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 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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 16 964093 ResA.qxd 176 10/30/03 9:35 AM Page 176 WHY NONPROFITS FAIL Although the idea of sending a message to another person seems like a simple process, it is probably one of the most complex forms of interaction in which we engage For some reason, messages can become distorted or interpreted incorrectly The party game of telephone, in which a message is whispered from one person to another around a circle until it reaches the person who originated it, demonstrates how easy it is for a message to be unintentionally distorted Furthermore, the assignment of meaning that individuals give to words is another complex process that can lead to semantic problems and misunderstanding A benign or even complimentary statement can be misinterpreted by the receiver of the message as a statement of criticism or ridicule The subtleties that help us assign meaning to the words we hear are not taught to us We learn through observation, trial and error, and participation in message sending and receiving The assignment of meaning to words is also a function of one’s upbringing, personality, and cultural background However, in a work setting, we may not be in a position to determine the personality traits of the individuals with whom we attempt to send and receive messages Also, we may not be in a position to ask others to explain the cultural nuances in how they sent or received and interpreted a message Individuals sometimes construe negative motives and intentions based on communication from different frames of reference I recall on two occasions asking employees to come to my office to discuss a matter when they inferred that they were going to be fired On both occasions, I had intended to offer them a promotion! Apparently, being invited into the boss’s office can produce a state of anxiety that leads individuals to assign to the communication a motive or intention that truly does not exist Given all of the possible places and ways that a message can be distorted, there is a very good reason why most people state that “poor communication” is the major reason for conflict in their interpersonal or business lives From all of this, we can deduce that to 16 964093 ResA.qxd 10/30/03 9:35 AM Page 177 Resource A: A Review of Organizational Behavior Theories effectively manage and govern a nonprofit organization, an individual requires not only knowledge of management principles but also the skill and ability to use judgment and examine messages By learning how to scrutinize messages, managers and board members will improve their opportunities for organizational success Intergroup Conflict Theory Unless individuals in an organization have participated in interdepartmental or board-and-staff training, it is highly unlikely that individuals from one departmental group will have an orientation to the tasks or know what is important to members of other departmental groups Dissimilarity of values and diverse goals and objectives among groups can affect how members of one group interact with members of another group even though they all work or volunteer for the same organization and are guided by one organizational mission statement These interactional or process differences between group members can spark conflict between groups The social and psychological forces that spur intergroup conflict are analogous to how Democrats and Republicans relate to each other’s different positions on public policy issues, even though they are “all for America.” Conflict is also a result of a form of competition that can occur when department members, board members, committee members, or any special grouping of individuals develop ties to their own subgroup’s norms and goals and lose sight of where their subgroup fits into the bigger picture of the nonprofit organization and its mission Decision-Making Theory If you ask someone