources than do other types
of organizations (i.e., businesses and government agencies), and that they have less
ability to directly control the continued availability of their funding (Gronbjerg,
1991). Volunteer labor is another highly valued resource to nonprofit organizations.
As an alternative to paid labor, volunteers produce services worth $ 113 billion to
$161 billion annually (Brown, 1999), the majority of which go to the nonprofit
sector.
Next, I will discuss the implications of dependence on government funding -
an increasingly important funding source for nonprofit organizations - and
dependence on volunteer labor for nonprofit governance, respectively.
(1) Dependence on Government Funding. As nonprofit organizations
usually rely on a variety of funding sources, government funding in particular has
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50
gained increasing importance in recent decades (Gronbjerg, 1993; Saidel & Harlan,
1998). As early as the mid-1970s, the Commission on Private Philanthropy and
Public Needs (the Filer Commission) remarked that government had become “the
major philanthropist in a number of the principal, traditional areas of philanthropy”
(Commission on Private Philanthropy and Public Needs, 1975; quoted in Salamon,
1999, p. 63). Twenty years later, the picture today is even sharper than ever: At the
turn of the millennium, government funding accounted for about thirty-five percent
of nonprofit revenue, only next to payments for program services (40 percent) and
much higher than private gifts and grants (20 percent). Considering the fact that
program service revenue includes direct and indirect government payments, such as
those from Medicare and Medicaid, the proportion of government funding in
nonprofit revenue is even higher (O’Neill, 2002, p. 19).
Board appointments offer a simple and flexible mechanism particularly for
nonprofit organizations to access and influence public funding agencies. That is,
although legal barriers preclude certain types of interlocking directorates among for-
profit organizations, nonprofit organizations are not subject to such constraints
(Miller et al., 1994). Therefore, it is not surprising to see nonprofit organizations use
their boards as co-optive devices in the quest for government funding (e.g.,
Gronbjerg, 1993; Kramer & Grossman, 1987). For instance, in a study of Chicago-
area social service and community development organizations, Gronbjerg (1993)
reported that about half of the studied organizations had either sought or were
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51
planning to seek board members who had affiliations with public agencies in order to
obtain government funding.
Dependence on government funding has serious implications for the variation
in an organization’s community representation on board. The adoption of co
optation strategy of the organization in response to government funding dependence
leads to the increase in the number of corporate, professional and social elite - who
are more likely to have linkages with public funding agencies as well as expertise in
grant writing - on its board. By filling more representatives of public funding
agencies in the limited number of slots of its board, however, an organization
virtually “crowds out” the chances of including other constituencies who also have a
stake in this organization but have relatively less power. These powerless
constituencies might include staff, volunteers, clients who do not pay for the services
that they receive, and community residents whose lives are impacted by the activities
of the organization. As a result, the efforts to attracting government funding through
co-optive board appointments might discourage organizations to develop a high
degree of community representation on their boards.
Dependence on government funding might also shift power within the
organization away from the board and toward the executive director, for several
reasons. First, government funding changes the scale of an organization through
expanding its existing services or adding new services, thus making it much more
difficult for the board to monitor organizational activities. Second, government
funding substantially increases overhead costs and administrative demands, thus
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52
leading to a more powerful executive office. Third, government contracts involve an
organization in regulation-writing, the legislative process, and government budgeting
cycles with which most nonprofit board members are unfamiliar, thus resulting in an
information gap between the board and staff which favors the staff. Fourth, program
goals or priorities have usually been determined outside the organization, thus
minimizing the board’s role in program planning and development (Smith & Lipsky,
1993, pp. 88-91).
Hypothesis la:
Other things being equal, the more dependent an organization is on
government funding, the more likely it is to develop a strong, non
community board rather than a strong, community board.
(2) Dependence on Volunteer Labor. Voluntary action has played an
important role in American society throughout the history (Sundeen, 1990), and is
“the driving force” of the nonprofit sector (Van Til, 1999, p. 2350). According to a
study by the Independent Sector, almost 56 percent of Americans, or an estimated
109.4 million adults, reported volunteering in 1998 (Saxon-Harrold et al., 2001).
While volunteers are used in all these sectors, the nonprofit sector remains the prime
beneficiary. In 1994, volunteer time provided 36 percent of total employment to the
nonprofit sector but represented only 9 percent of total employment in government
and a negligible percentage in business (Hodgkinson et al., 1996: 13).'
For organizations that are heavily dependent on their volunteers to carry out
programs and activities, the sufficient and stable supply of volunteers becomes
critical. Accordingly, a primary task for these organizations is to motivate the
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53
participation of volunteers (Harrison, 1995). The task of volunteer motivation,
however, is made difficult by the absence of bureaucratic or monetary incentives
within the volunteer labor context (Pearce, 1982). Therefore, organizations must
attract volunteers through a variety of solidarity rewards (e.g., social activities such
as potluck dinners, dances, and community celebrations, etc.) and purposive rewards
(e.g., opportunities for input into community development plans and forums for
political candidates, etc.) as the primary benefits of participation (Oropesa, 1995, p.
238).
Including representatives of volunteers in its board of directors becomes a
feasible strategy for a nonprofit organization to manage its volunteer dependency for
several reasons: In the eyes of volunteers, board appointments are probably the
highest level of purposive rewards that an organization can offer. From the view of
an organization, board appointments establish certain linkages with volunteers,
which may help to sustain existing volunteers and attract potential volunteers. Thus,
I expect that to the extent that an organization is dependent on volunteer labor, it is
likely to include more representatives of volunteers in its board.
An organization that depends on volunteers to carry out its programs and
activities is also likely to demonstrate the power of volunteers in the organization.
Lipsky and Smith observed that when an organization depends upon volunteers for
labor, volunteers have a certain power in the organizations (1989). Moreover, in
some organizations where leaders are elected by their volunteers, these volunteers
“act more like constituents than subordinates” (Pearce, 1982, p. 392) and thus are
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54
more powerful than those in other organizations. I expect the power of volunteers in
an organization to be reflected in the power distribution between board and staff.
Hypothesis lb:
Other things being equal, the more dependent an organization is on
volunteer labor, the more likely it is to develop a strong, community
board rather than other governance patterns.
The Institutional Factors
Institutional theory emphasizes the causal influence of state, societal, and
cultural pressures on organizational behavior, and the effects of history, rules, and
consensual understanding on organizational conformity to environmental constraints
(Oliver, 1991). Conforming to constraints posed by the institutional environment,
organizations tend to map into their own structures the complexity of institutional
environments they face (DiMaggio & Powell, 1983; Meyer & Scott, 1983;
Thompson, 1967).
According to institutional theory, the board of directors serves as a
legitimating device that links an organization to important stakeholders of its
institutional environment. When such formal mechanisms are in place, the
importance of these stakeholders with the organization is acknowledged (Mitchell et
al., 1997, p. 876), and the commitment of the organization to these stakeholders is
signalized in a visible way (Hillman et al., 2001, p. 300). The board of directors thus
performs an important function regarding the reputation of an organization (Selznick,
1957; Mizruchi, 1996). By appointing individuals with ties to its institutional
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55
constituencies, the organization signals to those constituencies that it is a legitimate
organization worthy of support.
In terms of community-based nonprofit organizations, the issue of legitimacy
refers to “the extent to which an organization justly and properly speaks for and acts
on behalf of the neighborhood it takes as its constituency” (Chaskin & Peters, 2000,
p. 16). The involvement of a diversity of stakeholders in its board is believed to be
an important factor in promoting the legitimacy of a nonprofit organization. Abzug
and Galaskiewicz (2001), for instance, argued that nonprofit organizations are
legitimate if they represent “the interests or identities of different constituencies in
the community”, and that one way to gain legitimacy is to “have constituencies
dominate boards” (p. 52). As a legitimating device, the substantial function of the
board becomes less important than its symbolic value; that is, whether or not the
board engages in active management or policymaking in an organization, its
existence and structure shows the institutional constituencies that the organization is
indeed conforming to their expectation.
Luoma and Goodstein (1999) have made important insight into our
understanding of institutional influences on an organization’s board structure and
function. Specifically, they examined the effect of legal requirements, industry
regulation, and organizational size on the addition of stakeholders to boards of
directors. Being aware that all these factors would affect nonprofit governance
patterns, for the purpose of this study I only focus on the impact of institutional
factors at the societal level (the law) and the industry level (industry regulation).
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56
(1) Legal influences. The law is an important societal, institutional influence
on organizations (Edelman, 1990, 1992; Selznick, 1992; Suchman & Edelman,
1997). From an institutional perspective, the law is not only a set of coercive formal
requirements with specific incentives and penalties (e.g., Oliver, 1991), but also a
“broad cultural framework that influences organizations both mimetically and
normatively” (Suchman & Edelman, 1997, p. 920). Within this cultural framework,
organizations react to legal mandates and regulations by offering culturally
meaningful signals of legitimacy.
An organization is less likely to resist institutional pressures that constrain
organizations’ action when the organization is heavily dependent on the source of
these pressures (Oliver, 1991). Government is not only the largest funder for many
nonprofit organizations, but also the most important institutional actor with its laws
and legal mandates. From the mid 1960s, the era of the Great Society programs, to
the late 1970s, a great many federally sponsored organizations were created whose
hallmark was decentralized decision making combined with mandated participation
of representatives from the areas affected. Such programs included community
action agencies, model cities programs, community mental health programs, area
agencies for the aged, and health systems agencies (see Peterson, 1970; Piven and
Cloward, 1971). Therefore, I expect that an organization’s dependence on
government funding have a positive impact on community representation on board,
but a negative impact on board power over chief executive.
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57
Hypothesis 2a-l:
Other things being equal, the more dependent an organization is on
government funding, the more likely it is to develop a weak,
community board rather than a strong, community board.
The above impact, however, may be moderated by a recent trend in those
nonprofit organizations that depend on government funding: professionalism.
DeHoog (1985) stated that
A key factor in contracting decision-making and reviews has been a
preference for professionalism - as evidenced by contractor proposals,
reputations, and relationships with officials. It can be surmised that
sometimes common professional training, language, goals, methods,
and biases serve as a substitute for assessing the actual needs of
clients and the actual outcomes of suppliers’ services, (p. 449)
To gain its legitimacy in the eyes of government agencies and win contracts from
them, a nonprofit organization may have to meet their expectation by emphasizing
practices such as cost accounting, the employment of certified professionals, and the
prevalence of complicated information-processing technologies (Meyer & Rowan,
1977; Rowan, 1982). The development of such a culture of professionalism may
have no effect on productivity or efficiency, but it serves to signal to other
organizations and the public that the organization is rational and legitimate (Fennell
& Alexander, 1987; Perrow, 1986; Pfeffer, 1981).
Therefore, I expect that the trend of professionalism might lead to the
inclusion of more professionals in the boards of those organizations that rely on
government funding; these trends might also lead to less power of boards over chief
executives in these organizations.
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58
Hypothesis 2a-2:
Other things being equal, the more dependent an organization is on
government funding, the more likely it is to develop a weak, non
community board rather than a strong, community board!1
(2) Industry differences. The important societal effects of the legal and
normative environment are reinforced at the industry level of institutional influence.
These effects may be particularly important for organizations operating within highly
regulated industries, which have a context that reinforces accountability to public
concerns (Pfeffer & Salancik, 1978) and heightens the importance of maintaining
legitimacy in their eyes of the public and the government (Miles, 1987; Oliver, 1991;
Scott, 1995). In the nonprofit sector context, institutional effects are particularly
salient for health and human nonprofits because they emphasize the role of
normative pressures in an organization’s quest for survival (Perrow, 1986; Zucker,
1987). Therefore, I expect that being health and human nonprofits have a positive
impact on community representation on board, but a negative impact on board power
over chief executive.
Hypothesis 2b:
Other things being equal, health and human nonprofits are more
likely to develop a weak, community board rather than a strong,
community board.
2.4 Nonprofit Governance Patterns and Organizational Responsiveness to
Issues in the Community
In the previous section, I argued that descriptive representation of community
interests, as reflected in governance patterns of nonprofit organizations, is
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59
determined by organizational interdependence with external environment,
particularly their resource environment and institutional environment. Specifically, I
argued that higher level of descriptive representation, embodied by a strong,
community board, is more likely to be found in those organizations with higher
dependence on volunteers, and less likely to be found in those with higher
dependence on government funding and those operating in health and human
industries. To the extent that organizations with higher levels of descriptive
representation will be more responsive to local needs, there would appear to be a
strong linkage between environmental factors (e.g., dependence on government
funding, dependence on volunteers, legal influences, etc.) and substantive
representation of community interests in nonprofit organizations. I now turn to the
second theme, examining the effects of governance patterns, along with other
contextual factors, on the responsiveness of nonprofit organizations to the interests
of their constituents and the larger community.
The section is organized as follows. I begin with a brief review of the
existing literature on the relationship between descriptive representation and
substantive representation in general, and between nonprofit governance patterns and
organizational responsiveness to community issues in particular. Then, with an
introduction of an attention-based view of nonprofit organizations and an emphasis
on the role of organizational attention structure in directing the allocation of
organizational decision makers’ focus, I examine how governance patterns interact
with other contextual variables such as “policy windows” (i.e., funding opportunities
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and “focusing events”) in determining the selective response of nonprofit
organizations to different issues in the community.
2.4.1 Translating Descriptive into Substantive: The Context-Dependent
Nature of Representation
The linkage between descriptive representation and substantive
representation has been a hotly debated issue in the study of American democracy.
Focused primarily on gender (e.g., Child, 2001; Norris, 1996) and racial differences
(e.g., Meier & England, 1984; Preston, 1978; Swain, 1993) in legislative behavior
and public policy outputs, prior research has demonstrated a great divergence among
scholars about whether descriptive representation can be translated into substantive
representation. On the one hand, proponents of such a direct transformation hold the
assumption that “people’s characteristics are a guide to the actions they will take”
(Pitkin, 1967, p. 89). There is considerable evidence to support this assumption
(e.g., Mandel & Dobson, 1992; Rosenthal, 1995; Thomas, 1994). On the other hand,
opponents find this assumption “untenable” (Kymlicka, 1995, p. 139), as “[h]aving
such a relation of identity or similarity with constituents says nothing about what the
representative does” (Young, 1997; as quoted in Mansbridge, 1999, p. 630). This
opposing view has also been supported by some empirical studies (e.g., Donahue,
1999; Tremblay & Pelletier, 2000).
In addition to these polarized views about the possible linkage between
descriptive and substantive representation, findings from some studies seem to
suggest a context-dependent nature of representation. Mansbridge (1999), for
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example, argued that although descriptive representation might enhance substantive
representation in contexts of group mistrust and uncrystallized interests, it might
promote goods unrelated to substantive representation in other contexts such as
historical political subordination and low de facto legitimacy. Bratton and Ray
(2002), in a study of female representation and the provision of child care, found that
the relationship between descriptive and substantive representation varies over time,
and that a translation of the former into the latter is greatest during periods of policy
innovation.
In a similar vein, a limited number of existing studies about representation in
nonprofit organizations have also revealed a rather complicated relationship between
descriptive and substantive representation. Although some scholars have suggested a
positive link between the two types of representation by arguing that “[m]ore . . .
responsiveness from our nonprofits might well result from boards that are not only
more active but . . . more truly representative” (Zimmermann, 1994. p. 401),
empirical studies have provided mixed support to this opinion. Findings from a few
studies have shown that descriptive representation does make a difference in
promoting substantive representation (e.g., Gittell & Covington, 1998; Siciliano,
1996; Tourginy & Miller, 1981). Tourginy and Miller, for example, in a study of
community-based organizations, found that organizations with higher community
representation on their boards were more effective in developing policies that
reflected needs and concerns of the community. In contrast, other scholars have
found that leaders differ from members/residents in their identification and
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assessment of needs in the community, with leaders significantly disagree with
residents on 40 percent of the issues (Regab et al., 1981), and that, after a few years
in office, leaders became more interested in citywide issues than those of the
neighborhood (Blum & Regab, 1985).
The context-dependent nature of representation is similarly suggested in the
existing studies of nonprofit organizations. Crenson (1978), in a comparative case
study of six neighborhoods and their community organizations, found that the issues
on the agendas of community organizations corresponded only roughly to the
subjects that troubled their constituents, and that organizational agendas reflected
constituent sentiment more accurately in some neighborhoods than others. Cooper
(1980) found that the pressure of bureaucratic perspectives and role demands shifted
the focus of a community organization from the needs of community residents to
those of a technically oriented group of professionals, and thus eventually moved it
away from representing the perceived needs of many residents.
In recent years, an increasing number of scholars have devoted to the study of
substantive representation in nonprofit organizations. Berry, Portney, and Thomson
(1993) pioneered their efforts in examining the responsiveness of the neighborhood
associations to policy preferences of their constituents. Consistent with Berry,
Portnerr, and Thomson’s work, Swindell (2000) examined the representativeness of
an organization in terms of the issues it choose to address vis-a-vis the issues of most
importance to neighborhood residents. Swindell also examined various
environmental factors (e.g., neighborhood population, ethnic heterogeneity, threats
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facing a neighborhood, etc.) and organizational characteristics (e.g., organizational
size, neighborhood participation, revenues, etc.) on a neighborhood association’s
ability to represent important issues in the community.
The above review of the literature has shown that our understanding of
whether and how descriptive representation can be translated into substantive
representation is still quite limited, which is particularly true in the study of
representation in nonprofit organizations. This limitation is partly due to the
following two reasons: First, most existing studies of representation in nonprofit
organizations only discussed the issue of board composition and did not consider that
of power distribution. Although community representation on board might still have
its symbolic value even when board has no decision-making power over executive, it
is suspicious whether such representation can actually have an impact on an
organization’s responsiveness to community interests of its constituents.
Second, most empirical studies reflected an attempt to build a direct
demography-performance link, leaving in the “black box” the processes or
mechanisms through which nonprofit governance affects an organization’s
substantive representation of community interests. As Pettigrew (1992) has observed
in many studies of boards, “Great inferential leaps are made from input variables
such as board composition to output variables such as board performance with no
direct evidence on the processes and mechanisms which presumably link the inputs
to the outputs” (p. 171). Similarly, Murray (1998) has also argued that “[t]he
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possibility of improving [nonprofit] governance depends on acquiring a better
understanding of the actual processes and the factors that influence them” (p. 996).
2.4.2 An Attention-Based View of Nonprofit Organizations
As a response to the above limitations of the existing literature, I will look
into the actual process of nonprofit governance and study how patterns of nonprofit
governance interact with other contextual variables in affecting organizational
responsiveness to issues in the community. Taking a garbage can decision making
perspective (Cohen et al., 1972; Kingdon, 1984) and drawing upon a two-phase
garbage can decision making model developed in my previous works (Guo, 2000,
2002), I submit that, in nonprofit organizations, four streams of problems, solutions,
participants, and choice opportunities develop decisions in a two-phase process (see
Figure 2.4).U 1
First, there is the converging phase. This phase refers to the period during
which no “policy window” (choice opportunity) is open, and all kinds of
participants, problems and solutions come in and go out of the organization but no
major choices are made. Carrying with them different problems and solutions,
participants flow into organizational settings during this period, and exchange ideas
and concerns. Through communication some issues are echoed, some are coupled
