Nonprofit organisations are integral to modern society, supporting people who live in difficult circumstances, advocating for the disadvantaged, strengthening communities through voluntary initiatives, and playing a significant role in formulating and implementing social policy. They also contribute to economic growth, by providing employment for many people. Research on nonprofit management has increased over the past few decades as the importance of such organisations has grown. However, a range of competing and contradictory views characterise the extant literature. While some scholars acknowledge the importance of business expertise and processes, others consider these to be a distraction from the fulfilment of social needs. Still others endorse practices that aim to provide both social and financial sustainability. Missing from this discussion is an understanding of how different approaches affect the operations and outcomes of nonprofit organisations. The broad aim of this thesis is to identify the managerial approaches and practices used within social service nonprofit organisations and to determine how the different practices of each approach influence organisational outcomes.
A review of the literature identified three distinct schools of thought about nonprofit management that have emerged over the last half-century. The Traditional School emphasises the effectiveness of service delivery and maintaining the social mission of an organisation. The Contemporary School promotes adopting practices from the for-profit sector to increase the efficient use of resources in service delivery. The Hybrid School advocates combining business tools with social missions to create nonprofit organisations that are sustainable over the long term. The review also indicated that none of these schools are accepted universally and there is intense debate over their relevance and suitability.
This thesis examines the three schools of thought in further depth and explores the extent to which they influence current nonprofit management practice through seven in-depth case studies of Australian social service organisations. The findings are used to develop an integrative framework consisting of three organisational configurations that are ‘ideal types’ representing the three schools. These configurations explain how the three schools manifest in practice and illustrate the internally consistent patterns of practices, relationships and interactions, along with the intended and unintended outcomes associated with each. The findings show that nonprofit organisations adapt to internal tensions and external pressures over time by adopting practices from the different schools. They also suggest that resulting inconsistencies within a nonprofit’s configuration of practices can create tensions and unintended outcomes that lead to further change. The thesis concludes with a set of propositions about the practices and outcomes associated with each school of thought that can be used in future research on nonprofit management.
The thesis contributes to two broad areas. First, it provides an integrative overview of nonprofit management approaches and brings order to the complex and fragmented landscape of nonprofit management. The three schools of thought show how management has evolved within the nonprofit context and help explain the inherent tensions and conflicts that nonprofit organisations experience. Second, the empirical evidence shows how the three schools influence practice and provides additional insight into the resulting implications. The proposed framework draws attention to the dynamic and complex nature of nonprofit management by highlighting the ideal types, transitions and combinations of practices from different configurations. These insights can facilitate future discussion through a shared understanding of nonprofit management, and can also assist nonprofits to understand themselves and their own priorities.