to describe the process he or she follows to make a decision, the person is likely to say, “I don’t know,” or else describe a rational decision-making model The process of rational decision making is the common problem-solving model reviewed in college 177 16 964093 ResA.qxd 178 10/30/03 9:35 AM Page 178 WHY NONPROFITS FAIL psychology and communication courses Although some variations of the model exists, it basically follows six sequential steps: Define the problem Identify the important ingredients of the situation and what is important to the decision maker Weigh the pros and cons Determine if alternative solutions exist Prioritize the solutions Select the decision choice, based on the likelihood of achieving the results In reality, most management and governance decisions are not made with careful scrutiny or in so precise a way as following six logical steps Instead, most decisions are made intuitively, heuristically, or emotionally Intuitively formed decisions are based on a reservoir of prior experiences and learned information Heuristically formed decisions are based on events or information stored in one’s recent memory Emotionally formed decision making does not draw on facts In this mode, decisions are impulsively reached in reaction to feelings of stress or any emotion or combination of emotions from feeling happy to feeling very angry When reaching emotionally formed decisions, individuals also engage in decision strategies that are influenced by failed or problematic decisions made in the past 17 964093 ResB.qxd 10/30/03 9:35 AM Page 179 Resource B Recommended Reading Atkinson, J W., and Raynor, J O Motivation and Achievement Washington, D.C.: Winston, 1974 Barrick, M R., and Mount, M K “The Big Five Personality Dimensions and Job Performance: A Meta-Analysis.” Personnel Psychology, 1991, 44, 1–26 Beach, L R Making the Right Decision: Organizational Culture, Vision, and Planning Upper Saddle River, N.J.: Prentice Hall, 1993 Blake, R R., Shepard, H A., and Mouton, J S Managing Intergroup Conflict in Industry Houston, Texas: Gulf, 1964 Block, P Stewardship: Choosing Service over Self-Interest San Francisco: BerrettKoehler, 1996 Block, S R Perfect Nonprofit Boards: Myths, Paradoxes, and Paradigms New York: Simon & Schuster, 1998 Bobocel, D R., and Meyer, J P “Escalating Commitment to a Failing Course of Action: Separating the Roles of Choice and Justification.” Journal of Applied Psychology, 1994, 79, 360–364 Bunker, D R., and Wijnberg, M H Supervision and Performance: Managing Professional Work in Human Service Organizations San Francisco: JosseyBass, 1988 Conger, J A., Kanungo, R N., and Associates Charismatic Leadership San Francisco: Jossey-Bass, 1988 Deal, T E., and Kennedy, A A “Culture: A New Look Through Old Lenses.” Journal of Applied Behavioral Science, 1983, 19, 498–505 Denison, D R Corporate Culture and Organizational Effectiveness New York: Wiley, 1990 Drory, A., and Romm, T “The Definition of Organizational Politics: A Review.” Human Relations, 1990, 43, 1133–1155 179 17 964093 ResB.qxd 180 10/30/03 9:35 AM Page 180 WHY NONPROFITS FAIL Farrell, D., and Petersen, J C “Patterns of Political Behavior in Organizations.” Academy of Management Review, 1982, 7, 403–412 Herman, R E Keeping Good People Winchester, Va.: Oakhill Press, 1999 Herman, R E., and Gioia, J L How to Become an Employer of Choice Winchester, Va.: Oakhill Press, 2000 Kline, P., and Saunders, B Ten Steps to a Learning Organization (2nd ed.) Arlington, Va.: Great Ocean, 1993 Kuhn, T S The Structure of Scientific Revolutions (2nd ed.) Chicago: University of Chicago Press, 1974 Leckey, A The Lack of Money Is the Root of All Evil Upper Saddle River, N.J.: Prentice Hall, 2000 Lewin, K Field Theory in Social Science New York: HarperCollins, 1951 Marshall, E M Transforming the Way We Work: The Power of the Collaborative Workplace New York: AMACOM, 1995 Mohrman, S A., Cohen, S G., and Mohrman, A M., Jr Team-Based Organizations San Francisco: Jossey-Bass, 1995 