Dissertation title: “Ethical and Strategic Issues in Non-Profit Resource Management”
Most charitable non-profit organizations rely on third-party donors, rather than customers or taxed citizens, to contribute resources on a voluntary basis. This reliance on donors poses a number of ethical and strategic challenges for non-profit managers. Papers 1 and 2 explore the strategic and ethical dilemmas non-profit managers may encounter in deciding to accept or reject a financial donation. The strategic dilemma lies in determining whether a donation will improve or diminish the non-profit’s resource base and effectiveness over time. The ethical dilemma, which may be only apparent, is whether to accept a donation that stands to bring about harm. Paper 3 identifies an effort on the part of non-profit managers to lessen their reliance on voluntary donations and generate a new source of funding from health care organizations. I highlight the strategic and ethical questions that persist for managers even in this scenario.
Paper 1 used a discrete choice experiment to understand how 370 non-profit managers made tradeoffs between the dollar amount of a donation and other characteristics, including whether it is restricted or unrestricted, renewable or non-renewable, anonymous or public and made voluntarily or legally-mandated. I refer to the non-amount attributes of the donation as conditions. Participants were presented with pairs of hypothetical donations from sugar-sweetened beverage companies and asked to select which they would prefer to accept. I found that managers valued the dollar amount as the most important characteristic but were willing to accept smaller dollar amounts when the conditions associated with larger amounts were perceived as very unfavorable. For three of the four condition attributes, non-profit managers’ stated preferences were in tension with academic perspectives on donation acceptability.
Several non-profits have garnered public pressure to reject donations from wrongdoers. Paper 2 took up the questions: What harms, if any, does donation acceptance stand to create? And, which donations, if any, should be considered impermissible to accept? Prior efforts to address these questions have viewed non-profits as inert receptacles of donor resources and drawn on ethical frameworks such as wrongful benefits and ill-gotten gains to determine acceptability. I aim to redirect the discussion about non-profit fundraising by suggesting that non-profit organizations, and the managers that represent them, take a considerably more active role in relationships with donors than has been appreciated. Rather than viewing donations as one-way transfers of resources, I argue that donations are most appropriately understood as part of an exchange between donors and non-profits. These exchanges can bring about harms that deserve to be weighed against the benefits of the donation to the non-profit. Managers may face an apparent dilemma between their fiduciary duty and their duty to avoid harm. To eliminate the need for managers evaluate the permissibility of each donation, I propose a structural solution in the form of blind trusts for non-profit fundraising.
Paper 3 describes how some social service non-profits are aiming to lessen their reliance on voluntary donors and seek paid, contractual work. I explore how Massachusetts social service providers’ responded to changes in Medicaid policy, which included new funding for hospitals to contract with social service providers. Using qualitative data collection and an institutional theory-based analysis, I found that social service providers were attempting to make their organizations appear more like health care organizations by adopting health care language, staffing models and metrics. They undertook these changes in order to appear as ready contracting partners to hospitals and other health care delivery organizations, who were perceived as having substantial resources. These efforts raise questions about what work social services forego if they are successful in reforming themselves to behave more like health care organizations.
A central question of non-profit management is how to generate sufficient resources to sustain the organization and create societal benefit. This dissertation has highlighted the way in which non-profit managers seek to generate resources through the cultivation of relationships with external parties. The values and goals of these external parties are often imperfectly aligned with those of the non-profit, which raises questions for managers about the appropriateness and impact of potential relationships. The strategic and ethical questions explored herein are particularly pronounced in the value-laden non-profit sector but the rise in social consciousness surrounding business may present an analogous set of questions for for-profit organizations in the future. Non-profit managers are often instructed to heed the practices of their for-profit peers, yet in this case, the business community may benefit from paying close attention to the non-profit experience.