with others, still others are overlooked; as a result of the on-going communication, a
complex network of issues is developed (Langley et al., 1995). Therefore,
communication is central to the development of issue network in this phase. To the
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Figure 2.4 The Attention-Based View of Nonprofit Organizations: A Two-Phase Garbage Can Model
■ Nonprofit Governance Patterns i
S tro n g , Non-
C o m m u n ity B oard
S trong, C o m m u n ity
Board
W e a k , Non-
C o m m u n ity B oard
W e a k , C o m m u n ity
Board
Stream of Participants
Stream of Problem s
Stream of Solutions
Issu e Network ----------
(co m b in atio n s of p ro b le m s
solutions a n d p ro b le m s)
A ►
O rganizational
Attention S tru c tu re
* P la y er
* R e s o u r c e
* S tructural Position
* R u le s of G a m e
-► O rganizational
R e s p o n s iv e n e s s
To th e C om m unity
O pening of "Policy W in d o w s”
(funding o p portunities a n d focusing e v e n ts )
Converging Phase Screening Phase
O n
66
extent that communication channels are established and opened to all the constituents
(especially to those who have stake in the organization but are relatively powerless),
communication and deliberation among participants may help to develop a network
of issues that best reflect the needs and concerns of the community.
Once a “policy window” (or several “policy windows”) is open, the streams,
now a complex network of issues, would flow into the second phase - the screening
phase. Organizational decision-makers, guided by their attention structures, screen
some issues into a choice opportunity and screen out others. In this phase, the effects
of various contextual variables on the decision making process become obvious,
sometimes even dominant.
In the rest of the section, I will focus on the screening phase of the garbage
can model, and discuss how two groups of contextual variables - governance
patterns and “policy windows” - jointly affect the attention structure of a nonprofit
organization, and in turn determine its selective response to different issues in the
community.
2.4.3 Organizational Attention Structure and Organizational Responsiveness
Organizational decision-makers, limited in their time and capacities for
attention, concentrate their energy and effort on some issues while ignoring others
(March, 1994). The allocation of attentional focus of decision-makers is governed
by their attention structures (March & Olsen, 1976). According to Ocasio (1997),
attention structures refer to “the social, economic, and cultural structures that govern
the allocation of time, effort, and attentional focus of organizational decision makers
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in their decision-making activities” (p. 195). Ocasio went on to identify four
categories of organizational attention structure - rules of the game, players, structural
positions, and resources.
Rules of the game
Rules of the game are “the formal and informal principles of action,
interaction, and interpretation that guide and constrain decision makers in
accomplishing the organization’s tasks and in obtaining social status, credits, and
rewards in the process” (Ocasio, 1997, p. 196). These principles are “collective
human constructions that reflect the organization’s history and the history of its
environment” (Ocasio, 1997, p. 196; see also Selznick, 1957).
Ocasio (1999) argued that decision makers rely on rules in making major
decisions; that is, decision makers are guided in their decisions "by both historical
precedents and formal rules that are not easily modified as . . . actions become
institutionalized and norms of appropriate beliefs and behavior become established"
(p. 384). A primary source for the generation of rules is the organization’ s historical
experience (Selznick, 1957). Framing an issue in terms of historical organizational
precedents facilitates action by providing decision makers with readily available
solutions for organizational problems. When an organization repeats a specific
previous action over time it develops routines and competencies that then become
independent engines for further actions (Levitt & March, 1988; see also Burgelman,
1983).
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Players
Players are structurally autonomous social actors, which regulate the decision
and activities of decision makers through their influence, power and control (Ocasio,
1997).1 V The most critical players in attention regulation are typically the chief
executive and the top management group (Hambrick & Mason, 1984; Hambrick,
1994), but other actors and groups both internal and external to the organization,
such as active board members, consultants, representatives of external funding
agencies, and community representatives, are all significant players (see Ocasio,
1997).
Ocasio argued that players affect the organizational attention allocation and
regulation through their individual sources of power - their own personal set of
skills, beliefs, and values they bring to the organization (Ocasio, 1997; see also
March & Olsen, 1976). For example, those players who have certain skills or
networks might provide an entrepreneurial function in the allocation of attention in
organizations toward these dimensions.
Players might also affect organizational attention through their interpretations
of the historical precedents. For example, those players who are in favor of a
proposal or an action may interpret previous failures not as the outcome of the
incorrect policy design but that of insufficient efforts made to implement to the
policy (Levitt & March, 1988). It can thus be expected that some players would
consistently present his or her pet proposals or favorite initiatives in response to
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different funding opportunities, even if these proposals or initiatives have failed to
get funded previously.
Structural positions
Structural positions refer to “the roles and social identifications that specify
(a) the functions and orientations of decision-makers, and (b) their interrelationships
with other structural positions internal and external to the organization” (Ocasio,
1997, p. 197). Ocasio argued that structural positions provide a source of
differentiated attention to different aspects of the organization’s environment and
allow the players who occupy these positions to focus their attention on certain
problems and on certain solutions, and to ignore others.
According to Pfeffer (1981b), power is first and foremost a structural
phenomenon. Brass and Burkhardt (1993) distinguished between two kinds of
structural positions that serve as a basis for players to exercise their power: formal
positions (an individual’s level in the hierarchy) and informal positions (an
individual’s position in the network). The power associated with formal positions
represents the legitimated, institutionalized privilege of incumbency (Astley &
Sachdeva, 1984). The power resides in the position, which is recognized and
accepted by both superiors and subordinates. Because of the socially shared,
institutionalized nature of hierarchical position, it is one of the strongest structural
sources of potential power and one of the most immutable structural constraints on
power (Madison et al., 1980).
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Resources
Resources are defined as the set of assets that allow the organization to
perform its activities and to provide services (Ocasio, 1997; Wemerfelt, 1984).
Resources can be tangible (e.g., money, labor, etc.) as well as intangible (e.g., certain
skills, experiences, and values of the players and decision-makers, etc).
Resources influence the attention structure by determining the feasibility of
certain issues and highlighting the importance of certain solutions. Even if certain
issues or solutions are favored by organizational decision-makers, translating them
into official responses requires “that either existing resources be deployed or that
new resources be acquired or developed” (Ocasio, 1997, p. 198).
Together, these four categories of organizational attention structure explain
how nonprofit organizations actively allocate and regulate attention to different
issues and respond to them. Organizational rules and routines, for example, shape
organizational attention structure through the existence of historical precedents;
organizational decision makers tend to attend to issues or actions with which they
have had prior experiences. Players’ role in shaping organizational attention
structure is obvious: they are the ones who allocate their limited attention to selected
issues. Moreover, they are ones who have the flexibility to interpret the reality from
a plurality of possibilities. In controversial areas, competing groups of players often
struggle to impose definitions of a problem and, hence, to influence policy
(Hilgartner & Bosk, 1988). Structural positions divide the labor within organization,
allowing players to focus their time and effort on certain problems and on certain
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solutions. Organizational resources determine the feasibility of the issues carried by
different players; issues are more likely to be attended if the players who carry them
have the resources to make their cases credibly, persistently, and in ways seen as
potentially useful by those in power (Burstein, 1991, p. 332).
2.4.4 Nonprofit Governance Patterns and Organizational Attention Structure
In this sub-section, I argue that the governance pattern of a nonprofit
organization, which defines certain combination of board composition and board
power relative to chief executive, would affect the allocation of the organization's
attention to different issues by changing the configuration of the above four
categories of the organization's attention structure. Next, I will focus the discussion
on the effect of nonprofit governance pattern on two categories of the four
dimensions, namely players and resources, separately.
Effect of Nonprofit Governance Patterns on Players
Governance structure influences players of a nonprofit organization along its
two dimensions. Along the first dimension, board composition is expected to affect
the activity of potential players, the access of players to organizational decision
makers as well as the credibility of the issues that players are carrying. According to
research on strategic issue interpretation, organizational decision makers (i.e., board
of directors, chief executive, etc.) play an active role in determining how
organizations respond to issues (Ansof, 1980; Dutton & Duncan, 1987; Forbes &
Milliken, 1999; Ginsberg & Venkatraman, 1992). Decision makers face many more
issues than they can possibly respond to, and issues have to compete with each other
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for attention and for space on an organization’s agenda (Dutton & Ashford, 1993).
Thus, an organization’s responsiveness to certain issues would be a function of
whether these issues had been noticed by key decision makers and of whether these
decision makers perceived the issues as likely to have an impact on the
organization’s functioning if not addressed (Goodstein, 1995; Morgan & Milliken,
1992).
One factor that may increase the likelihood that organizational decision
makers, particularly board of directors, will notice certain issues is that the players
who carry these issues have access to them, and that they are able to deliver a
convincing case on these issues. I reason that higher community representation on
board, through the external contacts of board members, would increase the likelihood
that employees, clients and community residents get the access to organizational
decision makers, thus being motivated to become active players of an organization.
Moreover, cognitive theorists suggested that a common mindset or cognitive map
can develop among decision makers which limits and shapes their attention and
choice (Daft & Weick, 1984; Thomas & McDaniel, 1990). To the extent that
cognitive maps or knowledge structures form with experience in a particular
information environment, higher community representation on nonprofit board
would also increase the credibility of the issues carried by those employees, clients
and community residents, as their common community orientation might help to
develop the shared knowledge structures among board members and players from the
community.
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Along the other dimension, board power relative to executive is also expected
to affect both the board members who are active players and those who are not.
Again, according to research on strategic issue interpretation, an individual’s
willingness to promote an issue also may depend on his or her perceived power,
which is derived from both personal attributes and structural position in the
organization (Dutton & Ashford, 1993). Following this line of argument, a powerful
board would increase the likelihood for some board members to become active
players, and for other board members to stay active and promote certain issues of
their concerns.
Effect of Nonprofit Governance on Resources
Given the fact that most nonprofit organizations are relying on external
funding to survive, it is reasonable to expect that board linkage with external funding
agencies becomes one important type of organizational resource. Board linkage is
understood here as the extent to which a nonprofit organization incorporates
representatives of external funding agencies into its board of directors. Such
representatives include the board members who also serve on the boards and/or in
the top management team of external funding agencies (i.e., local companies,
foundations, and/or governments, etc.). Board linkage is an important resource for a
community-based nonprofit organization in the sense that it provides access to local,
public and/or private funding agencies. As argued by Milofsky and Romo (1981),
local corporations, foundations, and governments are “strong tie distribution
systems” in which funding decisions are generally based on influence and strong
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network ties. A community-based organization can be very influential if it is
“supported by a broad based constituency within a neighborhood and has the
capacity to deliver votes” (p. 10). Obviously, with more board linkages with
external funding agencies, an organization increases leverage in dealing with local
funding sources, and therefore is likely to be more responsive to those issues
initiated by local, public and/or private funding agencies through their opening
policy windows (i.e., funding opportunities).
In contrast, federal and state governments are “weak tie distribution
systems”. These systems have two crucial elements. The first is “that they involve
open social systems large enough that those distributing money are not likely to have
much information about individuals in the pool of potential recipients at the local
level so that they must rely on various indirect, abstract or universalistic means for
evaluating the quality of applicants”, and the second is “that distributional decisions
are generally based on technical and rational criteria” (Milofsky & Romo, 1981, p.
12). These characteristics highlight a strong technical requirement and suggest that
board linkages become less effective in co-opting the funding agencies. An
organization with more board linkages with external funding agencies is therefore
likely to be less responsive to those funding opportunities provided by federal or
state governments.
A non-community board or the so-called “power board” (i.e., a board that
consists of more corporate, professional and social elite), usually has more board
linkages than a community board (i.e., a board that consists of more community
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representatives such as staff, client, volunteers, community residents, etc.) does;
therefore, it has more access to external funding agencies. Some funding
opportunities that are embedded in board linkages are thus more likely to be highly
valued than other opportunities by a non-community board and, therefore, are more
likely to be attended to.
Based on the understanding that funding opportunities are initiatives taken by
funders to address different issues in the community, we therefore expect that an
organization with a non-community board would be more likely to respond to issues
initiated by local funders (i.e., corporate donors, foundations, or local government,
etc.) and less likely to respond to issues initiated by federal and state funding
agencies or by community representatives (i.e., staff members, volunteers, clients, or
residents in the neighborhood, etc.), while an organization with a community board
would be more likely to respond to issues initiated by community representatives.
2.4.5 “Policy Windows” and Organizational Attention Structure
“Policy windows” increase the availability and saliency of certain issues and
decreasing others, and call for decision-makers to attend to these issues. A policy
window can be understood as one of those numerous, discrete windows floating in
an “active stream” of windows with varying energy, shape and duration; those
problems, solutions, and participants that fit in the shape and catch the timing are
likely to reach a decision. However, not all the “windows” that are open at a certain
moment are able to attract the attention of organizational decision-makers: some
simply disappear without attracting any attention. Similarly, not all the problems or
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76
solutions are able to be included in a decision: some simply never fit in the shape of
the opening “window” or never catch the timing. Policy windows thus constitute
one important group of contextual variables that channel the decision making process
mainly by screening some combination of problems, solutions and participants into a
choice opportunity and screen out others.
Funding opportunities and focusing events reflect two basic types of “policy
windows” which provide chances for certain issues in the community to gain
decision-makers’ attention.
Funding Opportunities
Funding opportunities, usually in the form of Requests for Proposals (RFPs)
from government as well as foundations and other grant-giving agencies, not only
dominate the population of “policy windows” and constitute the majority of
decision-making activities, but also are direct motives behind most organizational
decisions. The application process of RFPs is often perceived as “cumbersome,
time-consuming, and inefficient”, requiring extensive paperwork and the long lead
time (Kramer & Grossman, 1987, p. 36), which is particularly true in the case of
government funding opportunities.
Many funding opportunities occur on a routine basis. Since nonprofit
organizations often lack adequate financial resources and are dependent on a steady
stream of revenue, these funding opportunities are very attractive because they
represent a predictable source of revenue. Going after these funding opportunities,
however, might lead some undesirable consequences: First, competition for external
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funding may require that decisions be made in a timely manner by a small number of
decision makers and therefore force other relevant parties out of the decision-making
process (Cnaan, 1991; Milofsky, 1988). Secondly, funding opportunities represent a
certain combination of problems and solutions that funders believe are important.
Thus, during the process of gaining financial support from external funding agencies
on terms dictated by these funding agencies and their definitions of community
needs and interests, nonprofit organizations might eventually lose their community
outreach and independent views of what needs to be done in the community. Last
but not the least, in the case of government funding opportunities, the administrative
headaches that nonprofit organizations experience in the application process would
often be extended to the contract management process. When they have to comply
with myriad rules, regulations, and restrictions that come with the contracts,
nonprofit contractors tend to reduce their flexibility, autonomy, and discretion
(Smith & Lipsky, 1993).
Focusing events
In contrast, “focusing events” (Kingdon, 1984, p. 99) refer to events that are
“sudden; relatively uncommon; can be reasonably defined as harmful or revealing
the possibility of potentially greater future harms”; that have “harms that are
concentrated in a particular geographical area or community of interest”; and that are
“known to policy makers and the public simultaneously” (Birkland, 1998, p. 54).
Examples of such events include crises or disasters. Many social scientists have
cited the importance of focusing events in advancing issues on the agenda and as
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78
potential triggers for policy change (Baumgartner & Jones, 1991; Birkland, 1998;
Kingdon, 1984).
Focusing events usually occur in a sporadic manner, grab attention more
suddenly and rapidly than do funding opportunities, and highlight certain issues to
which organizations might respond. For instance, focusing events may provide
important opportunities for “politically disadvantaged groups” of an organization
(e.g., the employees, clients, community residents, etc.) to deliver their messages or
bring out their concerns that would otherwise be overlooked or even “effectively
suppressed by dominant groups or advocacy coalitions” of the organization
(Birkland, 1998, p. 54). As Birkland pointed out,
The suddenness of focusing events . . . gives less powerful groups
significant advantages in their debate. The public and policy makers
learn of focusing events virtually simultaneously, which diminishes
advantages that policy elites have in framing the nature and substance
of public problems before broader public participation is possible.
(p. 56)
Drawing on his argument, I expect that when a focusing event occurs, organizations
would be more responsive to those issues brought out by their employees and clients
as well as residents in their communities.
2.5 Summary of the Chapter
Chapter Two has provided the theoretical framework for the study of
representation in nonprofit organizations. It examines the variation in nonprofit
governance patterns, the driving forces behind such variation, and the impact of such
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79
variation on organizational responsiveness to issues in the community (see Figure
2.5 for the embellished version of the original model).
Specifically, I have argued that a nonprofit organization establishes linkages
with multiple constituencies through the placement of their representatives on its
board, and that the task of engaging multiple constituencies and the limited capacity
of nonprofit board in placing representatives of all constituencies may create a
“crowding-out” effect that leads to the under-representation of some important, but
less powerful constituencies. The degree of a “crowding-out” effect, which is jointly
determined by the dependence factors and institutional factors of external
environment, in turn shapes patterns of nonprofit governance.
I have also argued that substantive representation of community interests, as
indicated by the responsiveness of nonprofit organizations to issues in the
community, can be explored through the introduction of an attention-based view of
nonprofit organizations. In light of this attention-based view, I contend that
governance patterns, along with other contextual factors such as “policy windows”
(i.e., funding opportunities and “focusing events”), may affect the configuration of
the attention structure of nonprofit organizations, and therefore influence their
organizational choice of which issues in the community should be responded and
addressed.
In the next chapter, I will develop the rationale for and provide information
on the research strategy and methodology employed in the study.
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Figure 2.5 The Theoretical Framework for the Dissertation (embellished)
Environmental Factors
Dependence Factors
* Dependence on Government Funding
* Dependence on Volunteer Labor
Institutional Factors
* Legal Influences
* Industry Differences
Nonprofit Governance Patterns
Strong, Non-
Community Board
Strong, Community
Board
Weak, Non-
Community Board
Weak, Community
Board
▼
Issue Network
Organizational
Attention Structure
* Player
* Resource
* Structural Position
* Rules of Game
Organizational Responsiveness
to Issues in the Community
Opening of "Policy Windows"
(funding opportunities and focusing events)
oo
O
81
' Although volunteers are generally valuable to the nonprofit sector, the importance o f volunteer labor
as a human resource varies across subsectors. In 1994, volunteers represented 16 percent and 22
percent o f total employment in the highly professionalized health services and education subsectors,
respectively. In contrast, volunteers provided 71 percent and 60 percent o f total employment in the
religion and arts subsectors, respectively. Midway between the highly professionalized subsectors
that primarily depend on paid employment and the subsectors that are primarily dependent upon
volunteer employment is the social and legal services subsector, where volunteers represent 37
percent o f total employment (Hodgkinson et al., 1996).
" For the purpose o f this study, professionals are included within the larger category o f “corporate,
professional and social elite”. Based on this categorization, a board that includes more professionals is
thus understood as a “non-community board”.
According to Cohen et al. (1972), problems refer to the concerns of people inside and outside the
organization, solutions refer to answers actively looking for questions, participants refer to persons
whose attention to a problem or attachment to a solution depends on competing demands for time, and