Nutt, P C Making Tough Decisions: Tactics for Improving Managerial Decision Making San Francisco: Jossey-Bass, 1989 Schein, E H Process Consultation: Its Role in Organization Development Boston: Addison-Wesley, 1969 Schein, E H “The Role of the Founder in Creating Organizational Culture.” Organizational Dynamics, 1983, 12, 13–28 Schein, E H Organizational Culture and Leadership San Francisco: Jossey-Bass, 1985 Schindler, P L., and Thomas, C C “The Structure of Interpersonal Trust in the Workplace.” Psychological Reports, 1993, 73, 563–574 Sherif, M., Harvey, O J., White, B J., Hood, W R., and Sherif, C Intergroup Conflict and Cooperation: The Robbers Cave Experiment Norman, Okla.: Book Exchange, 1961 Thompson, J G Organizations in Action New York: McGraw-Hill, 1967 Widmer, C “Why Board Members Participate.” In R D Herman and J Van Til (eds.), Nonprofit Boards of Directors: Analyses and Applications New Brunswick, N.J.: Transaction, 1989 18 964093 References.qxd 10/30/03 9:34 AM Page 181 References Argyris, C., and Schön, D A Organizational Learning II Boston: AddisonWesley, 1995 Ashby, W R An Introduction to Cybernetics London: Chapman & Hall, 1956 Barnard, C Functions of the Executive Cambridge, Mass.: Harvard University Press, 1938 Bennis, W On Becoming a Leader Boston: Addison-Wesley, 1989 Bennis, W., and Nanus, B Leaders: The Strategies for Taking Charge New York: HarperCollins, 1985 Block, P The Empowered Manager: Positive Political Skills at Work San Francisco: Jossey-Bass, 1987 Block, S R., and Rosenberg, S “Toward an Understanding of Founder’s Syndrome: An Assessment of Power and Privilege Among Founders of Nonprofit Organizations.” Nonprofit Management and Leadership, 2002, 12, 353–368 Bolman, L G., and Deal, T E Reframing Organizations: Artistry, Choice, and Leadership (2nd ed.) San Francisco: Jossey-Bass, 1997 Brill, P L., and Worth, R The Four Levers of Corporate Change New York: AMACOM, 1997 Bryce, H J Financial and Strategic Management for Nonprofit Organizations (3rd ed.) San Francisco: Jossey-Bass, 2000 Cartwright, D., and Zander, A (eds.) Group Dynamics: Research and Theory (2nd ed.) New York: HarperCollins, 1960 Champoux, J E Organizational Behavior: Essential Tenets for a New Millennium Cincinnati: South-Western, 2000 Drucker, P F “What Business Can Learn from Nonprofits.” Harvard Business Review, July-August 1989, pp 88–93 181 18 964093 References.qxd 182 10/30/03 9:34 AM Page 182 References Fielder, F E A Theory of Leadership Effectiveness New York: McGraw-Hill, 1967 French, J., and Raven, B “The Bases of Social Power.” In D Cartwright (ed.), Studies in Social Power Ann Arbor, Mich.: Institute for Social Research, 1959 Hersey, P., Blanchard, K H., and Johnson, D E Management of Organizational Behavior: Leading Human Resources (7th ed.) Upper Saddle River, N.J.: Prentice Hall, 1996 Herzberg, F., Mausner, F., and Snyderman, B The Motivation to Work New York: Wiley, 1959 Kilmann, R H Managing Beyond the Quick Fix San Francisco: Jossey-Bass, 1989 Lewin, K “Frontiers in Group Dynamics: Concept, Method, and Reality in Social Science; Social Equilibria, and Social Change.” Human Relations, June 1947, pp 5–41 Likert, R New Patterns of Management New York: McGraw-Hill, 1961 Likert, R The Human Organization New York: McGraw-Hill, 1967 Maslow, A Motivation and Personality New York: HarperCollins, 1954 Mayo, E The Human Problems of an Industrialized Civilization Old Tappan, N.J.: Macmillan, 1933 McClelland, D C The Achieving Society New York: Van Nostrand Reinhold, 1961 McGregor, D The Human Side of Enterprise New York: McGraw-Hill, 1960 Nigel, H “The Theory of Metagames.” General Systems, 1966, 11, 167–186 O’Connell, B The Board Member’s Book: Making a Difference in Voluntary Organizations New York: Foundation Center, 1985 Ott, J S The Nature of the Nonprofit Sector Boulder, Colo.: Westview Press, 2001 Reuters Business Information and Benchmark Research Dying for Information? An Investigation into the Effects of Information Overload in