01 964093 FM.qxd 10/30/03 9:33 AM Page v Why Nonprofits Fail Overcoming Founder’s Syndrome, Fundphobia, and Other Obstacles to Success Stephen R Block 01 964093 FM.qxd 10/30/03 9:33 AM Page v 01 964093 FM.qxd 10/30/03 9:33 AM Page i 01 964093 FM.qxd 10/30/03 9:33 AM Page ii Other Jossey-Bass Leadership and Management Titles: Forging Nonprofit Alliances, Jane Arsenault Creating Your Employee Handbook, The Management Center, Leyna Bernstein, author The Drucker Foundation Self-Assessment Tool for Nonprofit Organizations, Revised Edition, The Peter F Drucker Foundation for Nonprofit Management Strategic Planning for Public and Nonprofit Organizations, John M Bryson Marketing Nonprofit Programs and Services, Douglas B Herron The Jossey-Bass Guide to Strategic Communications for Nonprofits, Kathleen Bonk, Henry Griggs, Emily Tynes The Leader of the Future, Frances Hesselbein, Marshall Goldsmith, Richard Beckhard, editors The Organization of the Future, Frances Hesselbein, Marshall Goldsmith, Richard Beckhard, editors The Community of the Future, Frances Hesselbein, Marshall Goldsmith, Richard Beckhard, Richard F Schubert, editors Leading Beyond the Walls, Frances Hesselbein, Marshall Goldsmith, Iain Somerville, editors The Collaboration Challenge: How Nonprofits and Businesses Succeed Through Strategic Alliances, James E Austin Leader to Leader Journal Leader to Leader: Enduring Insights on Leadership from the Drucker Foundation’s Award-Winning Journal, Frances Hesselbein, Paul Cohen, editors 01 964093 FM.qxd 10/30/03 9:33 AM Page iii Why Nonprofits Fail 01 964093 FM.qxd 10/30/03 9:33 AM Page iv To April and Zach 01 964093 FM.qxd 10/30/03 9:33 AM Page v Why Nonprofits Fail Overcoming Founder’s Syndrome, Fundphobia, and Other Obstacles to Success Stephen R Block 01 964093 FM.qxd 10/30/03 9:33 AM Page vi Copyright © 2004 by John Wiley & Sons, Inc All rights reserved Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741 www.josseybass.com No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the web at www.copyright.com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, e-mail: permcoordinator@wiley.com Jossey-Bass books and products are available through most bookstores To contact JosseyBass directly call our Customer Care Department within the U.S at 800-956-7739, outside the U.S at 317-572-3986, or fax 317-572-4002 Jossey-Bass also publishes its books in a variety of electronic formats Some content that appears in print may not be available in electronic books Library of Congress Cataloging-in-Publication Data Block, Stephen R Why nonprofits fail: overcoming founder’s syndrome, fundphobia, and other obstacles to success/Stephen R Block—1st ed p cm Includes bibilographical references and index ISBN 0-7879-6409-3 (alk paper) Nonprofit organization.—Management I Title HD62.6.B586 2003 658'.048—dc22 2003022254 Printed in the United States of America FIRST EDITION HB Printing 10 01 964093 FM.qxd 10/30/03 9:33 AM Page vii Contents Preface Acknowledgments The Author ix xv xvii Part I: Charting a New Path to Success Preventing Failure, Ensuring Success The Need for Alternative Tools The Framework and the Steps First-Order and Second-Order Approaches to Change 13 21 27 Part II: Seven Tough Problems and How to Solve Them 10 11 Recruitment Disorientation Cultural Depression in Nonprofit Organizations Political Performance Role Confusion Financial Misfortune Fundphobia Founder’s Syndrome 41 59 73 91 107 121 135 vii 01 964093 FM.qxd viii 10/30/03 9:33 AM Page viii Contents Conclusion: Managing Nonprofit Organizational Change Resource A: A Review of Organizational Behavior Theories Resource B: Recommended Reading References Index 155 161 179 181 185