choice opportunities refer to occasions when an organization is expected to produce behavior that can
be called a decision. Within the context o f nonprofit organizations, the problem stream and the
solution stream can be understood as flows o f perceptions or ideas that are carried by participants.
The stream o f participants can be understood as a flow o f individuals with different energies, different
concerns, and different solutions. The stream o f choice opportunities can be understood as a flow o f
discrete “policy windows”.
1 V Note that a distinction should be made between players and organizational decision makers:
Decision makers are those who have official decision-making authority, as reflected in their structural
positions (i.e., board o f directors and chief executive), but not all decision makers are players: some
decision makers may not actively participate in the decision making process o f a particular
organizational action or move. On the other hand, some players who are not decision makers may
still exert important influence on a particular organizational action or move.
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CHAPTER 3
RESEARCH DESIGN AND METHODOLOGY
This chapter develops the rationale for and provides information on the
research strategy and methodology employed in the study. In consistent with the
theoretical framework presented in the previous chapter, the research methodology
includes two major components: a mail survey and a case study. This chapter first
provides an overview of the study design. It then discusses the issues of data
collection and data analysis in the survey component and the case study component
respectively. The chapter concludes with a brief section on confidentiality and
consent issues involved in the research process.
3.1 Overview of Research Design
The choice of research strategy in any given study is largely determined by
three conditions: “(a) the type of research question posed, (b) the extent of control an
investigator has over actual behavioral events, and (c) the degree of focus on
contemporary as opposed to historical events” (Yin, 1994, p. 4). The research design
of this dissertation study is no exception.
In this study, I attempt to address two related research questions: (1) What
are the environmental factors that lead to the variation in governance patterns of
nonprofit boards in the first place? (2) How does the variation in governance
patterns join other contextual variables in determining the responsiveness of
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nonprofit organizations to the interests of their constituents and the larger
community? In terms of the first condition, while the first research question focuses
on “what” questions that are more likely to favor survey or archival strategies than
others, the second research question is more explanatory and focuses on “how” and
“why” questions that are more likely to prefer case studies, histories, and
experiments. In terms of the second and third conditions, both of the two research
questions ask about a contemporary set of events over which the investigator has
little or no control, therefore favor surveys and case studies.
Based on the above reasons, the research methodology of this study is
designed to include two major components: a mail survey and an in-depth case
study. I will discuss details of the two components in the next two sections
respectively.
3.2 Survey Research
The first component of my research design is a mail survey. As I will discuss
in more detail later in this section, the procedure of conducting this survey research
is to develop a mail survey questionnaire and send it out to four hundred randomly
sampled nonprofit organizations in the City of Los Angeles, followed by an analysis
of the collected data.
Miller (1991) defines the mail survey questionnaire as “a list of questions for
information or opinion that is mailed to potential respondents who have been chosen
in some designated manner. The respondents are asked to complete the
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questionnaire and return it by mail” (p. 140). The appeal of mail survey
questionnaire as a means of gathering information lies in its ability to secure data at a
minimum of time and expense. It also has its disadvantages: 1) The problem of low
response rate has to be addressed. Response rates to mail questionnaires usually do
not exceed 50% when conducted by private and relatively unskilled persons.
Intensive follow-up efforts are required to increase returns. 2) The problem of
sampling bias also needs to be taken into consideration. Those who answer the
questionnaire may differ significantly from nonrespondents, thereby biasing the
sample (Miller, 1991).
3.2.1 Data and Sample
Data was collected on the random sample of four hundred nonprofit
organizations from a pool of nineteen hundred and seventy-six Los Angeles-based
nonprofit organizations with 501 (c) 3 tax-exemption status, which was obtained by
searching an on-line database of nonprofit organizations hosted by Gale Group.1
Next, a questionnaire was constructed that essentially asked to what extent
the environmental constraints influence the governance patterns of the sampled
organizations. The survey instrument was mailed to the executive directors of each
of the four hundred sampled organizations.
To check the questionnaire's readability and pertinence, a pre-test of the
questionnaire was conducted. I asked executive directors of two nonprofit agencies
representative of those I expected to survey to complete the survey questionnaire,
encouraging them to ask any questions that they had as they responded to my items.
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I watched for misunderstanding, ambiguity, and defensiveness, and asked the
respondents how they would restate questions that were difficult to understand or
answer.
To address the problem of nonreturns, I also made follow-up telephone calls
or site visits to those nonrespondents to obtain a higher return rate. The procedures
were: (1) to make the first round of follow-up phone calls to those non-responding
organizations three weeks after the mailing of the survey questionnaire; (2) to send
another copy of the survey questionnaire to the non-responding organizations by
mail or fax if necessary; (3) to make the second round of follow-up phone calls two
weeks after the first round; and (4) to conduct site visits to some non-respondents if
necessary.
Finally, the limitation of the database should be noted: the on-line database of
nonprofit organizations hosted by Gale Group is a collection of 501(c)(3)
organizations that file a 990 return with financial information to the IRS. Thus the
organizations included in this database tend to be relatively medium- or large-sized
organizations, as many small-sized organizations with annual revenue no more than
$25,000 are not required to file a 990 return. In reality, however, most charitable
organizations are very small. In 1993, out of the approximately 494,000 501(c)(3)
organizations, excluding religious organizations and private foundations, that
provided information to the IRS, only 33 percent of these organizations filed a 990
return with financial information (Hodgkinson et al., 1996).
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3.2.2 Model
Despite its simplicity, a linear model lost its appeal when the studied
relationships are not linear. For example, the probability that an organization will
choose certain composition of board members may not be well described by a linear
function. A marginal increase in the lowest level of volunteer dependence or in the
lowest level of legal influence is unlikely to result in the same increase in the
probability of having a strong, community board as marginal increase at higher
levels. In this case, a sigmoid representation is most appropriate.
The sigmoid representation (or S-shaped representation), like probabilities,
can be defined so that it is bounded by 0 and 1; thus when the dependent variables is
a dichotomy, its predicted value can be interpreted as a probability (Cleary & Angel,
1984). While discriminant analysis, logistic models, and probit analysis all are based
on S-shaped representations, this study uses logistic model. The rationale for
choosing logistic regression over discriminant analysis is the violation of
multivariate normality, which occurs when most or all the independent variables are
categorical, as is the case in this study. In such a situation, as argued by Cleary and
Angel (1984), “the assumption upon which discriminant analysis is based are
obviously violated and, consequently, discriminant estimators are often biased ....
However, even when all the variables are categorical, maximum-likelihood logistic
regression estimators are unbiased in large samples” (p. 340). Since the theoretical
and empirical differences between logistic and probit analysis are negligible (Cleary
& Angel, 1984), the rationale for choosing logistic regression analysis over probit
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model is based solely on the fact that I am more familiar with the statistical software
and the computational procedures for the former.
In this study, the responses that we are interested in are nonprofit governance
patterns. As will be discussed in more detail in the following section, the dependent
variable takes more than two values and there is no natural ordering among the
different values, which makes multinomial logistic regression an appropriate method
to use. Therefore, this study employs a multinomial logistic model to specify the
functional relationship between an organization’s environmental factors and its odds
of developing different governance patterns.
The following covariates are included in the set X: Organizational Age
(AGE), Board Size (BSIZE), Dependence on Volunteer Labor (VOLUNTEER),
Dependence on Government Funding (GOVERNMENT), and Industry Influence
(INDUSTRY).
3.2.3 Variables
GOVERNANCE. This variable is studied as a dependent variable to
examine the four patterns of nonprofit governance. For our statistical analysis, this
variable takes on one of four values: 1 = strong, community board; 2 = weak,
community board; 3 = strong, non-community board; 4 = weak, non-community
board. Thus, the dependent variable indicates which of N=4 governance patterns
organization i develops, as indicated by organizational responses to my survey.
In order to define and measure this dependent variable, we need to examine
the two dimensions of nonprofit governance patterns: Community Representation on
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Board (BR) and Board Power over Chief Executive or Staff (BP). In terms of the
first dimension, inclusion of thirty-four percent or more community representatives
in the board will be regarded as having strong BR and assigned the value of 1,
otherwise 0. Question regarding this dimension is given to respondents (item 10 in
the survey questionnaire). The rationale for setting 34 percent as the cutoff rate of
BR is based on the following considerations: 1) Given the multiple-constituencies
nature of nonprofit organizations and recent trends of professionalization, it is not
uncommon for many (if not most) nonprofit boards to have a very low level of
presence by community representatives. A higher cutoff rate (e.g., 50%) would
probably lead to an extremely uneven distribution of responses and create difficulty
for statistical analysis. 2) The cutoff rate of 34 percent was used in legal mandate
requiring community participation in community action programs during the “war
against poverty” in the 1960s. Office of Economic Opportunity’s (OEO) early
administrative “rule of thumb,” which was later written into law by Congress,
required that at least one-third of the governing body for local community action
programs consist of representatives of the poor (OEO, 1965; cited in Peterson, 1970,
p. 494).
In terms of the second dimension, a strong board that dominates chief
executive or staff will be assigned the value of 1, otherwise 0. Both subjective and
objective measures are used to code this variable. Question regarding the subjective
measure is given to respondents (item 14 in the survey questionnaire). Descriptions
of four board-executive relationship patterns are provided, which read as follows:
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Description #1
The CEO gathers information and advice from many stakeholders,
formulates a decision, and has it ratified by the board as a whole. The
CEO is highly influential and trusted because of his or her expertise
and experience.
Description #2
A Small core group in the board plays a very influential role in
recommending a course of action on governance issues. These are
then debated and decided upon by the whole board. The CEO
provides information and advice during the decision-making process.
Description #3
A core of senior professional staff gathers information and advice
from many stakeholders, formulates a decision, and has it ratified by
the board and the CEO. The staff is highly influential and trusted
because of their expertise and experience.
Description #4
The board operates according to an ideology of consensus between
the board and the CEO. The board emphasizes extensive
communication and consultation with all interested parties related to
any given issue.
Choice of Description #2 by the respondents will be regarded as strong board power
and assigned the value of 1, while choice of Descriptions #1 and #3 will be regarded
as weak board power and assigned the value of 0. If Description #4 is selected, an
objective measure - frequency of board meetings - will be used as an additional
criterion to help determine whether an organization has strong or weak board power:
for a given organization, if the board meeting frequency is 8 or higher during the
year 2001, then it will be regarded as have strong board power and assigned the
value of 1, otherwise 0. Questions regarding the frequency of board meetings are
given to respondents (item 12 in the survey questionnaire).
The four categories of the dependent variable are defined as certain
combination of the above two dimensions. A strong, community board is coded as a
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90
board with both strong BR (BR=1) and strong BP (BP=1). This category will be
assigned the value of 1. A weak, community board is coded as a board with strong
BR (BR=1) but weak BP (BP=0). This category is assigned the value of 2. A weak,
non-community board is coded as a board with both weak BR (BR=0) and weak BP
(BP=0), and is assigned the value of 3. A strong, non-community board is coded as a
board with weak BR (BR=0) but strong BP (BP=1), and is assigned the value of 4.
VOLUNTEER. This binary variable is studied to examine the extent to
which an organization is dependent on volunteer labor. Question is given to
respondents regarding the work in the organization that is done by volunteer.
Respondents are asked to select among the following four options: 1) “Almost entire
work (over 90%)” in an organization is done by volunteers; 2) “Between 51% and
90%” of work is done by volunteers; 3) “Between 10% and 50%” of work is done by
volunteers; and 4) "almost none (Lower than 10%)". The selection of the first or
second option will be regarded as high VOLUNTEER and assigned the value of 1,
while the selection of the third or fourth option will be regarded as low
VOLUNTEER and assigned the value of 0.
GOVERNMENT. This variable is studied to examine the extent to which an
organization is dependent on government funding. It is defined as a continuous
variable and measured by the actual percentage of government funding in a given
organization’s funding composition, as reported in organizational responses to my
survey.
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INDUSTRY. This variable is studied to examine the industry type to which
an organization belongs. It is defined as a binary variable and measured by industry
type. Question regarding the industry type is given to respondents. For the purpose
of this study, human service and health service industries are regarded as strong
INDUSTRY and assigned the value of 1, otherwise 0.
AGE. One variable is considered here as a control variable: Organizational
Age (AGE). It is defined as a continuous variable, and measured by the difference
between the year of 2001 and the year when a given organization was founded.
BSIZE. This variable refers to Board Size, which is also considered as a
control variable. It is defined as a continuous variable, and measured by the natural
log of the total number of people serving on the board of directors of a given
organization.
3.3 Case Study
The second component of my research design is an embedded case study;
that is, a case study with multiple units of analysis. Semi-structured, in-depth
interviews have been conducted with key individuals from the organization that was
selected for case study.
One of the common concerns about case studies is that they provide little
basis for scientific generalization. In response to this concern, Yin (1994) argued,
Case studies, like experiments, are generalizable to theoretical
propositions and not to populations or universes. In this sense, the
case study, like the experiment, does not represent a ‘sample,’ and the
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investigator’s goal is to expand and generalize theories (analytical
generalization) and not to enumerate frequencies (statistical
generalization), (p. 10).
With this method of “analytical generalization”, the theoretical framework that was
developed in the Section Four of the previous chapter is used as a template to
compare the empirical results of the case study. Therefore, we should not interpret
this as the generalization from sample to population.
3.3.1 Selection of the Studied Case
The selected organization for the case study was ALPHA, a nonprofit human
service organization located in South Central Los Angeles that was introduced in
Chapter One. The rationale for selecting the studied case was two-fold. First, as
illustrated in Chapter One, the studied case served as the initial motivation for me to
conduct this dissertation research. Secondly, the selection of this case was also out
of some practical concerns. I was interested in analyzing a case that would allow me
to explore the effects of nonprofit governance patterns on the organizational
responsiveness to the community. Since four governance patterns have been roughly
defined in the theoretical framework laid out in the previous chapter, it would be
ideal if we could deliberately select four cases that represent each of the four
governance patterns. Due to my time and budget restrictions as a student
investigator, however, it would be both time-consuming and financially challenging
to conduct an in-depth case study of four organizations.
Despite the limitation that becomes inevitable in a single case, two
advantages are notable in this in-depth case study: 1) The coverage of two
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governance patterns. During the past eleven years since this organization was
founded in 1992, the governance of ALPHA has evolved from a strong, non
community board to a weak, non-community board. 2) The “insider” view. During
the period of 1999 to 2001,1 had volunteered and worked with this organization and,
therefore, obtained extensive “insider” knowledge that otherwise would not be
accessible.
3.3.2 Selection of Interviewees
The selection of interviewees was based on two major considerations: 1) The
representation of different stakeholders of the studied organization (i.e., board,
executive director, staff members, volunteers, and community representatives, etc.);
and 2) the accessibility of those individuals who represent different stakeholders. A
total of eighteen unstructured, in-depth interviews - including ten taped interviews
and eight un-taped interviews - were conducted with key individuals from the
studied organization.
Among the ten taped interviews, two were held with the current executive
director, two were with staff members, four were with consultants of the studied
organization, and two were with block captains in the neighborhood where the
studied organization is located (see Table 3.1). One taped interview was held with a
consultant who also served as the special assistant to the board chairman. The board
chairman declined my invitation for a taped interview; instead, his special assistant
agreed to “unofficially” answer my interview questions on his behalf.
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Table 3.1 Participants by Title: Taped Interviews
Interview # Title
01 Executive Director
02 Paid Staff (Training coordinator)
03 Paid Staff (post-employment coordinator)
04 Block Captain
05 Consultant
06 Consultant
07 Consultant
08 Paid Staff (arts program coordinator)
09 Executive Director
10 Block Captain
Among the eight un-taped interviews, one was held with a board member, six
with staff members, one with a consultant, and one with a volunteer (see Table 3.2).
Table 3.2 Participants by Title: Un-Taped Interviews
Interview # Title
01 Former staff (program director)
02 Paid Staff (arts program coordinator)
03
Paid Staff (Secretary)
04 Former Staff (program coordinator)
05 Consultant (Instructor)
06 Paid staff (director of arts programs)
07 Volunteer
08 Board member
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3.3.3 Interview Format
Patton (1990) describes three approaches to interviewing, namely, informal
conversational, interview guide, and standardized, the main difference among the
three being “the extent to which interview questions are determined and standardized
before the interview occurs” (p. 280). Similarly, Weiss (1994) describes and
discusses three interview categories: polling or survey interviews, fixed-question -
open-response interviews, and qualitative interviews. According to Weiss, in the
first type of interviewing, questions are fixed and respondents are required to choose
from a limited number of answer categories, whereas in the second type of interview
respondents are asked carefully crafted questions but are free to answer them in their
own words rather than required simply to choose one or another predetermined
alternative. In qualitative interviews, on the other hand, the interviewer is free to
tailor questions to respondents and is not required to ask exactly the same questions
to all respondents in the same order.
The approach taken in this study can be best described as a balanced mix of
survey interviews, fixed-question - open-response interviews, and qualitative
interviews described by Weiss (1994). More specifically, a three-page survey
questionnaire was completed by the executive director of the studied organization.
Semi-structured, in-depth qualitative interviews were conducted to gather the field
data for this study. An interview protocol, with a complete list of fully worded
questions to be explored with each and every interviewee, was developed specially
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96
for this research. This would enable the researcher to have more control over data
gathering than would have been possible with a purely qualitative interview research.
Face-to-Face interviews were used to gather data in this study, given both the
purposes of the study and the resources and constraints of the researcher.
3.3.4 Interviewing Procedures
The interviews for the study were conducted in the period of December 2001
to December 2002. Each interview lasted about 45 to 60 minutes. A total of ten
interviews were audiotape recorded, while the other eight interviews were conducted
without audiotape recording.
3.3.5 Interviewing Contents
During the unstructured interviews, questions covered, but were not limited
to, the following major categories:
(1) Organizational information. Questions in this category include the name,
mission, history, and functional category of the studied organization; the existing
programs and funding of the studied organizations; etc.
(2) Board of directors. Questions in this category include information
regarding the size and composition of the board of directors; the scope of activities
associated with board of directors and sub-committees of the board; board meetings;
turnover of board members; and the board-executive relationship; etc.
(3) Chief executive. Questions in this category include the personal
information regarding the current chief executive; the scope of activities associated
with chief executive; the board-executive relationship; and executive turnovers; etc.
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(4) Staff. Questions in this category include information regarding the
number of full-time and part-time paid staff and the type of activities that they
conducted; turnover of paid staff; the frequency, attendance, and agenda of staff
meetings; and other interactions between staff and organizational leadership; etc.
(5) Volunteers and residents in the neighborhood. Questions in this category
include information about the number of volunteers and the type of activities that
they conducted; the access of volunteers and neighborhood residents to board
meetings or staff meetings; and other interactions between volunteers (neighborhood
residents) and organizational leadership; etc.
(6) Funding opportunities, initiatives, and programs. Questions in this
category include information regarding the identifiable funding opportunities,
initiatives, and programs; the decision-making process in response to the funding
opportunities (initiatives) and the major players in the decision-making process; and
the effects of these funding opportunities, initiatives, and programs on organizational
governance and management; etc.
(7) Focusing events. Questions in this category include information
regarding a variety of events at larger-community-level (e.g., civil unrest,
earthquake, etc.), neighborhood level (e.g., community rally against ALPHA), as