the UK and Worldwide London: Reuters, 1996 Robbins, S P Organizational Behavior: Concepts, Controversies, Applications Upper Saddle River, N.J.: Prentice Hall, 1998 Robbins, S P Essentials of Organizational Behavior (7th ed.) Upper Saddle River, N.J.: Prentice Hall, 2002 Roethlisberger, F J., and Dickson, W J Management and the Worker Cambridge, Mass.: Harvard University Press, 1939 Senge, P M The Fifth Discipline New York: Doubleday, 1990 Taylor, B E., Chait, R P., and Holland, T P “The New Work of the Nonprofit Board.” Harvard Business Review, September-October 1996, pp 36–46 Vroom, V H Work and Motivation New York: Wiley, 1964 18 964093 References.qxd 10/30/03 9:34 AM Page 183 References Watzlawick, P., Beavin, J H., and Jackson, D D Pragmatics of Human Communication: A Study of Interactional Patterns, Pathologies, and Paradoxes New York: Norton, 1967 Watzlawick, P., Weakland, J H., Fisch, R., and Erickson, M H Change Principles of Problem Formation and Problem Resolution New York: Norton, 1974 183 18 964093 References.qxd 10/30/03 9:34 AM Page 184 19 964093 Index.qxd 10/30/03 10:30 AM Page 185 Index A Abstract reasoning, and second-order approach to change, 35–36 Accountability: financial, of nonprofit managers and board members, 107–108; funders’ emphasis on, 15 Achievement motivation theory: and founder’s syndrome behaviors, 145–146; overview of, 168–169 Affiliation, founders’ need for, 146–147 Alternative approach to problem solving: advantages of, 10–11; author’s history of using, 4–5; need for, 20; steps in, 25 See also Conventional approach to problem solving; Secondorder approach to change Analogy, as method for discussing difficult issues, 101, 117 Approaches to change See First-order approach to change; Second-order approach to change Argyris, C., 80 Ashby, W R., 83 Assessment of problems: by nonprofit managers, 23–25; by physicians, 22–23 Attitude theory, and board members’ fundphobia, 128 Attribution theory, and high staff turnover, 64 B Bakersville Boys’ Ranch (case study), high staff turnover at, 60, 61–71 Barnard, C., 129 Bartlett, C (fictitious name), 109 Bauer, D (fictitious name), 92–93, 94, 95–96, 97 Beavin, J H., 173 Behavioral leadership theories: and board members’ fundphobia, 131; overview of, 161–165 Bennis, W., 165 Bertrom, S (fictitious name), 125, 132–133, 134 Blanchard, K H., 4, 66, 101, 165 Block, P., 70, 84 Block, S R., 146 Board members: financial management role of (case study), 109–120; financial responsibility of, 107–109; fundphobia of (case study), 123–134; fundraising by, 121, 122; meeting nonattendance by, 31–35, 43–55, 57–58; not fulfilling their commitment to nonprofits, 41–43; recruitment disorientation of, 42, 48–49; recruitment of, 45–46, 50, 56–57; understanding differences between first-order and second-order change, 37 Board of directors: confusion over role of (case study), 92–105; dispute between founder and (case study), 138–140, 141–146, 147, 153–154; poor quality of governance by, 17 Bolman, L G., 36 Brill, P L., 30 Bryce, H J., 108 Busch, P (fictitious name), 109–114, 116–119 Business, nonprofits partnering with, 185 19 964093 Index.qxd 186 10/30/03 10:30 AM Page 186 Index C Cardinal Art Museum of Design and Printing (case study), high staff turnover at, 60–61 Cartwright, D., 162 Case statements, 122 Case studies: confusion over roles of nonprofit manager and board of directors, 92–105; financial management problem, 109–120; founder’s syndrome, 137–154; fundphobia of board members, 123–134; high staff turnover, 60–71; meeting nonattendance by board members, 43–55; political performance, 74–89 Chait, R P., 17 Champoux, J E., 98, 157 Change See First-order approach to change; Organizational change; Second-order approach to change Change agents, nonprofit managers as, 156 Clarkson, S (fictitious name), 76, 78, 79, 82, 85–86 Communication theory: and board member nonattendance, 51; and financial management, 115–116; and high staff turnover, 64; overview of, 173–177 Contingency management models, and