well as organization level (i.e., community shooting, community thefts).
3.3.6 Triangulation of Data
In addition to individual interviews, three other methods of data collection -
observations, surveys, and archive data analyses - were also used to provide a
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98
measure of validity through data collection method triangulation. The relevant
organizational archives may include articles of incorporation, organizational bylaws,
IRS 990 forms, grant proposals, progress reports, annual reports, meetings notes, and
organizational videos, among others. These documents are to serve several major
purposes. First, they help the researcher to gain a deeper and better understanding of
the scope of the programs and activities in the studied organization. Second,
whenever available and appropriate, the documents are utilized as a secondary
source to evaluate and draw conclusions from the interview data.
3.3.7 Sorting, Coding, and Analysis of Interview Data
As pointed out by Yin (1994), one of the least developed and most difficult
parts of conducting case studies is how to analyze the data drawn from the case
studies. Too often, investigations become stalled at the analytical stage due to the
fact that “investigators start case studies without having the foggiest notion about
how the evidence is to be analyzed” (Yin, 1994, p. 102).
In order to avoid the above problem, I took several steps to ensure an
efficient and effective way to sort, code, and analyze the interview data. First, all the
interviews were transcribed into word processing documents. Thus, separate files
were created for each interviewee. Second, all the transcripts for the audiotaped
interviews were stored in a folder labeled as “Taped Interviews”, and were numbered
based on the time order. For instance, the very first audiotaped interview was
recorded as “Taped Interview #1”. Similarly, all the transcripts for the interviews
without audiotape recording were stored in a folder labeled as “Un-Taped
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99
Interviews”, and were also numbered based on the time order. Third, additional files
were developed bringing together the interviewees’ responses relevant to each of the
seven major categories mentioned in Sub-Section 3.3.5. Thus, seven large word
processing documents were created, each containing all responses from the
interviewees to the questions falling into that specific category.
3.3.8 Consent, Confidentiality, and Other Issues
The interviewee’s oral consent to tape-record the interview (in the case of
taped interview) or take notes (in the case of un-taped interview) was sought and
obtained at the beginning of each and every interview. The interviewee was
informed that he or she could choose whether to be in this study or not, and that he or
she could withdraw at any time without consequences of any kind. The interviewee
was also informed that he or she could also refuse to answer any questions that he or
she did not want to answer and still remain in the study.
In terms of confidentiality, any information that was obtained in connection
with this study and that can be identified with interviewees will remain confidential
and will be disclosed only with their permission or as required by law. The data are
stored in a locked cabinet. Only the student investigator and his faculty advisor will
have the access to the data. The information that interviewees provided during the
interview(s) was videotaped. Interviewees had the right to review/edit the tapes.
Only the student investigator and his faculty advisor had access to the tapes. The
tapes will be erased after the results of research are published or discussed at
conferences. When the results of the research are published or discussed in
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100
conferences, no information will be included that would reveal the identities of
interviewees. If photographs or audiotape recordings of interviewees are used for
educational purposes, their identities will be protected or disguised.
During the interviews, the student investigator made efforts to develop an
atmosphere of trust and collegiality to make the participants comfortable sharing
their information, insights, and documents regarding the studied organization. This
task was made easier by the fact that the majority of the interviewees had already
known the student investigator prior to the interviews. In other words, certain level
of mutual trust between the interviewees and the student investigator prior to the
interviews helped to reduce their concern about confidentiality and to increase their
willingness to share their views in an open and sincere manner. At the end of the
interviews, the researcher expressed his gratitude and appreciation to all
interviewees, for their participation and cooperation, as well as for the information
and insights they shared with him.
1 The website for the database is: http://galenet.galegroup.com/servlet/AU?locID=ucsyla.
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101
CHAPTER 4
SURVEY FINDINGS
This chapter presents the findings from the survey research undertaken as
part of this dissertation. Using resource dependency and institutional theories, I
posited in Section Three of Chapter Two that the level of descriptive representation
in nonprofit organizations, as reflected in the variation in their governance patterns,
is the function of two important groups of factors of the external environment,
namely dependence factors and institutional factors. More specifically, I
hypothesized that higher level of descriptive representation, embodied by a strong,
community board, is more likely to be found in those organizations with higher
dependence on volunteers, and less likely to be found in those with higher
dependence on government funding and those operating in health and human
industries. Given my use of categorical dependent variables and the nature of the
independent variables, I relied on multinomial logistic regression analysis of the
survey data of four hundred randomly sampled nonprofit organizations for
hypotheses testing.
4.1 Data Description
Survey questionnaires were sent out in the first week of January 2002 to a
total of four hundred randomly sampled nonprofit organizations with 501(c)3 tax
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102
exemption status in the city of Los Angeles. Twenty-four questionnaires were later
returned due to incorrect address and, therefore, were removed from the sample. To
ensure a higher response rate, follow-up phone calls were made to those
organizations that remained in the sample. As of May 1, 2002, a total of ninety-
seven survey questionnaires were completed and returned, with a response rate of
25.80 percent (97 out of 376). Among the ninety-seven returned questionnaires, two
were determined as incomplete, leaving ninety-five questionnaires qualified for data
analysis.
This fairly low response rate, while common in organizational surveys, is
likely to produce biased samples. Therefore, it is important to check if the sampled
data differ from the national data in potentially nontrivial ways. Figure 4.1 presents
the distribution of the ninety-five responding organizations by their functional
category. As shown in the graph, the largest group is social and legal services, with
25 percent of the respondents taking this form; health organizations, as the next
largest type, comprise 20 percent of the respondents; the third and fourth largest
types are education/research organizations and arts/culture organization, with 15 and
12 percent of reporting organizations falling into these two categories respectively;
the smallest components are foundations and religious organizations, representing
only 1 and 2 percent respectively of the total respondents. The distribution of the
samples is consistent to that of the most recent national data, which reports that most
common categories of reporting public charities are human services (35 percent);
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Figure 4.1 Distribution of Organizations by Functional Category
Health Services
Foundation - 1 %
Arts and Culture - 12%
16% - Education/Research
2% - Religious Organizations
25% - Social/Legal Services
104
education (16 percent); health (15 percent); and arts, culture, and humanities (11
percent; see Weitzman and Jalandoni, 2002). It appears that, to some extent, social
and legal services are under-represented, while health organizations are over
represented, in the sample data. There are several possible explanations for the
differences: First, the sample data was collected on a population of nineteen hundred
and seventy-six public charities in the City of Los Angeles, an urban setting that
might cause differences in the characteristics of organizations as compared to the
national data. Another reason might lie in the size of the sample: given this rather
small sample size, the addition of a few organizations in any particular category
would significantly change the percentage of organizations in that category.
Two additional exhibits are provided to present other dimensions of the
descriptive statistics of the data collected through the mail survey. Figure 4.2
illustrates an uneven distribution of the responding organizations by their governance
patterns. The “weak, non-community board” is clearly the largest group, with 43
percent of the respondents falling within this category. Taken together with the
“strong, non-community board”, 62 percent of the respondents reported to have a
board consisting mainly of corporate, professional, and social elite. By contrast, the
“weak, community board” is the smallest of the four groups, with only 15 percent of
the respondents falling within this category. The “strong, community board”
category takes the remaining 23 percent of reporting organizations.
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Figure 4.2
Weak, Non-Community
Board - 43%
Distribution of Organizations by Governance Patterns
23% - Strong, Community
Board
15% - Weak, Community
Board
19% - Strong, Non-
Community Board
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Table 4.1 provides the means and standard deviations of all variables. It is
worth noting that the variable GOVERNMENT, measured by the actual percentage
of government funding in a given organization’s total revenue, has a mean score of
24.47. It indicates that, on average, nearly 25 percent of a reporting organization’s
total revenue comes from government funding sources. At its first glance, this
percentage is significantly higher than that of the most recent national data
(Weitzman & Jalandoni, 2002, p. 135), where government funding only accounts for
8 percent of the total revenue of a nonprofit organization.
Table 4.1 Descriptive Statistics
Variables Observations Mean Standard Deviation Min Max
GOVERNANCE 95 2.74 1.23 1 4
AGE 95 28.60 28.97 2 145
BSIZE 95 2.45 .60 1.39 4.65
VOLUNTEER 95 .57 .50 0 1
GOVERNMENT 95 24.47 32.93 0 99
INDUSTRY 95 .45 .50 0 1
This difference might be partly due to the differences in the way the data was
collected: In the national data, the information about this item was based on IRS data
files, which exclude from the category of “government funding” such direct and
indirect government payments as those from Medicare and Medicaid. By contrast,
the information about this item in my sample data was based on the self-report by the
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107
respondents, who possibly would take these types of government payments into
consideration while completing the survey.
4.2 Multinomial Logistic Regression Analysis
Table 4.2 displays the results of the multinomial logistic regression models of
nonprofit governance patterns. The three models shown in the table are nested in
that we have added new independent variables in each new model. The most
common method to contrast the fit of nested multinomial logistic regressions is the
log likelihood ratio test (Haberman, 1977; Knoke & Bohmstedt, 1994). The test
statistic (G2 ), which compares the ratio of the likelihoods of two nested models, is
distributed as a chi-square with degrees of freedom equal to the difference in the
number of predictors between the two models, which is also equal to the difference
in the degree of freedoms of the two models. The formula for the test statistic is:
G2 = -21n (Lo/Li) = (-21nLo) - (-21nL,) = 2(lnLi-lnLo)
Model 1 provides the baseline model including only the control variables:
organizational age (AGE) and board size (BSIZE). Model 2 adds two variables
testing the effect of dependence factors, namely dependence on volunteer labor and
dependence on government funding. The addition of these two variables
significantly improves the model over Model 1(G2 = 29.16 with degrees of freedom
equal to 6). As compared to Model 2, Model 3 adds another variable representing
industry difference, which again significantly improves the model fit over Model 2
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Table 4.2 Results of Multinomial Logistic Regression Models of Nonprofit Governance Patterns
Dependent Variable Category Independent Variables Model 1 Model 2 Model 3
Weak, Community Board
Intercept 0.57 (1.64) 0.72 (1.77) 0.75 (1.82)
Organizational Age (AGE) -0.01 (0.02) 0.01 (0.02) -0.02 (0.02)
Board Size (BSIZE) -0.46 (0.76) -0.50 (0.82) -0.48 (0.85)
Dependence on Volunteer -1.10 (0.87) -1.30 (0.89)
Labor (VOLUNTEER)
Dependence on Government 0.06** (0.02) 0.06** (0.03)
Funding (GOVERNMENT)
Industry Differences (INDUSTRY) 2.11** (1.02)
Strong, Non- Community Board
Intercept -1.34 (1.37) -1.27 (1.54) -1.30 (1.58)
Organizational Age (AGE) -0.03* (0.02) -0.04** (0.02) -0.05** (0.02)
Board Size (BSIZE) 0.77 (0.61) 1.06 (0.68) 1.03 (0.71)
Dependence on Volunteer -1.90** (0.78) -2.11*** (0.80)
Labor (VOLUNTEER)
Dependence on Government 0.06** (0.02) 0.06** (0.03)
Funding (GOVERNMENT)
Industry Differences (INDUSTRY) 2.04** (0.95)
Weak, Non-Community Board
Intercept -0.80 (1.17) -0.71 (1.35) -0.86 (1.40)
Organizational Age (AGE) 0.00 (0.01) -0.00 (0.01) -0.01 (0.01)
Board Size (BSIZE) 0.43 (0.51) 0.70 (0.59) 0.72 (0.61)
Dependence on Volunteer -1.89*** (0.71) -2.13*** (0.74)
Labor (VOLUNTEER)
Dependence on Government 0.06** (0.02) 0.06** (0.03)
Funding (GOVERNMENT)
Industry Differences (INDUSTRY) 2.32*** (0.86
Log Likelihood -119.53 -104.94 -100.08
* p<.10 ** p < .05 *** p < .01
Note. Outcome GOVERNANCE=Strong community is the comparison group.
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(G2 = 9.73 with degrees of freedom equal to 3). Since Model 3 has the highest
overall fit, I focus on Model 3 to discuss the results of hypothesis testing and
relevant findings.
The coefficients in Model 3 indicate the effects of each independent variable
on being in the “weak, community board”, “strong, non-community board”, or
“weak, non-community board” category respectively relative to being in the “strong,
community board” category, the reference category. A positive and significant
logistic coefficient means that, controlling for other variables in the equation, the
independent variable increases the odds of being in the non-reference category, i.e.,
the possibility of being in the non-reference category over that of being in the
reference category. Conversely, a negative significant coefficient implies that the
independent variable decreases the odds of being in the non-reference category.
Hypothesis la maintains that an organization more dependent on government
funding is more likely to develop a strong, non-community board and less likely to
develop a strong, community board. This hypothesis is strongly supported by the
data. The variable representing dependence on government funding
(GOVERNMENT) has a positive significant coefficient in the “strong, non
community board” category of Model 3, indicating that to the extent that it is
dependent on government funding, an organization is more likely to develop a
strong, non-community board and less likely to develop a strong, community board.
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More specifically, an increase of one percent in the dependence on government
funding leads to roughly 1.5 percent increase (exp(1.57X.01)=1.015) in the odds
that an organization will have a strong, non-community board.
The above interpretation of the magnitude of the effect of governmental
dependence, however, has to be used with caution. It is questionable on two
grounds: First, the choice of the particular value of the unit of the variable (one
percent in this case) is arbitrary. For instance, why use a change of 1 percent when
10 or 20 percent may be equally good? In reality, changes in multiples of 5 or 10
seem to be more meaningful and easily understood. Second and more importantly,
this interpretation assumes a linear relationship between GOVERNMENT, a
continuous variable, and the dependent variable. Such an assumption is problematic
in this case, since the additional increase in the odds of developing a “strong, non
community board” for an organization with 20 percent of government funding
compared to one with 10 percent of government funding may be quite different from
that for an organization with 60 percent of government funding compared to one
with 50 percent.
Hypothesis lb posits that an organization more dependent on volunteer labors
has higher possibility to develop a strong, community board. As expected, the
variable representing dependence on volunteer labor (VOLUNTEER) has negative
and significant coefficients in two of the three categories of Model 3, suggesting that
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an organization which relies more on volunteers for its programs and activities is
more likely to develop a strong, community board and less likely to develop a (either
strong or weak) non-community board.
Hypotheses 2a-1 and 2a-2 are alternative arguments. Hypothesis 2a-1
predicts that the more dependent an organization is on government funding, the more
likely it is to develop a weak, community board rather than a strong, community
board. In contrast, Hypothesis 2a-2 states that the more dependent an organization is
on government funding, the more likely it is to develop a weak, non-community
board rather than a strong, community board. The data provides evidence to support
both hypotheses since the variable GOVERNMENT has significant positive
coefficients in both the category of “weak, community board” and the category of
“weak, non-community board”. However, the magnitude of the effect of dependence
on government funding differs in the two cases. A one-percent increase in the
dependence on government funding results in an increase about 1.2 percent
(exp(1.16 X.01)=1.012) in the odds that an organization will develop a weak, non
community board, but the same increase in the dependence on government funding
brings about a slightly higher increase of roughly 1.7 percent
(exp(1.72 X .01)=1.017) in the odds that an organization will have a weak,
community board relative to a strong, community board. For the same reasons as
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we discussed in Hypothesis la, this interpretation of the magnitude of the effects of
independent variables has to be used with caution.
Hypothesis 2b holds that a health or human service nonprofit organization
tends to be chaired by a weak, community board rather than a strong, community
board. The variable INDUSTRY, a dichotomous variable with “1” referring to the
health and human service category and “0” denoting the rest, has positive and
significant coefficients in all the three categories of Model 3. This suggests that
when a nonprofit organization belongs to the human or health service industry, it is
less likely to develop a strong, community board and more likely to develop any
other patterns of nonprofit governance, in support of Hypothesis 2b.
The only control variable that remains significant in Model 3 is AGE
(organization age) in the “strong, non-community board” category. It has a negative
significant coefficient -0.05, suggesting that an older organization is more likely to
develop a strong, community board (the reference category) than a strong, non
community board.
4.3 Discussion of the Findings
The survey component of the dissertation was designed to examine the
conditions under which nonprofit organizations vary in their descriptive
representation of community interests. The findings from the survey research
supported most of the hypotheses while at the same time provided a few unique
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perspectives on the relationship between various environmental factors and nonprofit
governance patterns.
First, the results highlighted the important role of volunteers in promoting
descriptive representation in nonprofit organizations. The study supported the
hypothesis that an organization more dependent on volunteer labor is more likely to
develop a strong, community board. This finding sheds new lights on the existing
research on volunteering: While the value of volunteers has been widely recognized
as an important economic resource to nonprofit organizations (Brown, 1999), this
study suggests that volunteers may well be a powerful driving force behind the
development of their democratic value as representative organizations of community
interests.
Second, the results showed that dependence on government funding reduces
the levels of descriptive representation in nonprofit organizations through two
possible mechanisms. One mechanism is the funding dependence effect. Supporting
the argument that an organization might use its board appointments as a co-optive
device to mange its funding dependence, the study found that to the extent that an
organization is dependent on government funding, it is more likely to develop a
strong, non-community board rather than a strong, community board. While the
increase in the number of corporate, professional and social elite on its board might
help the organization to secure public funding, it does so at the price of a
compromised descriptive representation of community interests.
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The other mechanism is the legitimizing effect at the societal level. Two
alternative arguments were made in terms of the legitimizing effect of government
funding dependence: One predicted that the more dependent an organization is on
government funding, the more likely it is to demonstrate its legitimacy through the
development of a weak, community board rather than a strong, community board;
the other emphasized the influence of professionalism, predicting that to the extent
that an organization is dependent on government funding, it is more likely to develop
a weak, non-community board rather than a strong, community board. The results
supported both hypotheses, indicating the possibility of both effects.
The above findings about the effects of government funding on nonprofit
governance have suggested that governmental dependence might undermine the
descriptive representation of a nonprofit organization by pushing its board away
from the community and from the making of important decisions. It seems that as
the proportion of government funding increases, nonprofit board has evolved from a
policy-making body to a fund-raising mechanism or a legitimizing device. Findings
by other scholars have also demonstrated that government funding leads to less
volunteer support (Nowland-Foreman, 1998), less private donation (Brooks, 2000),
and reduced opportunities for participation (Nowland-Foreman, 1998).
Traditionally, having a strong, community board, seeking charitable contributions
from the public, and using volunteer labor have been the hallmark of nonprofit
organizations; yet governmental dependence seems to be eroding this tradition by
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pulling these organizations out of their communities and by shrinking their base of
public support.
Third, descriptive representation in nonprofit organizations might also be
compromised through the legitimizing effects of institutional factors at the industry
level. The results showed that when an organization belongs to the human or health
service industry, it is less likely to develop a strong, community board and more
likely to develop any other patterns of nonprofit governance. Although this finding
is in support of my prediction that a weak, community board is associated with
operating within highly regulated industries such as human and health services, it
also suggested that facing strong industry regulation, an organization is more likely
to develop a weak, non-community board rather than a strong, community board.
This seemed to indicate that, as professionalism is becoming a trend in public and
nonprofit sectors (DeHoog, 1985), health and human service organizations might
choose to use their board as a legitimating device by making the outlook of their
board more professionalized instead of more community oriented.
4.4 Summary of the Chapter
In this chapter, multinomial logistic regression has been conducted on the
survey data to test the hypotheses presented in Section Three of Chapter Two. The
statistical results have provided evidences in support of the arguments that
governmental dependence tends to reduce the levels of descriptive representation in
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nonprofit organizations through two possible mechanisms - the funding dependence
effect and the legitimizing effect; and that these effects are counter-balanced by
dependence on volunteer labor, which tends to increase the levels of descriptive
representation in nonprofit organizations.
In Chapter Two, I introduced a theoretical framework to examine two
important themes arising from democratic deficit in nonprofit governance: the theme
of descriptive representation and the theme of substantive representation. I stated
that environmental factors affect the descriptive representation of nonprofit
organizations by shaping the patterns of their governance structure, and affect their