high staff turnover, 66 Conventional approach to problem solving: nonprofit managers’ use of, 13–14, 20; steps in, 178; taught in nonprofit management education, 18–19 See also Alternative approach to problem solving; First-order approach to change Council for Renewable Energy (case study), responsibility for financial management at, 109–120 Coworkers, not understanding alternative frameworks for change, 37–38 Cultural depression: case study of, 60–71; nonprofit managers’ reinforcement of, 59, 64; staff turnover as symptom of, 59, 61, 64–65 See also Organizational culture Culture See Organizational culture D Deal, T E., 36 Decision making, lack of experience in, 35 Decision-making theory, overview of, 177–178 Dickson, W J., 163 Drucker, P F., 14 E Emotions: reacting to political performance practices with, 85; as reason for persisting with first-order approach to change, 36 Employees: link between organizational culture and performance by, 63; participating in planned organizational culture change, 68–69, 70, 71; political performance by supervisors of (case study), 74–89 See also Staff turnover Engles, S (fictitious name), 53–54, 55 Equity theory, and board members’ fundphobia, 128–129 Erickson, M H., 29, 30, 83 Evolutionary paradigm, 157–158 Exchange theory, and board members’ fundphobia, 130 Expectancy theory, overview of, 169–171 Experience, lack of decision-making, 35 F Failure of nonprofits: reasons for, 18–19; types of problems labeled as, 6–7 Fielder, F E., 66, 165 Financial management: board versus nonprofit manager responsibility for, 107–109; by nonprofit managers and board members (case study), 109–120 First-order approach to change: with board member fundphobia problem, 126–127; with board member nonattendance problem, 31–32, 43–45, 46–48, 57; conventional problem solving as, 19–20, 29; deciding when to use, 31, 37–38; defined, 28; example of, 27–28; with financial management problem, 111–112; with founder’s syndrome behaviors, 143–144; with high staff turnover 19 964093 Index.qxd 10/30/03 10:30 AM Page 187 Index problem, 62–63; no fundamental organizational change as result of, 30–31; with political performance problems, 80–81, 86–88; reasons problem solvers persist with, 35–36; repetition of solution with, 30, 35; with role confusion problem, 96, 100; “why” focus of, 29–30, 31 See also Conventional approach to problem solving; Second-order approach to change Fisch, R., 29, 30, 83 Flattening organizational hierarchy, 159 Force Field Analysis theory See Lewin’s Force Field Analysis theory Founder’s syndrome: background on, 135–137; case studies of, 137–154; theories for examining, 144–147, 172–173 French, J., 82 Fundphobia: of board members (case study), 123–134; defined, 121 Fundraising: by board members, 121, 122; four-step process for, 122–123 See also Fundphobia G Game theory, and political performance problems, 83, 85–86 Government: change in funding policies of, 15; nonprofits partnering with agencies of, 9; support of nonprofit sector by, 8–9 Groupthink, and role confusion problem, 98 H Hawthorne studies, 163 Hersey, P., 4, 66, 101, 165 Herzberg, F., 168 Hierarchy, flattening, 159 Hierarchy of needs theory, 168 Holland, T P., 17 Hypothesis: about board member fundphobia problem, 129; about board member nonattendance problem, 51; about financial management problem, 116–117; about founder’s syndrome behaviors, 147–148; about political performance problems, 82–83; about reason for high staff turnover, 64–65; about role confusion problem, 99–100; physician’s use of, 23 I Information overload, 114–115 Institute for the Advancement of Academic Freedom (case study), political performance at, 77–78, 80, 82–89 Intergroup conflict theory, overview of, 177 Intergroup relationship behavior, and role confusion problem, 97–98 J Jackson, D D., 173 Johnson, D E., 4, 66, 101, 165 K Kelman, K (fictitious name), 93–94, 96, 97 KidsCan, Inc (case study), nonattendance by board members of, 43–55 Kilmann, R H., 63, 65 L Leadership: based on