substantive representation of community interests by determining how nonprofit
organizations respond to issues in the community; and that the descriptive
representation of nonprofit organizations also affects their substantive representation.
Since the survey findings have provided support to my arguments in terms of the
theme of descriptive representation, it is interesting to see how the findings from the
case study may illuminate my arguments in terms of the theme of substantive
representation.
In next chapter, I will present the findings from my case study.
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CHAPTER 5
CASE STUDY FINDINGS
In Chapter Two, I argued that substantive representation of community
interests, as indicated by the responsiveness of nonprofit organizations to issues in
the community, could be explored through the introduction of an attention-based
view of nonprofit organizations. In light of this attention-based view, I contended
that there is a link between descriptive representation and substantive representation,
but this link is contingent upon a set of environmental and contextual variables; and
that constituent participation has a positive effect on substantive representation in
nonprofit organizations. To illustrate this attention-based view of nonprofit
organizations, a case study was conducted on a nonprofit human service organization
in Los Angeles.
This chapter presents the findings from the case study. I first focus on the
converging phase of the organizational decision-making process, and discuss the
availability of communication channels through which constituents were able to
provide input for organizational decision-making. I then turn to the screening phase
and discuss how the evolving pattern of governance structure joined “policy
windows” (i.e., funding opportunities and “focusing events”) in determining the
configuration of the attention structure of the studied organization, and in turn
affected its selective responses to different issues in the community.
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5.1 The Converging Phase
As suggested by the attention-based view of nonprofit organizations,
communication is central to the development of issue network in the converging
phase. The case findings have shown that communication in and around ALPHA
took both direct and indirect forms, as we will discuss in the following subsections.
5.1.1 Indirect Forms of Communication
The indirect communication channels in ALPHA consisted of community
needs assessment studies conducted by the organization and organizational
publications (e.g., newsletters, brochures, videos, and official web site, etc,).
In terms of the former type, two studies are notable. One study was a survey
administered to the community residents on the services most likely to be used at
ALPHA; the other study incorporated the 1990 U.S. Census and other sources for
information on the existing community programs and facilities in the area. Both
researches were completed in March 1993. Table 5.1 is a summary of the survey
results:
Table 5.1 Summaries of the 1993 Survey Results
The services most likely to be used at the AAUC
1) Job Training 58%
2)
Business Training 51%
3) Food & Clothing 44%
4)
Music 43%
5)
Reading 42%
6) Language Skills - Spanish 42%
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119
Table 5.1 Summaries of the 1993 Survey Results (continued)
7)
Senior Citizen Program 39%
8)
Drama 38%
9)
Speaking Skills 35%
10) Counseling 34%
11)
Math 33%
12) Writing 32%
13) Language Skills - English 32%
14) Parenting 29%
15) Lecture Series 27%
16) Preschool 22%
Note. From “ALPHA Progress Report,” March 17, 1993.
The analysis of the 1990 census data also revealed the needs of the
community for programs such as the economic development program, the child care
center, the food service program, and the cultural enrichment program (ALPHA
Progress Report, 1993).
In terms of the latter, the founding executive director took the initiative to
develop ALPHA’S first brochures and organizational video to introduce ALPHA and
its programs to the public. With the technical support of a nonprofit partner agency
and the financial support from its umbrella organization and other corporate
sponsors, ALPHA also created its own quarterly newsletter in 1996. Named ALPHA
National Times, this newsletter had been published for four issues before it was
stopped for some reasons in 1997.
The creation of the organizational web site became a concern of
organizational decision makers in recent years. ALPHA used to have a link page at
the official web site of its umbrella organization, the community fund-raising
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organization where ALPHA’S board chairman served as president, but that page was
always “under construction” and no information was available there. The second
executive director, during his short-term tenure at ALPHA, decided to launch
ALPHA’S own official web site, and took efforts to register a domain name for it.
However, this official web site was still “under construction” by the end of the study
period. In other words, the organizational web site as a communication channel in
and around the organization was virtually blocked.
5.1.2 Direct Communication Channels
The direct communication channels in ALPHA included community
meetings, staff meetings, board meetings, and informal conversations.
(1) Community meetings. On these meetings, dozens of residents in this
neighborhood were invited to voice their needs and concerns and offer their
comments and suggestions. Although no written records are available for these
meetings, all interviewees who had been with ALPHA since its inception pointed out
that this form of communication had been used quite often during its early days,
especially during the first year.
This tradition, however, was eventually reduced to an almost annual event,
which usually happened before ALPHA’S annual celebration - a festival-type of
event that needs support from residents in the neighborhood. At the last year of my
study period, ALPHA re-established its relationships with the block clubs in the
neighborhood; as a result, community meeting were activated again and were held
almost every month to discuss the community issues. It should be noted that
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although ALPHA provided spaces for as well as participated in these community
meetings, it was the block clubs rather than ALPHA that initiated and organized
these meetings.
(2) Weekly staff meeting. This format provided staff members the
opportunity to share opinions on and experiences in existing programs, and to clarify
problems and find out solutions. Again, no written records are available, but the
interviews showed that weekly staff meetings were held at ALPHA on a regular
basis until 1997 when staff members were so heavily involved in different programs
at different sites that it became difficult for everybody to get together every week.
The staff meetings were then held on a biweekly basis on every payday till the
executive director resigned in December 1999. The second executive director, who
came into the position in June 2000, switched the staff meetings back to the weekly
basis.
(3) Board meetings. ALPHA bylaws require that board meetings be held on
a quarterly basis. Board members met and listened to reports from the executive
director’s report and other reports by different board committees. They made
important decisions on fundraising, personnel and finance issues, but delegated to the
executive director the authority to submit proposals to all potential funding sources.
In the early years of ALPHA, board meetings usually took place at ALPHA; from
time to time, the staff members would march into the conference room where the
board met, and the staff and the board would be introduced to each other. Although
the communication between the board and the staff members (other than the
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executive director) was still quite limited and was mainly top-down (Taped Interview
# 03; Taped Interview #08), at least it provided an opportunity for both parties to
meet face-to-face. During the same period, the executive director also implemented
an advisory board to get community representatives and staff members involved.
These practices, however, faded away in a few years.
(4) Informal conversations. In the early years of ALPHA, the founding
executive director and his staff used to walk down the street and pay door-to-door
visits to residents in the neighborhood. Moreover, office spaces were provided to
block clubs in this neighborhood and to several other community groups, which also
seemed to facilitate the communication between the organization and the
community.
Although it was not very clear as to exactly what synergetic benefits such
informal conversations might provide (e.g., new issues brought out through these
conversations; new programs inspired by these conversations), there is some
evidence showing that these conversations could be fruitful. For instance, the
conversations between the founding executive director and block club members led
to the recruitment of the block captain as ALPHA’S very first program director. The
block captain volunteered for this position for a short period of time before she
quitted and went on with another direction of her career (Taped Interview #10).
Moreover, the snow trip project - a recreational event designed for kids in the
neighborhood that was carried out annually from 1993 to 1997 - was funded through
a block captain’s personal network, ALPHA’S internal resources, and some corporate
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123
sponsors, but was mainly administered by block club members (Taped Interview #3).
It is very likely that this collaborative effort between multiple parties was a product
of these informal conversations.
Yet these types of informal conversations suffered the same fate as other
direct forms of communication. In just a few years, the block clubs no longer had
their offices at the Center. The succeeding executive directors - in fact, even the
founding director during the last few years of his tenure - no longer took home visits
to residents in the community.
5.1.3 Breakdown of Communication Channels and Mentality of Leadership
One of the most important merits of the direct channels of communication is
that they allowed more constituents (e.g., staff, volunteers, residents in the
neighborhood) to participate in the decision process and exchange opinions with
decision makers and with each other; by contrast, the indirect communication
channels were top-down, one-way approaches that did not provide constituents with
the opportunity to exchange ideas with each other, although they served as useful
information sources for funders as well as for the community.
It appears that the first four or five years were ALPHA’S “honeymoon” with
the community, when almost all the communication channels were created and well
maintained. As the organization continued to grow, both types of communication
channels eventually were either abandoned or reduced in use despite their merits.
We are not sure about the reasons for the breakdown of these communication
channels, but this change might be partly due to the fact that organizational decision
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makers were preoccupied with managing an increasing number of programs and
were facing tighter time constraints.
Another possible reason behind the breakdown of communication channels,
however, might lie in a “superior” mentality that some leaders of ALPHA shared
toward constituent input in organizational decision-making. The mentality of the
leaders is exemplified by the following remarks made by an interviewee who had
been working very closely with the board chairman:
When you’re in the position of leadership, be a board member or [be
an executive director], you have to take certain positions that the
community or your follower or your constituencies do not understand,
but you are hoping that down the road, they will see the light.. . .
The leader will have to disregard all those influences [from the
community or the constituencies] and keep focus on his agenda.
(Taped Imterview #5)
On another occasion, this interviewee described the relationship between the board
chairman and the organization as one between parent and child. Inherent in such a
mentality is the belief that a leader possesses certain knowledge and expertise that
his followers do not have, and that the leader should make his independent judgment
as to what is in the best interest of his constituents and the larger community. This
“superior” mentality echoed a trustee view of representation that was introduced in
Chapter One.
Not every leader in ALPHA shared this “superior” mentality. The third
executive director, who came into position in 2001, seemed to take a different view
toward the community. As this executive director expressed in one of the interviews,
she always wanted the support of the community on her work at ALPHA, and she
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125
made efforts to “take the consideration of the community” in her every move in
order to truly represent them (Taped Interview #1). Her awareness of the importance
of community input is indicated in her following words:
[L]isten to the community. Being intuitive to the community. You
have to be observant, you have to know, [and] you have to pay
attention.. . . You see what you see, you know what you know, and
if you talk to the community they’ll tell you the truth” (Taped
Interview #9).
With such a community awareness, she also cherished the value of the diversity in
the community, calling for the need to “put different visions together to complement
each other” by “working with the block clubs and different collaborative partners”
(Taped Interview #1).
Thus, the mentality of the current executive director seemed to be closer to a
delegate view of representation than to a trustee view. This “delegate” mentality was
further explicated in her following remarks:
[We are] in the business of being accountable. We have to be
accountable to our funders; we have to be accountable to the
community we serve; and we have to be accountable to one another.
(Taped Interview #1)
In another interview, she reiterated that she as the executive director was not merely
accountable to the board but also to the employees and to the community, and
pledged that ALPHA would “always be responsive to the community” (Taped
Interview #9).
Whereas the “superior” or “trustee” mentality of the board chairman and a
few other leaders was inclined to downplay the importance of constituent input and
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126
emphasize the value of independent judgment, the “delegate” mentality of the
current executive director tended to be more in favor of community involvement.
Given the “delegate” mentality of the third executive director, it seemed to be not
just a coincidence that the communication between the organization and the
community began to improve upon her arrival. Community meetings once again
took place at ALPHA on a regular basis, and the executive director was talking about
the publication of organizational newsletters (Taped Interview #5). This was just a
start, but the organizational leadership became aware that there were a lot of things
that ALPHA had been doing but the community did not know, and that there was a
need for the community to be informed of what was going on with this organization.
Due to the lack of records on the above four direct communication forms, the
network of issues that evolved from them is not available. Although we can get a
feel for a sketchy picture of the network of issues that evolved from constituent
participation and communication based on the community needs assessment studies,
these identified issues are far from complete and it is not clear as to how well these
issues reflected the most urgent needs and concerns of the community during the
study period. Note that these issues that were identified or developed during the
converging phase would not be addressed until a policy window was open, as will be
discussed in the following section.
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5.2 The Screening Phase
According to the attention-based view of nonprofit organizations, once a
“policy window” is open, the streams, now a complex network of issues, would flow
into the second phase - the screening phase. The case study findings illustrated how
the evolving pattern of governance structure joined other contextual variables such as
“policy windows” (i.e., funding opportunities and “focusing events”) in influencing
the configuration of ALPHA’S organizational attention structure, and in turn helped
screen some issues into the decision-making process but screen out others. In the
remainder of the chapter, I will provide a more detailed discussion of the findings
related to the two groups of factors, respectively.
5.2.1. Governance Pattern and Organizational Attention Structure
The findings from this case study indicated that over the years, ALPHA’S
governance pattern evolved from a strong, non-community board to a weak, non
community board. The findings also suggested that there appeared to be some
difficulty in getting access to the organizational decision-making process on the part
of employees, volunteers, clients, and community residents, which might discount
the ability of the organization to respond to the needs and concerns of these
constituents. In the following sub-sections, I will first present the findings on the
evolution of ALPHA’S governance pattern during the study period, followed by the
findings on the effects of governance patterns on two of the four categories of
organizational attention structure: players and resources.
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5.2.1.1 Evolution of Governance Pattern of ALPHA
During the study period, ALPHA had gone through an evolution of
governance patterns; that is, it seemed to have “silently” evolved from a strong, non
community board to a weak, non-community board over time.
In terms of board composition, most of the founding board members had
stayed with the organization by the end of the study period; in other words, there had
been no significant change in ALPHA’S board composition from 1991 to 2001.
According to the survey questionnaire completed by the third executive director,
ALPHA had a total of twelve members by the end of 2001. All the twelve board
members were identified as corporate, professional, and social elite, and none was
identified as community representative.1 Remember that in Chapter Three I
measured strong “community representation on board” as inclusion of thirty-four
percent or more community representatives (i.e., staff members, volunteers, clients,
residents in the neighborhood, etc.) in the board. Based on this criterion, the
ALPHA board composition reflected a lack of community representation during the
study period.
In terms of board power relative to chief executive, the findings indicated
that the ALPHA board had evolved from a strong one that dominated the chief
executive to a relatively weak one. In the early years of this organization, the
ALPHA board, particularly its chairman, was widely perceived as having strong
power over the chief executive and staff. As one interviewee described, the board
chairman, who is a prestigious leader in the African American community and whose
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influence has been recognized both locally and nationally, founded this organization
and ran it with “iron fist” (Taped Interview #8). Another interviewee added that the
board chairman was “very active and aggressive in lending his support to ALPHA in
all areas, especially in acquiring funds (grants), and in suggesting areas of
improvements and new programs” (Taped Interview #6).
By the end of the study period, however, board power was weak in this
organization as perceived by the executive director in the survey." In addition, the
survey questionnaire also showed that only two board meetings were held in the year
2001 - another indicator of low degree of board involvement in organizational
decision making; by contrast, in the early years of ALPHA, board meetings were
held almost every month.
Combined together, the findings indicated that the early pattern of ALPHA’S
governance structure fell within the category of “strong, non-community board”, but
this pattern evolved into a weak, non-community board at the end of the study
period. At its first glance, this “non-community board” label appeared to be at odds
with the perception of many employees and residents in the neighborhood. In fact,
some individuals responded to this question during the interview by arguing that if
community be defined broadly as “people who live in South Central Los Angeles” or
“people who live in the City of Los Angles”, then the ALPHA board could be
regarded as having community representation (Taped Interview #7; Taped Interview
#9). For the purpose of this study, I still use the narrower definition and regard
ALPHA board as having no community representation.
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This evolution was a bumpy road, interrupted by two executive turnovers
when the board re-gained (or re-utilized) its power and influence to help the
organization go through the transitions, but eventually it would delegate the authority
in organizational decision-making to the executive directors. The first executive
turnover, as signalized by the sudden resignation of the first executive director in
1999, reflected such a subtle evolution of governance patterns in ALPHA. In the
earliest years upon its founding, ALPHA was featured by its strong management
control by the board, and particularly by the board chairman. With a Master degree
of Public Administration and extensive professional experiences with public and
nonprofit agencies, the founding executive director was hired by the board to
develop and implement programs for this organization. In a few years, he
demonstrated a strong capacity in program development, community relations, and
government relations, and helped ALPHA grow quickly from a small community
organization into a multi-million dollar human service agency. As his personal
power and influence grew with this organization, tension rose between the executive
director who asked for more autonomy and the board chair who wanted to remain
control, which eventually led to his resignation.
In spite of the tension between the founding executive director and the board
chair over the control of the organization, the delegation of power to the executive
director appeared to be an intentional move by the board, which was made clear by
the following remarks of an interviewee who had been working very closely with the
board chairman,
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[T]he chairman's role at present is different that it was in the past.
Now that role is more ceremonial and hands-off. Whereas the
chairman had been very actively involved in the past, at present it is
like “call me if you need me.” ALPHA is now an adult and it can
operate independent of a parent's supervision. (Taped Interview #7)
5.2.1.2 Effect of Nonprofit Governance on Players
In terms of the effect of governance pattern on players, the case study found
that employees, volunteers, clients, and community residents appeared to have
difficulty getting access to the organizational decision makers of ALPHA, which
involved a non-community board.1 1 1 For example, only very few employees were
able to know more than a handful of board members in person, nor did they have the
chance to attend any of the board meetings (Taped Interview #3). Therefore, it is not
at all surprising to hear some employees saying such words as “I am not sure I could
identify [board members] if I saw them walking into the agency” or “[i]t appears in
this agency, they want to keep [board members] identifiable to only a few people”
(Taped Interview #2). The lack of access to organizational decision makers seemed
to have discouraged employees from actively participating in organizational affairs.
As an employee expressed in the interview, she was not willing to let the board know
any advice she might have “because things usually fall on deaf ears” (Taped
Interview #2)!
Volunteers, clients, and community residents also shared the same
sentiments. As in the case of proposed community rally against ALPHA, the block
captains and other representatives of the neighborhood were not even clear exactly
who were sitting on the ALPHA board of directors and whether there was anyone on
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the ALPHA board representing this community (Taped Interview #5), not to mention
getting access to these members. Moreover, the call of neighborhood residents for
more community representation on ALPHA board during the community rally
provided supporting evidence in the sense that people in the community felt that they
would gain more access to organizational decision makers and have more trust on
them if higher community representation could be reflected in board composition.
The findings also showed that more board members were active players in
the organization during its early days when ALPHA had a strong board. The higher
level of involvement was partially evidenced by the number of cases in which a
board member other than the chairman was identified as being involved in getting
funding for this organization during the early years. Among the one hundred and
one funding opportunities that were identified during the study period (as I will
discuss in more detail in the following section), only six were identified as being
associated with a board member other than the chairman, and all six of them had
occurred by 1995.
Moreover, board members were not only more likely to stay active during the
early days of ALPHA, but also helped motivate new players through recommending