political performance, 78–79, 81–82; committed to organizational culture change, 67; and planned change, 3–4, 28 See also Behavioral leadership theories Learning organization paradigm, 158–159 Lewin, K., 171 Lewin’s Force Field Analysis theory: and board member nonattendance, 50; and financial management, 113–114; and founder’s syndrome behaviors, 144–145, 172–173; and high staff turnover, 66–67; overview of, 171–173 Likert, R., 68, 162 Likert’s management systems model: and leadership behavior, 163–164; and planned organizational culture change, 68–69 M Machiavelli, N., 36, 81 Management education See Nonprofit management education Management systems model See Likert’s management systems model Managers See Nonprofit managers Martin, J (fictitious name), 124–125, 126–127 187 19 964093 Index.qxd 188 10/30/03 10:30 AM Page 188 Index Maslow, A., 168 Mausner, F., 168 Mayo, E., 163 McClelland, D C., 145, 146, 168 McGrath, J (fictitious name), 93–94, 95–96, 97–98 McGregor, D., 163 McKay, G (fictitious name), 43–55 Mental Health Center of Dakota Creek (case study), high staff turnover at, 60, 61–71 Metacommunication, 64 Metaphors, as tool for discussing difficult issues, 101, 117 Miller, A (fictitious name), 45, 48 Morgan Beach County Seniors Campaign (case study), role confusion in, 92–105 Mountain Town, Inc (case study), founder’s syndrome at, 140–141, 142, 143, 144–146, 147–153 N Nanus, B., 165 Nelson, B (fictitious name), 60 Newsletters, multiple versions of, 174–175 Nigel, H., 83 Nonprofit board of directors See Board of directors Nonprofit management education, 15, 16, 17–19 Nonprofit management technical assistance centers, 15 Nonprofit managers: as change agents, 156; confusion over role of (case study), 92–105; conventional problem-solving approaches of, 13–14, 20; cultural depression reinforced by, 59, 64; difficulty of job of, 13, 17; financial management role of (case study), 109–120; financial responsibility of, 107–108; and high staff turnover problem, 60–61, 62, 64, 67, 69–70; nonmanagement background of, 14, 15–16; nonprofit management education of, 15, 16, 17–18; participation by, in planned organizational culture change, 67, 68, 69–70, 71; political performance by (case study), 74–89; problem assessment by, 23–25; skills required of, 3–6, 36–38, 108; stuck at first-order approach to change, 35–36 Nonprofit organizations: economic contribution of, 9–10; failure of, 6–7, 18–19; future of, 159; government support of, 8–9; nonbusinesslike operation of, 16–17, 18; partnering with business and government, 9; roles of, 9, 17; scope of, 8; social benefits of, 7–8 O O’Connell, B., 17 Organizational behavior theories See Theories Organizational change: organizational development mind-set for managing, 156; paradigms for viewing, 157–159; planned, 3–4, 28; skills required for managing, 3–6 See also First-order approach to change; Second-order approach to change Organizational culture: with board member fundphobia problem, 128; importance of, 59; link between employee performance and, 63; in organizations with high staff turnover, 62; planned change of, 66–71; and vision, 70–71 See also Cultural depression Organizational culture theory, and high staff turnover, 63 Organizational development mind-set, 156 Ott, J S., 17 P Participation theory, and board members’ fundphobia, 129 Performing arts center, political performance at (case study), 75–76, 78–79, 80, 82–86 Personality theories: and founder’s syndrome behaviors, 145–147; overview of, 165–169 Personality types, 166–168 Political performance: behaviors associated with, 73–74; case study of, 74–89; leadership based on, 78–79, 81–82 Power: founders’ need for, 146; and leadership based on political performance, 78–79, 81–82 See also Political performance Power theories, and political performance problems, 81–82 19 964093 Index.qxd 10/30/03 10:30 AM Page 189 Index Problem solving: alternative approach to, 4–5, 10–11, 20, 25; conventional approach to, 13–14, 18–19, 20, 178 See also First-order