volunteers and employees to the organization. For example, the lady who had been
an active player in initiating and coordinating community arts programs was in fact
recommended to the chief executive by the board chairman even before the
organization officially started in 1992.
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5.2.1.3 Effects of Nonprofit Governance on Resources
In the case of a non-community board, the findings seemed to paint a
complicated picture as to the manner in which ALPHA responded to local funding
opportunities versus state/federal funding opportunities.lv On the one hand, the
findings provided evidence that board linkages facilitated an organization’s response
to local funding opportunities. The majority of ALPHA’S board members had either
directly funded the organization’s programs or helped the organization obtain
support from local funding sources. They had also been active players in local
politics and developed a close relationship with the senior-level local government
officials. One example of this board linkage was the long-term friendship between
the board chairman and one of the key leaders of the County government. ALPHA
once presented its Soldier of Service Award to this government leader (ALPHA
National Times, 1998), who clearly had (at least shared) decision power on several
programs that were awarded to ALPHA. In addition to the board chairman, some
other board members also helped this organization obtain local funding. A board
member, who was on the senior management of the United Parcel Services (UPS),
might have played a role in facilitating ALPHA to obtain a grant from the UPS for
the renovation of child care center project in 1993. Another board member who was
the vice president of the Motown Records might also have helped ALPHA obtain a
grant from Berry Gordy for its Center of Performing Arts.
On the other hand, the findings also provided some evidence that resources in
the form of board linkages might also be effective in co-opting the federal and state
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funding agencies. The vocational training and employment program that was
applied and funded in 2001 offered a perfect example of how the board chairman
helped this organization obtain the state grant with his personal connections. As
explained by the third executive director during the interview,
I wrote a good proposal, but [the board chairman] knows the governor
directly. People use his leverage and his relationship. We don’t get
this grant because of [the board chairman], and I’m sure it helps by
writing a good proposal and now delivering a good program.. . . But
people need to look at networking and relationship. (Taped
Interview #9)
A review of the ALPHA documentation showed that network ties had also
been developed with politicians and senior officials at federal level. For example, a
senior official from one federal department was honored by ALPHA with its Soldier
of Service Award (ALPHA National Times, 1997); later this year ALPHA was
awarded a half-million-dollar contract from the same department. Since the
possibility of the network ties’ influence on obtaining federal/state funding cannot be
excluded, the value of board linkages in fund raising might be applicable to the
federal/state funding opportunities as well.
The above findings associated with the role of board linkages in
obtaining organizational resources seemed to imply that the organizational attention
structure of ALPHA was biased toward responding to those funding opportunities to
which it was able to gain access through its board linkages. Despite their
importance, those issues initiated by community representatives would be less likely
to get the attention of organizational decision makers if they were not bundled with
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certain funding opportunities. For instance, as one interviewee pointed out during
the interview, there was always a serious concern by residents in the community
about the youth-related issues (e.g., lack of education and high intensity of gang
activities). As early as 1993, some residents suggested that ALPHA develop youth
programs such as after school youth program. However, youth programs had not
become the priority on ALPHA’S organizational agenda, partly due to ALPHA’S
lack of slack resources and partly due to the shortage of expertise and networks on
the side of community representatives that would enable this organization to get
access to new funding for youth programs (Taped Interview #3).
Put differently, it can also be said that due to the lack of board linkages with
the community, it would be more difficult for organizational decision makers to hear
the concerns of community representatives and address the issues raised by those
representatives. Lacking community linkages on its board, the organization lost
valuable resources in terms of local knowledge, as it became difficult, if not
impossible, for rank-and-file employees, volunteers, clients, and neighborhood
residents to get their voices heard by people sitting on the top of the organization.
5.2.2 Policy Windows and Organizational Attention Structure
Two major types of “policy windows” - funding opportunities and “focusing
events” - are commonly observed in nonprofit organizations. In the following sub
sections, I will present the case study findings on how these different types of
“policy windows” increased the availability and saliency of certain issues and called
for decision-makers to attend to these issues.
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5.2.2.1 Funding Opportunities
A total of one hundred and one responses to funding opportunities were
identified for ALPHA under this type of policy window/ Among these funding
opportunities, fifty-eight of them came from government funding sources (i.e.,
federal, state, and local governments), accounting for over 57% of total funding
opportunities; forty-three of them came from private funding sources (i.e.,
individuals, corporations, foundations, and community fund-raising organization,
etc.), accounting for less than 43% of total funding opportunities. Taking the grant
amount into consideration, government funding then becomes the predominant
group, with federal and state funding alone accounting for a total of nearly 9 million
dollars.
Funding opportunities affected the attention structure of ALPHA in two
ways: First, they were potential resources necessary for the organization to address
certain issues in the community. As discussed in Chapter Two, funding
opportunities represent certain issues - a certain combination of problems and
solutions - in the community, coming together with necessary resources to address
these issues. Following is a summary of issues reflected in ALPHA’S responses to
funding opportunities (see Table 5.2):
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Table 5.2 Issues Reflected in ALPHA’S Responses to Funding Opportunities
(1992 - 2001)
Issue Number of Proposals/Initiatives Addressing This Issue
Business Development 4
Child Care 2
Community Arts 17
Community Technology 1 1
Education 10
Emergency Rescue 8
Facility Renovation 5
Job Training and Development 17
Youth Problem 14
Other Community Issues 13
Total: 9 101
More often than not, the organization responded to these funding
opportunities not because the issues dictated by these funding opportunities were
more important or more urgent than others, but due to the feasibility of resources. A
comparison between the issue network developed during the converging phase of the
decision making process (see Table 5.1 for a partial list) with the issues to which
ALPHA actually responded (see Table 5.2) has shown that many of the issues
deemed as important by the community during the converging phase had failed to
attract the attention of organizational decision makers during the screening phase.
For instance, despite their high importance scores given by the community, such
issues as “business training”, “reading”, “language skills”, and “senior citizen
program”, had barely been responded to by the organization.
Second, many funding opportunities, particularly those from government
funding sources, tended to re-emerge on a regular basis, thus helping establish
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certain rules of game (in the form of historical precedents) for the organization in
response to issues in the community. The study observed the repetitive appearance
of the same or similar proposals (or initiatives) before the regularly occurring
funding opportunities, suggesting the tendency of decision makers to follow
historical precedents in response to numerous funding opportunities. Among the one
hundred and one funding opportunities that ALPHA responded to during the study
period, most of the proposals (or initiatives) are found to have appeared at least
twice, some came out as often as ten times. For example, the “tobacco program”
proposal appeared four times from 1998 to 2001; the “snow trip” proposal appeared
five times from 1993 to 1997; and the “neighborhood concerts” proposal appeared
eight times from 1994 to 2001. While the majority of these repetitive proposals (or
initiatives) were made in response to the same funding source that provided funding
opportunities on a regular basis, many of them were same or similar proposals (or
initiatives) responding to different funding opportunities. For example, ALPHA’S
“waiter/waitress program” initiative was first sponsored through private funding
sources (primarily through a community fund-raising organization), it later
approached and was funded by the City of Los Angeles through its Community
Service Block Grant (CSBG) program.
Thus, through providing feasible resources and establishing historical
precedents, public funding agencies seemed to have effectively removed the
decision-making power of the organization in terms of which issues should be given
the priority on organizational agenda.
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S.2.2.2 “Focusing events”
Five “focusing events” have been identified through the analysis of the
interview and archive data (see Table 5.3). In contrast to funding opportunities,
focusing events took a variety of forms, including events at larger-community-level
(i.e., civil unrest, earthquake), neighborhood level (i.e., community rally against
ALPHA), as well as organization level (i.e., shooting, thefts).
Table 5.3 Focusing Events (1992-2001)
Focusing Event Time Issues Emerged from the Event
Los Angeles Civil
Unrest
April 1992 • Emergency rescue
• Job training and employment
Northridge Earthquake January 1994 • Emergency rescue
• Disaster recovery
Community Rally January 2000 • Representation of the community on
ALPHA staff
• Representation of the community on
ALPHA board
• Communication between ALPHA
and the community
• Programs addressing urgent
community needs
Community Thefts July and
September 2000
• Security issue
• Upgrading of office equipments
Community Shooting August 2000 • Security issues
Next, using these focusing events as examples, I will illustrate how they
forced this organization to be responsive to the issues brought out by those
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“politically disadvantaged groups” such as employees, volunteers, and residents in
the neighborhood.
Los Angeles Civil Unrest and Northridge Earthquake. These two events
share two characteristics. First, they both were disaster-type of events; second, they
occurred at the larger community level and impacted far more than just the
organization and the small neighborhood where the organization was located.
Civil Unrest. From April 29 to May 1, 1992, Los Angeles witnessed an
outbreak of rioting that led to the loss of more than 50 lives, thousands of arrests, and
almost a billion dollars in property damage (Chung, 2001). The civil unrest of 1992
provided the very first opportunity for ALPHA to demonstrate its capability of
providing needed services and to increase its visibility in this community. As an
earlier study (Coston et al., 1993) describes,
As early as the second day of unrest [Thursday], a city councilman
advertised [ALPHAJ’s phone number on a local radio hotline for
people interested in providing assistance. By the weekend, outside
help began to arrive for cleanup activities. On Monday [ALPHA]
began receiving truckloads of goods [food and personal items] from
various grocery chains.. . . [It] soon became overwhelmed with
lines of people in search of these supplies, (p. 362)
The social unrest highlighted the urgency of the issue of emergency rescue in
the form of basic needs. In the following months, the ALPHA distributed food and
clothing to over 85,000 persons; provided more than 10,000 furniture items; and
recruited over 3,000 volunteers. Its quick response and timely service gained the
trust from both the community residents and the local government. This service,
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called “Emergency Rescue Unit” and funded by City of Los Angeles and FEMA,
was actually the first major program the ALPHA ever had.
The disaster nature of the social unrest and its huge impact on the larger
community also helped bring quickly the issue of basic needs in the community onto
the top of the agenda of policy makers at federal, state, and local levels. As a
response to this issue, many funding opportunities - from public and private funding
sources - became available shortly after the social unrest. Catching this perfect
timing, ALPHA was then able to develop its second program, the Neighborhood To
Neighborhood (NTN) program, which was a food distribution program funded by
City of Los Angeles as part of its Rebuilding LA initiative. A group of young
people, many of whom were former gang members, started volunteering at ALPHA
after the social unrest. The NTN program provided a chance for these young people
to continue their work at ALPHA and get paid for their work (Un-Taped Interview
#7).
Northridge Earthquake. On January 17, 1994, the Northridge Earthquake
struck the Los Angeles area. This magnitude 6.8 earthquake resulted in roughly 72
deaths, more than 11,000 injuries, and $13 to $25 billion in damage (Los Angeles
Times, January 22, 1998: Al). Like the Civil Unrest, the Earthquake once again
created the momentum for ALPHA to demonstrate its capability of providing needed
services, and ALPHA once again became the star of the community in emergency
rescue. The following excerpt from the interview with one of the paid employees
vividly illustrates the situation,
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Diesel trucks began to deliver again, same thing just like the civil
unrest... Diesel trucks from all over came and started to deliver food
and we were having volunteers again.... People from over all the
country were delivering and dropping off water and pampers,
furniture, mattresses, you name it.... The whole center was filled to
the roof, the ceiling. So every day or every other day we gave out
bags of groceries. (Taped Interview #3)
Two things are worth mentioning here: First, as demonstrated in both events,
policy makers, organizational decision makers, and people in the community learned
the situations virtually simultaneously, and the emergent, disastrous feature of the
events made it easier for different parties to reach consensus upon which issues
should be placed as the priority on organizational agenda. Therefore, these focusing
events helped the organization quickly respond to the most urgent issues in the
community.
Secondly, such larger scale events often would raise a number of issues. For
instance, the earthquake in 1994 not only raised the urgent issue of basic needs (i.e.,
food and clothing), but also brought attention to the issue of facility renovation for
earthquake damages, and created some funding opportunities to back it up. While
the community residents might not be able to attend to this issue as fast as the issue
of basic needs provision, the organizational decision makers were very quick to grab
the available funding opportunities and respond to this issue. As a result, over a
million dollars from both public and private sources were received by ALPHA for its
renovation projects in the following year.
Community Rally against ALPHA. This event occurred in January of 2000,
shortly after the resignation of the founding executive director. A group of block
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club leaders and other community activists rushed into the organization and handed a
letter to the executive consultant who was tentatively in charge when ALPHA board
was searching for a new executive director. These community representatives
voiced their concerns and threatened to “call upon the elected officials to join . . .
concerned citizens for a community protest to stop this ripping off of the
community” by ALPHA and its leadership (53rd Block Club, 2000). Their concerns
included: (1) Lack of representation of the community on the ALPHA staff; (2) lack
of representation of the community on the ALPHA board of directors; and (3) lack of
communication between ALPHA and the community; among others. They
demanded that office space be provided for senior citizens to give anger management
classes for the youth in this neighborhood; that regular meetings between ALPHA
and the community residents be held at a monthly basis; and that a member of this
community be included in ALPHA board.
The message was forwarded to the board and, as a result, a few rounds of
meetings were called between the community representatives and the ALPHA
leadership. The ALPHA board, particularly the chairman, agreed to provide office
spaces for the block clubs, but was reluctant to include any of these community
representatives on the board of directors or on the advisory board (Taped Interview
#4). The negotiation went into a deadlock, and the community representatives
decided to take action.
A dramatic change then took place. As a block captain and organizer of the
proposed community rally recalled, she received a “freeway” call from a board
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member of ALPHA the night before the scheduled community rally. The board
member, who had been working closely with the board chairman, promised her that
their concerns and requests would be seriously considered as long as she could call
off the community rally:
The promise was that they are going to include us and we could have
our meetings wherever we want to, and they will be discussing with
us later about being on the board of directors [and] the advisory
board, if I could call that march off, which I had a hard time to do....
So I had to tell my members . . . [and] called the march off. After
(that) we did meet with the ALPHA board... They still said that they
are looking into it. They made some commitments that they are
going to include us. (Taped Interview #4)
In response to the community representatives’ complaints about no
community representation on ALPHA board of directors, the board went through the
board member list with the community representatives and demonstrated that there
indeed were a couple of community activists on the ALPHA board. Although the
board’s definition of “community” was obviously broader than that of the block
clubs who were primarily concerned about the neighborhood where ALPHA was
located, it nevertheless weakened the position of the block clubs in the negotiation.
The board later made some commitments to eventually include these community
representatives in the organizational decision making process, and finally settled the
matter.
The proposed community rally against ALPHA highlighted the problem of
lack of communication between the ALPHA leadership and the community. The
organizational decision-making process was in a “black box” and people in this
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community felt that they were closed out and became disappointed with the situation.
This feeling was evident from the response provided by the block captain during the
interview:
Many times we do not get information from [ALPHA] due to the fact
that we have nobody from [ALPHA] passing this information out.
Very little [communication].. . . It was closed to the community
because the community never gets the information about what’s
going on.... We asked why can’t they put a meeting once a month
or twice a month to let us know what’s going on. (Taped Interview
#4)
Lack of communication was behind many of the issues that these community
residents raised. The Performing Arts Center is an good example. The community
residents knew that the board chairman promised the development of the Center six
or seven years ago and that ALPHA obtained millions of dollars from public and
private funding sources for that purpose, but nothing seemed to have happened there;
therefore, they had a concern over this project and suspected that there might be a
misappropriation of funds. The leadership of ALPHA dismissed this suspicion as
unfounded, arguing that
[M]any people do not understand the development process of the
[performing arts] Center. ALPHA got the money from [various
public and private funding sources], [but] in order to [build the
center] you have to go through certain steps with the City and with
the historical conservation people.... It takes several years to reach
the compromise.. . . The community wasn’t familiar with the
politicking. (Taped Interview #5)
Compared with the disaster-type of events occurring at the larger community
level, this neighborhood-level event had less impact beyond the neighborhood, and
thus could hardly grab media attention and reach the agenda of policy makers.
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Moreover, it became more difficult for different parties to reach consensus as to
which issues should be placed on top of organizational agenda. Therefore, it
provided organizational decision-makers with more room for negotiation and
provided “politically disadvantaged groups” with less leverage to bargain with the
organization.
Community Thefts and Shooting. The findings on the effects of community
thefts and shooting were discussed together, not only because they occurred
sequentially within a very short period of time (three months), but also because they
all occurred at the organization level and had little impact beyond the organization.
Community Thefts. The first community theft took place in July of 2000,
followed by a second community theft in September. ALPHA lost all its computers
and other equipments in the service building in the two community thefts.
The staff and clients were very dismayed by the thefts because the classes
and services to the community were interrupted until the equipments were replaced
(Taped Interview #6). Their feelings were well reflected in the words of an
employee during the interview:
I was devastated by the theft.... I was so hurt and sad. It was
personal for me, because I believe that we try to do so much for the
community, even our own time and money and cars sometimes. I
couldn't believe that someone could wreck the facility like that.
(Taped Interview #2)
Some staff members also felt that they should be given the opportunity “to express
their feelings because it felt like an act had been perpetrated upon (them) personally
at (their) home” (Taped Interview #2).
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Community Shooting. The community shooting took place in early August
of 2000, right in the middle of the occurrences of two community thefts. The
community shooting was due to a fight between two street gangs. Some gang
members broke into the administration building of ALPHA and fired a few shots;
fortunately, nobody in this organization was hurt or killed in the shooting. As one
employee recalled during the interview,
The shooting was very frightening! Over the months I have been here
there have been some shootings in and around the Center, but nothing
so close and so frightening.... [One thing] that was horrible was
being locked down, for hours while the investigation was ongoing.
The outside doors were locked to keep people from coming in, but it
felt so stressful being physically locked in. (Taped Interview #2)
The community thefts and shooting were like localized, organizational
version of those disaster types of events: they were sudden, unexpected, and
grabbing the attention of the staff, volunteers, and organizational decision-makers at
the same moment. The intensity of pressure from people inside the organization
made it relatively easier for all the parties to agree upon the most urgent issues under
this situation. In this case, the three events brought the attention of the decision
makers to not only the security of this organization but also the safety of people
working, volunteering, and being served in this organization. Although the security
and safety issues had always been a concern of staff members and volunteers
working for this organization, not enough attention was given by the management to
this issue before. After these community thefts and shooting, employees once again
raised the concern that security needed to be beefed up. This time the management
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was quick in responding to the issue being raised: a team of mental health specialists
was called to talk to the staff about their concerns and fears for safety; armed
security guards were hired for about several months; a breakfast/peace meeting was
organized amongst the people who were involved in the community shooting; and
security measures (i.e., video monitors, and screen doors) were implemented upon
both administration and service buildings of ALPHA.
5.3 Discussion of the Findings
The case study has helped illustrate the attention-based view of nonprofit
organizations and offered a number of interesting insights in terms of substantive
representation in nonprofit organizations:
First, the case study found that the level of constituent participation in the
converging phase varied over the years, and suggested that the divergence of