approach to change; Second-order approach to change Problems: changing thinking about, 21–22, 31; nonprofit managers’ assessment of, 23–25; physicians’ diagnosis of, 22–23; presenting, as symptoms, 45–46, 48–49, 59, 61, 64–65 See also Case studies R Rafting on White Water (ROWW) (case study), founder’s syndrome at, 138–140, 141–146, 147, 153–154 Raven, B., 82 Readiness, challenging, as second-order technique, 151–153 Recruitment: of board members, 45–46, 50, 56–57; of new director, role clarification prior to, 101–105 Recruitment disorientation: behaviors typical of, 42, 48–49; case study of, 43–55; how to prevent, 56–57 Reframing: with board member nonattendance problem, 33–34, 52, 53–54; board members’ fundphobia, 133; described, 33; founder’s syndrome behaviors, 147–148; with political performance problems, 83–84, 89; teaching of, 84 Revolutionary paradigm, 158 Reynolds, J (fictitious name), 140–141, 142, 143, 144–146, 147–148, 149–153 Rice, D (fictitious name), 77–78, 78, 80, 82, 86–89 Robbins, S P., 82, 114 Roethlisberger, F J., 163 Rogers, Justin (fictitious name), 138–140, 142–146 Rogers family members (fictitious name), 138, 139, 154 Role confusion: background on, 91–92; case study of, 92–105 Rosenberg, S., 146 S Salary increase, political performance and request for (case study), 75–76, 78–79, 80, 82–86 Schön, D A., 80 Second-order approach to change: with board member fundphobia problem, 129–134; with board member nonattendance problem, 32–35, 49–55, 57–58; deciding when to use, 37–38; defined, 28; example of, 28; with financial management problem, 113–120; with founder’s syndrome behaviors, 144–153; fundamental organizational change as result of, 29, 31; with high staff turnover problem, 63–71; managerial skills required for, 36–38; with political performance problems, 81–86, 88–89; reframing technique of, 33–34; with role confusion problem, 96–105; “what” focus of, 29–30, 36–37 See also Alternative approach to problem solving; Firstorder approach to change Senge, P M., 157 Skills: for financial accountability, 108; to implement second-order change, 36–38; to manage change, 3–6 Snyderman, B., 168 Social perception theory, and high staff turnover, 64 Staff turnover: case study of, 60–71; reasons given by managers for, 60–61, 62; as symptom of cultural depression, 59, 61, 64–65 See also Employees Storytelling, as tool for discussing difficult issues, 101, 117 Supervisors, political performance by (case study), 74–89 Symptoms, presenting problems as, 45–46, 48–49, 59, 61, 64–65 Systems theory, on ripple effect of change, 65, 84 See also Likert’s management systems model T Taylor, B E., 17 Theories: and board member nonattendance, 50–51; and board members’ fundphobia, 127–129; and financial management problem, 113–116; and founder’s syndrome behaviors, 144–147, 172–173; and high staff turnover, 63–64; of organizational behavior, overview of, 161–178; as perspectives for assessing problems, 189 19 964093 Index.qxd 190 10/30/03 10:30 AM Page 190 Index Theories (continued) 24–25; and political performance problems, 81–82, 83; and role confusion problem, 96–99 See also specific theories Thinking about problems, changing, 21–22, 31 See also Reframing Traditional approach to problem solving See Conventional approach to problem solving Tri-State Southern Children’s Chorale (case study), fundraising by board members of, 123–134 Trujillo, M (fictitious name), 60–61 Trust: between board members, 130–131; staff advisory committee as evidence of, 69 Turnover See Staff turnover Two-factor theory, 168 U Unethical behavior, political performance prompted by, of supervisor (case study), 77–78, 80, 82–89 V Vision, and organizational culture, 70–71 Vroom, V H., 169 W Watzlawick, P., 29, 30, 83, 173 Weakland, J H., 29, 30, 83 Werbach, M (fictitious name), 61 Worth, R., 30 Z Zander, A., 162 ... 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. .. 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... 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