organizational decision makers in their mentalities toward constituent input might
play a role in determining the extent to which communication channels were offered
to employees, volunteers, clients, and residents in the neighborhood. The “superior”
or “trustee” mentality of the board chair and several other organizational leaders
seemed to serve as a partial reason for the breakdown of various communication
channels over the years after the initial surge of community involvement; the
“delegate” mentality that the current executive director appeared to hold might also
explain the resurgence of constituent participation through various communication
channels.
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The study has provided some support to the notion that there exists a link
between descriptive representation and substantive representation. It has illustrated
how a non-community board was associated with the lack of attention of
organizational decision-makers to voices and concerns of various constituents. Due
to the limitation of single case study, we have little to say about what would be
happening if an organization had a community board (particularly a strong one).
Yet, findings from the case study showed that there was a call from the grassroots for
a more descriptively representative governing body in order to improve the
communication between the organization and the community, alluding to the
existence of such a linkage. This was evident from the responses provided by some
of the participants, like the one that follows:
I believe that the [ALPHA board] should make efforts to include
representatives to reflect the community’s needs and interests. This
agency, I felt was here to address the needs of the community so why
not make it truly representative? (Taped Interview #2)
The study has also indicated that the link between descriptive representation
and substantive representation is not straightforward. Instead it is contingent upon
various environmental and contextual factors. The study has illustrated the
contrasting effects of two groups of contextual factors - funding opportunities and
“focusing events” - on organizational responsiveness. Particularly, evidence from
the case study has suggested that funding opportunities, most of which come from
different levels of government, have played an important role in determining
organizational responsiveness to issues in the community. The attractiveness of
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these funding opportunities as a predictable source of revenue, and myriad rules and
regulations that come with them, have required organizational decision-makers to
devote their time and attention and fight hard to gain financial success. Their
experiences and achievements, however, might possibly be turned into a
“competency trap” (Levitt & March, 1988) or “success trap” (Levinthal & March,
1993). Having competence in the delivery of the same type of services in response
to the same issue in the community (as reflected in the recurring funding
opportunity) leads to success, which leads to more experience with the same issue
area, which in turn leads to greater competence. As a result of this positive local
feedback, organizational decision makers become focused on well-known
alternatives (or issues), underestimating the potential benefits of the unknown
(March, 1994, p. 38). As the executive director stated in one of the interviews, “I
look at proposals as a way of expanding our existing programs” (Taped Interview
#9). This narrow focus, while being effective in building organizational expertise in
certain issue areas, might eventually run into trouble when it is called to respond to
other urgent issues in the community.
Moreover, during the process of gaining financial support from external
funding agencies on terms dictated by these funding agencies and their definitions of
community needs and interests, the organization eventually lost its community
outreach and independent views of what needs to be done in the community.
Rosenbaum (1981) labeled this consequence as the “weakening of the voluntary
impulse” in his discussion of the impact of government funding (p. 86). He argued
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that although government perceptions are not necessarily inaccurate or misguided,
they hurt community initiatives, as nonprofit organization might be viewed by
citizens as irrelevant to their needs and concerns.
5.4. Summary
The decision-making process described in the case study is not assumed to be
representative of the decision-making process in all the nonprofit organizations.
Rather, the purpose of this study was to use evidence gleaned from it to gain a better
understanding of the dynamics leading to the selective responses of nonprofit
organizations to different issues in the community.
The case study has provided empirical evidence to illustrate the attention-
based view of nonprofit organizations presented in Chapter Two. The study has
suggested that the divergence of organizational decision makers in their mentalities
toward constituent input might play a role in determining the extent to which
communication channels were offered to employees, volunteers, clients, and
residents in the neighborhood. Findings from the case study have also suggested
that there appeared to be a link between descriptive representation and substantial
representation in ALPHA, but this link was contingent on a set of environmental and
contextual factors. The study has illustrated the contrasting effects of two types of
contextual factors - funding opportunities and “focusing events” - on the
organizational responsiveness of ALPHA to issues in the community. While funding
opportunities tended to reduce organizational responsiveness through pre-defined
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issues and pre-guaranteed funding availability, “focusing events” tended to increase
organizational responsiveness by diminishing the advantages of funding agencies
and organizational decision-makers in framing issues in the community.
In next chapter, I will discuss the combined findings from the survey and
case study components, followed by discussions of the contribution of this
dissertation, its theoretical and policy implications, as well as directions for future
research.
I Among the twelve members, six o f them were identified as being “board member or executive o f a
corporation, foundation, and/or a financial institution (e.g., a bank)”, two were identified as being
“board member or executive o f a nonprofit organization”, one was identified as “attorney”, and the
rest were identified as being “other professional (e.g., university professor, engineer, etc.)”. N o one
was identified as “staff member o f this organization”, “volunteer o f this organization”, “client o f this
organization”, or “resident in the neighborhood (e.g., clergy from a local church, local small business
owner, block captain, etc.)”.
I I The survey questionnaire showed that the following description was selected as being closest to the
way the ALPHA board operated by the end o f 2001: “The CEO gathers information and advice from
many stakeholders, formulates a decision, and has it ratified by the board as a whole. The CEO is
highly influential and trusted because o f his or her expertise and experience.” According to the
criterion regarding “board power chief executive or staff’ that I discussed in Chapter 3, this selection
indicates a weak board power.
Due to the limitation of the single case study, comparison was not available between the effects of a
non-community board (as in the case o f ALPHA) on players and those o f a community board.
,v Again, the comparison was not available between the effects o f a non-community board on
resources and those o f a community board.
v While there had been numerous funding opportunities available for the community in the study
period, it is only natural that most o f them were either unknown to this organization or failed to attract
its attention. For the purpose of this study, I focus on those funding opportunities that had been
responded to, which usually took form o f written grant proposals. In other words, the response to
funding opportunities is measured mainly by written proposals (including both those that were
accepted and those that were rejected). Due to the incomplete documentation of written proposals,
proposals for some funded programs and immaterialized efforts are missing; they were counted and
analyzed with the help of other data sources (e.g., newsletters and interviews).
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v l This number includes 9 duplications due to the fact that some proposals/initiatives covered multiple
issues. For example, a proposal for JOY (Jobs for Our Youth) Program addressed three issues:
business development, job training and development, and youth problem.
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CHAPTER 6
DISCUSSION AND CONCLUSION
This dissertation reflects one of the first attempts to fill a critical void in the
existing studies of the democratic role of nonprofit organizations through an
investigation into the issue of representation in nonprofit organizations. More
specifically, the purpose of the study is to examine how environmental factors shape
an organization’s governance pattern by compromising its descriptive representation
of community interests (i.e., community representation on board and board-dominant
governance) and how such compromise affects the organization’s substantial
representation of community interests (as reflected in its selective response to issues
in the community).
In order to examine the above questions, I provide a theoretical framework
containing the following major components. The first component is a typology of
governance patterns of nonprofit organizations. The second component considers
the joint effects of resource dependence and institutional factors on nonprofit
governance patterns. The third one is an attention-based view of nonprofit
organizations based on which I examine the effects of governance patterns and other
contextual variables on organizational responsiveness to issues in the community.
The research methodology includes a mail survey and a case study. The
survey data is collected on four hundred randomly sampled nonprofit organizations
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in the City of Los Angeles. The data analysis generates the following major
findings: (1) an organization more dependent on volunteer labor is more likely to
develop a strong, community board, highlighting the important role of volunteers in
promoting descriptive representation. (2) An organization more dependent on
government funding is less likely to develop a strong, community board, implying
that governmental dependence reduces descriptive representation.
The case study is conducted on a nonprofit human service organization in
Los Angeles. Findings from the case study suggest the possible association between
the availability of communication channels and the mentality of organizational
leaders toward constituent input (i.e., the “trustee” mentality vs. the “delegate”
mentality). The study also suggests that there exists a link between descriptive
representation and substantial representation, but the link is contingent on a set of
environmental and contextual factors. The study has illustrated the contrasting
effects of two types of contextual factors - funding opportunities and “focusing
events” - on organizational responsiveness. While funding opportunities tend to
reduce organizational responsiveness through pre-defined issues and pre-guaranteed
funding availability, “focusing events” might increase organizational responsiveness
by diminishing the advantages of funding agencies and organizational decision
makers in framing issues in the community.
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In this chapter, I will discuss the combined findings from the survey and case
study components, as well as the contribution of this dissertation, its theoretical and
policy implications, and directions for future research.
6.1 Discussion of the Combined Findings
Overall, findings from the survey and case study components have
demonstrated the context-dependent nature of the representative ability of nonprofit
organizations, and the importance of understanding the conditions under which
nonprofit organizations may be more representative of constituent interests. The
study has found that environmental factors (e.g., dependence on government
funding) not only affect an organization’s descriptive representation of community
interests (i.e., pattern of governance structure), but also affect its substantive
representation (i.e., organizational responsiveness to issues in the community). The
findings have also shown how an organization’s descriptive representation (as
indicated by its governance pattern) joins other contextual factors in determining its
substantive representation.
Altogether, these findings have helped bring some interesting light into the
study of the factors that influence the democratic contribution of nonprofit
organizations. Of particular concern is the effect of governmental dependence. The
combined findings have shown that in managing its dependence on government
contracts, a nonprofit organization would not only have to change its board
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composition and board-executive relationship, which might lead to its lack of
descriptive representation of community, but also lose its autonomy in terms of
issues addressed and types of services provided and fall into the so-called
“competency trap”, which might eventually lead to its lack of substantive
representation of community. The findings have diverged from Berger and
Neuhaus’ (1977) argument that the state should take an almost Laissez-faire policy
toward nonprofit organizations and that the role of government in enhancing the
associational life should be a minimal one that does not interfere with the business of
associations. As the interdependence between the two parties has been on the rise in
the past several decades, the influence of government on nonprofit organizations
seems to be more and more inevitable. Therefore, the most urgent question for us is
probably not how to go back to the good old days when the state kept the
associational life at an arm’s length - indeed, I suspect if there ever existed such a
golden age for nonprofit organizations - but how to design public policy in a manner
that would ensure the ability of nonprofit organization to represent the interests of
their constituents and the larger community.
Moreover, the combined findings have highlighted the important role of
constituent participation in determining the extent to which nonprofit organizations
represent community interests. First of all, the combined findings indicated that
constituent participation and descriptive representation exhibit a mutually reinforcing
relationship. On the one hand, an organization with higher level of constituent
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participation tends to develop a board that is more descriptively representative. The
survey findings have demonstrated that higher level of volunteer involvement in
organizational activities is associated with more community representation on board.
Since volunteers represent an important type of constituencies for nonprofit
organizations, it seems to suggest that constituent participation has a positive effect
on descriptive representation. On the other hand, the extent to which an organization
is descriptively representative also tends to affect the motivation of employees,
volunteers, and community residents to become active players of the organization.
The case findings have indicated that the lack of community representation on board
and lack of access to organizational decision makers seemed to discourage
employees from actively participating in organizational decision making.
Besides its mutually reinforcing relationship with descriptive representation,
constituent participation is also found to have a direct, positive effect on substantive
representation of nonprofit organizations. Specifically, the participation of
employees, volunteers, and neighborhood residents in the phase of issue network
development can facilitate the communication in and around the organization, thus
help ensure that issues that may otherwise be determined by funders and
organizational leaders also reflect the needs and preferences of these less powerful
constituents. As explored in the case study, ALPHA encouraged employees,
volunteers, and neighborhood residents to participate in the communication process
during its early years, but such practices were abandoned or reduced in use as it
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developed into a multi-million dollar contractor with the government. The lack of
communication between ALPHA and the community eventually isolated the
organization from the voices and concerns of the community, and was the reason
behind many conflicts and confrontations between the two parties.
6.2 Contributions to and Implications for Theory
This dissertation has made significant contributions to the current scholarly
research on the democratic role of nonprofit organizations by probing into the issue
of interest representation. The normative perspective that I have adopted for this
study is two-fold:
♦ The issue of interest representation in nonprofit organizations is crucial to the
understanding of their important role in democratic governance;
♦ Substantive representation of community interests in nonprofit organizations
can be promoted through two mechanisms: descriptive representation and
constituent participation in organizational decision-making.
This normative perspective is a reflection of a delegate view of representation in the
Western democratic philosophy, which holds that the representative as an agent or
delegate of his constituents must, wherever possible, reflect the wants and needs of
constituents. It has extended this delegate view to the context of nonprofit sector,
and submitted that with the absence of free, frequent elections as a medium for
constituents to control their representatives (i.e., board members of nonprofit
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organizations), descriptive representation and constituent participation become
especially important as mechanisms of popular control.
Taking this perspective, this study has investigated the conditions under
which nonprofit organizations vary in their ability to descriptively and substantively
represent the interests of constituents, hence has filled a huge gap left by the existing
institutional-level analyses (e.g., interest-group pluralism, mediating structure theory,
etc.) and organizational-level analyses (e.g., the social capital thesis, civic
republicanism, etc.).
With an organizational-level analysis of interest representation in nonprofit
organizations, this dissertation has attempted to build a solid foundation for the
pluralist argument that nonprofit organizations are a primary means through which
interests of citizens are represented to the state. It took as point of departure the
observation that there are great variations among nonprofit organizations in their
levels of descriptive representation and substantive representation, and attempted to
address the following question: If nonprofit organizations vary in their representative
abilities, what are the factors that cause the variations? Such a research focus has
served as a long-waited response to Michels’ (1962) argument of “iron law of
oligarchy.” Half a century ago, Seymour Martin Lipset (1959) commented that
“Michels’ ideas have been used for descriptive purposes and for polemics
denouncing organizations as undemocratic, rather than for specific analysis of the
condition under which variations in oligarchic patterns occur” (pp. 103-104). This
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study has echoed his comment and provided a systematic empirical analysis of the
factors leading to the variations in the representative abilities of nonprofit
organizations, which is very much needed in existing studies of representation.
The study of representation in nonprofit organizations has also complemented
and strengthened the argument made by the existing organizational-level analyses of
the developmental effects of participating in nonprofit organizations on citizens (e.g.,
the social capital thesis). For instance, instead of giving an uncritical endorsement to
all nonprofit organizations for their contribution to the development of democratic
skills and social capital, this study has found the existence of a mutually reinforcing
relationship between descriptive representation and constituent participation, and
suggested that lack of representation in a nonprofit organization might weaken its
capacity to serve as a school for democracy.
In light of the findings from the study and based on the review of the relevant
literature, I will provide a number of insights about the theoretical implications of
this study. First, a better understanding of representation in nonprofit organizations
can be reached in the context of interaction between organizations and their resource
and institutional environments. Particularly, findings from this dissertation suggest
that the effect of government on the extent to which nonprofit organizations
represent the interests of community should not be ignored or under-estimated. This
suggestion parallels the arguments made by various scholars participating in the
social capital debate. Lowndes and Wilson, for example, argued that “[institutional
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design plays an important role in determining whether groups of citizens are able to
gain access to decision-making, whether decision-makers have a capacity to respond,
and whether certain groups are privileged over others in terms of the influence they
exert” (Lowndes & Wilson, 2001, p. 641). In a study on neighborhood council
systems, Cooper and Musso (1999) similarly argued that the fundamental problem in
local governance is not a lack of civic associations, but “a disconnection between
them and governance” (p. 228). They wrote,
The task is not to construct an infrastructure of citizens’
organizations; these organizations exist in great numbers. Rather, it is
necessary to reconnect neighborhood associations to elected officials
and career administrators, and to encourage regular interaction,
deliberation, and debate among local groups within the larger
metropolis (p. 204).
Altogether, these studies have suggested that the effect of government on the
democratic role of nonprofit organizations is multi-dimensional: it would determine
not only the extent to which nonprofit organizations represent the interests of their
constituents (as demonstrated by findings from this dissertation), but also the manner
in which nonprofit organizations are connected to local governance (as elaborated by
the social capital scholars mentioned above).
Secondly, this dissertation has also highlighted the unique status of nonprofit
board of directors in the understanding of nonprofit organizations’ ability to
represent community interests. Consistent with the notion that nonprofit board of
directors can be understood as part of both the organization and its environment
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(Middleton, 1987), I argue that board of directors not only functions as the governing
body of a nonprofit organization, but also performs bridging function through links
to external constituencies and critical resources. Thus, unlike other components of
the organizational structure (e.g., the service units) whose functions tend to be
buffered from environmental changes, board of directors is sensitive to changes in
the resource and institutional environment. Any board adjustments in board
composition and board-executive relationship in response to environmental changes,
however, would possibly lead to the variation in democratic deficit of nonprofit
governance.
Moreover, the study of organizational decision-making process is critical to
our understanding of democratic deficit of nonprofit governance. A dialogue
between nonprofit governance and the democratic role of nonprofit organizations
requires a better understanding of the dynamics of the governing process, yet there is
a missing link between input variables (e.g., board composition) and output variables
(e.g., organizational responsiveness) in most of the empirical studies on nonprofit
governance. In an effort to open up the “black box” of the process of nonprofit
governance, this study has advanced our understanding of the actual decision making
processes of nonprofit organizations by suggesting an attention-based view of
nonprofit organizations. As Ocasio (1997) acknowledged in his pioneering paper on
the attention-based view of firms, “[T]he theoretical development of an attention-
based view is still in its preliminary stages” (p. 204); needless to say, future research
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in this direction is needed to elaborate the theoretical framework, develop testable
hypotheses and examine them with empirical data.
6.3 Implications for Policy
By demonstrating the important consequence of reliance on government
funding for representation in nonprofit organizations, findings from this study should
serve as a much-needed wakeup call to policy makers who have been
enthusiastically advocating for privatization and service contracting with nonprofit
agencies. Given the important democratic value of descriptive and substantive
representation in nonprofit organizations, policy makers need to understand the
distinctive logic and purposes of nonprofits (Frumkin & Andre-Clark, 2000), and to
be aware of the potential damage that government funding might cause to the
representative ability of nonprofit organizations. Moreover, policy makers should
make proactive efforts to sustain nonprofit organizations’ community orientation and
their base of public support.
In response to the detrimental effect of governmental dependence on the
descriptive representation in nonprofit organizations, a possible approach would be
to make the composition of nonprofit boards the subject of legal mandate. This
approach, however, is controversial. With the acknowledgement that a legal
requirement of community representation on nonprofit boards “could enhance the
accountability of the organization to a broader conception of what is in the interest of
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the community than may now routinely the case”, Chisolm warned that “(a)ny
attempt to structure the rules to make each organization responsive to everyone
would diminish the diversity of the sector and sacrifice innovation for
standardization” (Chisolm, 1995, p. 378; emphasis added by the author).
A relatively more moderate approach deserves consideration by policy
makers. The variations in the level of democratic deficit in nonprofit governance, as
explored in this study, seem to make it a reasonable move for policy makers to
design and implement certain discriminatory funding policies or regulations over
nonprofit organizations with different pattern of governance structure. A more
precisely focused funding policy might help the emergence and prosperity of more
nonprofit organizations with better representation of community interests in their
governance.
In response to the issue of unresponsiveness to community needs arising from
the repetitive responses of an organization to the same bundle of funding
opportunities and a narrow scope of programmatic activities overtime, policy makers
should consider the design of an incentive structure that would encourage and
support the initiatives and innovative proposals emerging from the grass-roots level.
As Zimmermann (1994) put it,
[W]e need more grass-roots efforts and more government incentives,
more local initiatives with greater latitude over reliable resources.
This combination might enable nonprofits to be the better service
providers they aspire to be. (p. 401)
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One possible option for such an incentive structure is the so-called
decategorization; that is, to broaden the domains for which funds may legitimately be
used. It is suggested that if public funding agencies could loosen the categorical
restrictions on eligibility and type of service provided, it would encourage nonprofit
service providers to “take a desirable holistic approach to helping clients with their
many problems” (Bardach & Lesser, 1996, p. 213).
Another option for such an incentive structure is to require appropriate
integration of constituents (e.g., rank-and-file employees, volunteers, clients, etc.) in
the planning and delivery of services (Ellis, 2001). This option does not directly
address the issue of community initiatives and proposals, but it would foster a higher
level of involvement by constituents in organizational development. According to
the findings of this dissertation, active constituent participation might eventually
improve organizational responsiveness to issues in the community.
6.4 Implications for Nonprofit Governance and Management
The findings from the case study suggest that although a network of issues
had been developed through the converging phase, the actual making of a choice
depends less on the importance of an issue in the community, but more on effects of
the contextual factors such as board linkages and government funding opportunities.
Poor residents of the community, either lacking network ties with external funding
agencies as well as necessary professional skills, or lacking resources to develop
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such ties and skills, are likely to be screened out of the decision-making process; as
they are out of the game, so are the issues and concerns they carry.
What implication does this have on the governance and management practice
of nonprofit organizations? To address this issue, organizations need to maintain a
workable balance between their needs for government funding and their equally
compelling needs to retain a community orientation. One possible solution might be
to reduce organizational dependence on government funding through revenue
diversification. Revenue diversification has generally been viewed positively in
nonprofit organizations because of its dependence-reducing properties (Froelich,
1999; Gronbjerg, 1993; Kramer, 1981). However, Froelich (1999) warned us that
revenue diversification is a double-edged sword: It reduces concentrated resource
dependence and preserves organizational autonomy, yet blurs the distinctions
between the nonprofit and other sectors, eroding legitimacy in the process.
Another solution would be to reduce dependence on government funding
through making innovative use of other types of resources, particularly volunteer
labor. As Susan Ellis, a renowned expert on volunteer management, has
recommended, nonprofit mangers should change their defensive or vigilant attitude
toward “people who march to the beat of a different drummer” (Ellis, 2000); that is,
people with different visions or new ideas. Instead of dismissing them as naive,
uniformed, or amateur, nonprofit managers should welcome mavericks and give new
ideas a chance to be tested.
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6.5 Limitations of the Study
Several important limitations of this dissertation should also be noted. The
first limitation lies in the typology of nonprofit governance patterns developed in the
study. As mentioned in Chapter Two, although this typology has successfully
combined two key dimensions of nonprofit governance (i.e., board representation
and power distribution between board and chief executive), it did not cover all the
relevant variables. Without considering such variables as power concentration-
dispersion or degree of consensus on issues, this typology runs the risk of losing the
subtleties in and around the board. In studies of parental participation in school
governing bodies, for instance, scholars have found that parent governors were more
frequently on the periphery and had least input into decisions (Farrell & Jones, 1999;
see also Deem at al., 1995). Although these studies are not particularly focused on
nonprofit boards, they nevertheless suggest the potential problems associated with a
simplified typology of governance patterns like the one adopted in this dissertation.
The second limitation comes from the survey study. The rather small sample
size of the survey created some difficulties to define and measure certain variables.
Moreover, the very limited number of observations (a total of 95 observations in this
study), although workable, might have weakened the power in conducting
meaningful logistic regression analysis. In addition, all the studied organizations
were selected from a pool of nonprofit organizations in the City of Los Angeles, a
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typical urban, metropolitan setting. Therefore, we have to use caution when
generalizing findings and applying them into organizations of different settings (e.g.,
a suburban or rural area).
Another limitation lies in the case study approach. The single case used in
this investigation makes it almost impossible for the author to control the
confounding effects of interfering factors while illustrating the model. For example,
during the screening phase, many contextual variables (e.g., different dimensions of
the organizational attention structure, different types of funding opportunities and
“focusing events”, etc.) jointly affect the organizational responsiveness to issues in
the community, but it is difficult to separate one from another in the case study. As a
result, the case study approach limits the ability to generalize findings from this
study to all types of nonprofit organizations, and findings are more suggestive than
conclusive. Nevertheless, the case study also has its strength: it has provided us with
plenty of in-depth organizational information that is not likely to be obtained by
researchers using alternative approach. Recall that, according to Yin (1994), case
study approach aims to make findings “generalizable to theoretical propositions and
not to populations or universes” (p. 10). With the obtained information, we are able
to revise the model, identify the hypotheses, as well as to determine the next step of
study.
Still another limitation associated with this study is the self-report nature of
the design. Social desirability (Judd et al., 1991) appeared to be a factor in the
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interview responses of some of the members. It was a factor in the surveys as well
(Callahan, 2000). It is possible that executive directors, the primary data source for
the survey study and one of the major information sources for the case study, have
presented a biased portrait of themselves an their organizations.
6.6 Suggestions for Future Research
The theoretical framework developed in this study has proven to be very
helpful in determining the environmental and contextual factors affecting the
representative ability of nonprofit organizations. However, further refinement or
redesign of this framework in future research might allow for additional important
insights regarding the influence on the extent to which nonprofit organizations
represent the interests of their constituents and the larger community. Based on the
research completed for this study, and in light of the limitations of this study
described above, the following suggestions are offered for future research.
First of all, future research should further explore the guiding power of the
delegate view of representation to our understanding of the democratic role of
nonprofit organizations. In particular, future study might focus on the relationship
between representation and constituent participation in organizational decision
making. This dissertation has found that lack of descriptive representation on
nonprofit board discouraged employees, volunteers, and community residents from
active participation in the organizational activities, which in turn had a negative
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impact on the organization’s responsiveness to issues in the community. Moreover,
descriptive representation becomes less meaningful when community representatives
are cut off from the community they represent, as the lack of communication with
their constituents may allow leaders to exploit the public support for their own
purposes. There are a few studies along this line. Checkoway and Zimmerman
(1992), for example, found a positive correlation between organizational leaders’
self-reported issue representation and constituent participation.
Another focus might be placed on the relationship between the availability of
communication channels and the mentality of nonprofit leaders. This dissertation
has suggested that the extent to which communication channels were offered to all
the constituents might suffer from the “superior” or “trustee” mentality shared by
some leaders, and the antidote to the breakdown of communication channels might
be the development of a “delegate” mentality among organizational leadership.
Further research is needed to examine how the tension between the two types of
mentalities affects the attitude of organizational leaders toward constituent
participation and community input, and how a “delegate” mentality can be fostered
among nonprofit leaders.
Second, future study of the influence on nonprofit governance patterns should
make efforts to incorporate more relevant variables into the model for a more
comprehensive understanding of the factors affecting nonprofit governance. For
instance, this study did not examine how the dependence on institutional donors (i.e.,
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172
corporations and foundations) and/or dependence on fees/service charges affect
patterns of nonprofit governance. Studies by other scholars have found that co-
optive board appointments would be more effective in getting funding from a limited
number of institutional donors than those from numerous individual donors (e.g.,
money collected through donation drives) and from membership fees or dues
(Kramer & Grossman, 1987). To the extent that nonprofit organizations establish
board linkages with institutional donors in obtaining and securing funds, it is likely
to have certain impact on their governance patterns.
Third, future research can also focus on how environmental factors affect the
representative ability of other types of nonprofit organizations. Again, institutional
donors such as foundations deserve attention. Funding opportunities from
institutional donors such as foundations come with identifications of and restrictions
on problems, solutions, and issues that are in line with their own agenda. Research
shows that the agenda of institutional donors might not truly reflect the most urgent
needs of the community. Eisenberg (1997), for example, argued that, although this
country “is afflicted by severe social, economic, and governance problems”, only
very limited amount of foundation money “is being channeled into these vital areas
of public concerns” (p. 338). As a result, there is a serious mismatch between broad
social needs and current philanthropic priorities. In order to address this problem,
should institutional funders (i.e., corporations and foundations) review their existing
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173
contribution and grant-giving policy, and re-design their funding agenda in a way
that would be able to address the most urgent needs of the community?
Fourth, future research on the relationship between environmental factors and
nonprofit governance patterns should also modify and expand the survey
methodology used in this dissertation study to gather information on nonprofit
organizations with a significantly larger size of sample, so as to cover the diversity of
geographical locations, functional categories, revenue sources, and governance
patterns, among others. In order to achieve this goal, a stratified sampling method
might be designed and implemented. This would enable us to include more variables
in the model and make more powerful statistical analysis on the effects of these
variables.
Finally, future research should also conduct more case studies that cover all
the different patterns of nonprofit governance. Ideally, efforts would be undertaken
to make comparisons between and among organizations with different governance
patterns in order to better understand the extent to which governance patterns,
funding opportunities, and “focusing events” jointly determine the organizational
attention structure of nonprofit organizations, and in turn affect their responsiveness
to issues in the community.
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174
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APPENDIX
NONPROFIT GOVERNANCE SURVEY QUESTIONNAIRE
Dear colleagues,
I invite you to participate in our survey of funding environment and nonprofit
governance in Los Angeles. I am conducting this study in partial fulfillment of the
requirement for the degree of doctor of philosophy in public administration. I also
work in the African American Unity Center, a Los Angeles-based human service
agency. The purpose of this study is to obtain a better understanding of the effect of
the funding environment on the governance and management of nonprofit
organizations in Los Angeles.
YOUR ANSWERS WILL BE KEPT IN STRICT CONFIDENCE AND YOUR
NAME WILL NOT BE IDENTIFIED WITH THIS QUESTIONNAIRE. No one
except the researcher and his academic advisors will have access to this
questionnaire. The questionnaire will be destroyed after the completion of the study.
The results will be presented in an aggregate form so that no individual can be
identified. The identification number above simply enables us to avoid making
unnecessary reminder calls to you. AT NO STAGE WILL YOU OR YOUR
OFFICE BE IDENTIFIED WITH YOUR RESPONSES.
This survey should take you about 15 minutes to complete. There are no right or
wrong answers. Please fill out the survey at your earliest convenience, and then mail
it in the enclosed self-addressed, stamped envelope.
Thank you very much for your help. Your contributions and opinions will help us
better inform policy makers about the needs and concerns of nonprofit organizations
with regard to resource procurement, service delivery, and participatory democracy.
If you have any questions about the study, feel free to call me at (323) 971-7345 or
e-mail me at cguo@usc.edu.
Again, I value your response, and greatly appreciate your help.
Sincerely,
Chao Guo
Ph. D. Candidate
School of Policy, Planning, and Development
University of Southern California
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202
SECTION I: Organizational Information
1. Please identify the functional category of your organization;
□ Health Services □ Civic, Social and Fraternal Organizations
□ Education/Research □ Arts and Culture
□ Religious Organizations □ Fondations
□ Social and Legal Services □ Other (please sp ecify ): _______________
2. In which year was your organization founded? ____________
3. How much was your annual budget for the year 2001 ?
4. In the year 2001, how many paid employees did you have in your organization?
5. In the year 2001, did you have any volunteers who participate in tasks in your
organization? If the answer is “Yes”, please indicate the number of volunteers in your
organization in the year 2001:
□ Fewer than 10 volunteers □ 21-50
□ 10-20 □ Over 50 volunteers
6. Please identify the average percentage of work in your organization that is done by
volunteers:
□ Almost entire work (over 90%) □ Between 10% and 50%
□ Between 51% and 90% □ Almost none (lower than 10%)
7. How would you rate the difficulty in recruiting volunteers for your organization? Please
mark the appropriate box below.
N ot Difficult At A ll Extremely Difficult
_ _ _ _ _
□ □ □ □ □
8. In the past three years, did you participate in collaborations, alliances and integrations
with other nonprofit organizations? Please review the following activities and check all
that apply to your organization:
□ Information sharing □ Management service organization (MSO)*
□ Referral o f clients □ Parent-subsidiary (PS)**
□ Sharing o f office spaces □ Joint venture (JV)***
□ Joint program(s) □ Merger
* MSO refers to the creation o f a new organization to integrate administrative functions o f
partner organizations.
** PS refers to the integration o f some administrative functions and programmatic services.
* * * J V refers to the creation o f a new organization to further a distinct administrative or
program m atic end o f partner organizations.
SECTION II: Board of Directors
9. In the year 2001, how many members were sitting on your board of directors?
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203
10. Please break down the composition of your board of directors. For example, if you
had two attorneys on your board, please write the number “2” before “Attorney”.
Board member or executive o f a corporation, foundation, and/or a financial institution
(e.g., a bank)
_______Spouse o f board member or executive o f a corporation, foundation, and/or a financial
institution (e.g., a bank)
Board member or executive o f a nonprofit organization
_______Attorney
_______Accountant
Government official
Other professional (e.g., university professor, engineer, etc.)
Staff member o f this organization
_______Volunteer o f this organization
Client o f this organization
Resident in the neighborhood (e.g., clergy from a local church, local small business
owner, block captain, etc.)
11. How many members left your board in the past three years (1999-2001)?
How many new members joined your board in the past three years (1999-2001)?
12. How many board meetings were held during the year 2001? ____________
13. What was the average duration of time for each board meetings?
□ Fewer than 3 hours □ One or two days
□ Between 3 to 6 hours □ Three days and longer
14. What was the average percentage of board meeting attendance by your board members
(mark one)?
□ Full attendance (95% and up) □ Between 50% and 75%
□ Between 75% and 95% □ B elow 50%
15. Please read the following descriptions. From what you know about your current board
of directors, which of the following descriptions is closest to the way your board
operates (mark one)?
□ Description #1
The CEO gathers information and advice from many stakeholders, formulates a decision, and
has it ratified by the board as a whole. The CEO is highly influential and trusted because o f
his or her expertise and experience.
□ D escription #2
A small core group in the board plays a very influential role in recommending a course o f
action on governance issues. These are then debated and decided upon by the whole board.
The CEO provides information and advice during the decision-making process.
□ D escription #5
A core o f senior professional staff gathers information and advice from many stakeholders,
formulates a decision, and has it ratified by the board and the CEO. The staff is highly
influential and trusted because o f their expertise and experience.
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204
□ D escription #4
The board operates according to an ideology o f consensus between the board and the CEO.
The board emphasizes extensive communication and consultation with all interested parties
related to any given issue.
SECTION III: Funding Environment
16. Please identify the funding composition of your organization (in percentage) in the year
2001:
(%) Donations by Individuals (e.g., money collected through donation drives)
_ _ _ _ ( % ) Donations by Institutional Donors (e.g., grants from corporations, foundations and
federated funders)
(%) Fees/Dues/Service Charges
_______(%) Government Funding
(%) Other
17. From how many institutional donors (e.g., corporations, foundations, and federated
funders) did you receive donations in the year 2001?
□ 1-2 institutional donors □ 6-10
□ 3-5 □ Over 10 institutional donors
18. How did the number of institutional donors of your organization change in the year
2 00 1 ?
□ About the same □ Increased □ Decreased
19. How did your revenue from institutional donors change in the year 2001?
□ About the same □ Increased □ Decreased
20. For how many years have you been receiving donations from institutional donors?
□ More than 15 □ 6-10
□ 11-15 □ 5 or under
21. How often did institutional donors change their priorities or needs* in the past three
years(1999-2001)?
□ Less than once a year □ Every two years
□ Once a year □ More than every two years
*Note: “Changes in priorities or needs ” refer to changes o f target clients, service types, service
strategies, etc.
22. To what extent were you able to predict changes in priorities or needs of institutional
donors in the past three years (1999-2001)?
□ Predictable more than 75% o f □ 26-50%
the time □ 0-25%
□ 51-75%
23. From how many agencies did you receive government funding in the past year?
□ 1-2 agencies □ 6-10
□ 3-5 □ Over 10 agencies
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205
24. How did the number of agencies from which you obtained government funding change
in the year 2001?
□ About the same □ Increased □ Decreased
25. How did your revenue from government funding change in the year 2001?
□ About the same □ Increased □ Decreased
26. For how many years have you been receiving government funding?
□ More than 15 □ 6-10
□ 11-15 □ 5 or under
27. How often did your government funding agencies change their priorities or needs* in
the past three years (1999-2001)?
□ Less than once a year □ Every two years
□ Once a year □ More than very two years
*Note: “Changes in priorities or needs ” refer to changes o f target clients, service types, service
strategies, etc.
28. To what extent were you able to predict changes in priorities or needs of your
government funding agencies in the past three years (1999-2001)?
□ Predictable more than 75% o f □ 26-50%
the time □ 0-25%
□ 51-75%
29. How did your revenue from fees/dues/service charges change in the year 2001?
□ About the same □ Increased □ Decreased
30. For how many years have you been receiving fees/dues/service charges?
□ More than 15 □ 6-10
□ 11-15 □ 5 or under
31. Suppose your organization has a 25 percent cut in funding. In order to increase your
revenue, would you consider it a feasible option to place representatives of external
funding agencies on your board of directors?
□ Yes, it would be a feasible solution
□ Well, it would be difficult, but still possible
□ No, it would be too difficult to be feasible
□ No, I would rather try some other options
□ I am not sure
Thank you so much for helping us today. Your opinions are very important to us.
Please place the survey in the self-addressed, postage-paid return envelope and
drop it in the mail.
THANK YOU!
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

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Asset Metadata

Creator Guo, Chao (author)

Core Title Environmental constraints, governance patterns, and organizational responsiveness: A study of representation in nonprofit organizations

School Graduate School

Degree Doctor of Philosophy

Degree Program Public Administration

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag OAI-PMH Harvest,Political Science, public administration

Language English

Contributor Digitized by ProQuest (provenance)

Advisor Cooper, Terry L. (committee chair), Musso, Juliet A. (committee member), Preston, Michael B. (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c16-636121

Unique identifier UC11340110

Identifier 3116707.pdf (filename),usctheses-c16-636121 (legacy record id)

Legacy Identifier 3116707.pdf

Dmrecord 636121

Document Type Dissertation

Rights Guo, Chao

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA