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The Jossey-Bass Handbook of Nonprofit Leadership and Management Herman.ffirs 8/31/04 3:41 PM Page v S S The Jossey-Bass Handbook of Nonprofit Leadership and Management Second Edition Robert D. Herman and Associates Herman.ffirs 8/31/04 3:41 PM Page ii Herman.ffirs 8/31/04 3:41 PM Page i Herman.ffirs 8/31/04 3:41 PM Page ii Herman.ffirs 8/31/04 3:41 PM Page iii S S The Jossey-Bass Handbook of Nonprofit Leadership and Management Second Edition Herman.ffirs 8/31/04 3:41 PM Page iv Herman.ffirs 8/31/04 3:41 PM Page v S S The Jossey-Bass Handbook of Nonprofit Leadership and Management Second Edition Robert D. Herman and Associates Herman.ffirs 8/31/04 3:41 PM Page vi Copyright © 2005 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, photo- copying, 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: [email protected]. Jossey-Bass books and products are available through most bookstores. To con- tact Jossey-Bass 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 The Jossey-Bass handbook of nonprofit leadership and management/ Robert D. Herman and associates.—2nd ed. p. cm. Includes bibliographical references and index. ISBN 0-7879-6995-8 (hardcover) 1. Nonprofit organizations—Management. I. Herman, Robert D., 1946– HD62.6.J67 2004 658'.048—dc22 2004015799 Printed in the United States of America SECOND EDITION HB Printing 10987654321 Herman.ftoc 8/31/04 3:42 PM Page vii S S CONTENTS Tables, Figures, and Exhibits xi Preface xv The Editor xxiii The Contributors xxv PART ONE: CONTEXT AND INSTITUTIONS 1 1 Historical Perspectives on Nonprofit Organizations in the United States 3 Peter Dobkin Hall 2 Nonprofit Organizations and Social Institutions 39 Jon Van Til 3 The Legal Framework of the Nonprofit Sector in the United States 63 Thomas Silk 4 The Changing Context of American Nonprofit Management 81 Lester M. Salamon 5 The Internationalization of the Nonprofit Sector 102 Helmut K. Anheier, Nuno Themudo vii Herman.ftoc 8/31/04 3:42 PM Page viii viii CONTENTS PART TWO: KEY LEADERSHIP ISSUES 129 6 Board Leadership and Development 131 Nancy R. Axelrod 7 Executive Leadership 153 Robert D. Herman, Dick Heimovics 8 The Strategy Change Cycle: An Effective Strategic Planning Approach for Nonprofit Organizations 171 John M. Bryson 9 Ethical Nonprofit Management 204 Thomas H. Jeavons 10 Nonprofit Lobbying 230 Bob Smucker 11 Strategic Alliances 254 John A. Yankey, Carol K. Willen PART THREE: MANAGING OPERATIONS 275 12 Marketing for Nonprofit Managers 277 Brenda Gainer, Mel S. Moyer 13 Designing and Managing Volunteer Programs 310 Jeffrey L. Brudney 14 Evaluating the Effectiveness of Nonprofit Organizations 345 Vic Murray 15 Managing the Challenges of Government Contracts 371 Steven Rathgeb Smith 16 Outcome Assessment and Program Evaluation 391 John Clayton Thomas PART FOUR: DEVELOPING AND MANAGING FINANCIAL RESOURCES 417 17 Designing and Managing the Fundraising Program 419 Robert E. Fogal 18 Enterprise Strategies for Generating Revenue 436 Cynthia W. Massarsky Herman.ftoc 8/31/04 3:42 PM Page ix CONTENTS ix 19 Financial Accounting and Financial Management 466 Robert N. Anthony, David W. Young 20 Management Accounting 513 David W. Young 21 Risk Management 560 Melanie L. Herman PART FIVE: MANAGING PEOPLE 585 22 Keeping the Community Involved: Recruiting and Retaining Volunteers 587 Stephen McCurley 23 Finding the Ones You Want, Keeping the Ones You Find: Recruitment and Retention in Nonprofit Organizations 623 Mary R. Watson, Rikki Abzug 24 Total Rewards Programs in Nonprofit Organizations 660 Nancy E. Day 25 Principles of Training for Volunteers and Employees 703 Nancy Macduff Conclusion: The Future of Nonprofit Management 731 Robert D. Herman Name Index 737 Subject Index 745 Herman.ftoc 8/31/04 3:42 PM Page x Herman.ftoc 8/31/04 3:42 PM Page xi S S TABLES, FIGURES, AND EXHIBITS TABLES 4.1 Growing For-Profit Competition in Selected Fields, 1982–1997 87 4.2 Growth in Federal Entitlement Program Spending, 1980–1999 91 4.3 Changing Structure of Nonprofit Revenue, 1977–1997 93 5.1 Size of International Nonprofit Sector Activities in Five Countries, 1995 105 5.2 Revenue Structure of International Nonprofit Sector Activities Versus Total Nonprofit Sector in Five Countries, by Revenue Source, 1995 106 5.3 Income of INGOs Registered with USAID, 1982–2001 109 5.4 Phases of INGO Development 119 10.1 Lobbying Ceilings Under the 1976 Lobby Law 244 13.1 Motivation for Involvement in Volunteer Work, 1965–1991 329 17.1 Gift Range Chart Analyzing the Previous Year’s Giving 423 17.2 Gift Range Chart for $500,000 Annual Fundraising Goal 424 17.3 Suggested Guidelines for Fundraising Costs 429 22.1 Reasons Why People Stop Volunteering 609 22.2 Negative Perceptions Among Volunteers in the United Kingdom 609 24.1 Assigning Points to Factor Levels 677 24.2 Job Evaluation Spreadsheet 680 xi Herman.ftoc 8/31/04 3:42 PM Page xii xii TABLES, FIGURES, AND EXHIBITS FIGURES 5.1 Growth in the Number of International Nongovernmental Organizations, 1970–2002 107 5.2 Aid from the OECD to Developing Countries and Share of NGOs as a Percentage of the Total, 1970–1999 108 5.3 Composition of NGO Aid to Developing Countries, 1970–1999 108 5.4 Growth in INGO Membership, 1990–2000, by Region 110 5.5 Growth in INGO Membership, 1990–2000, by Country Income Group 111 5.6 INGOs, 1990–2000, by Purpose 112 8.1 The Strategy Change Cycle 174 8.2 Strategic Planning System for Layered or Stacked Units of Management 195 11.1 The Partnership Matrix 259 11.2 Strategic Alliance Continua 261 11.3 Stages of Strategic Alliance Development 262 12.1 Positioning Map for Hypothetical Immigrant-Serving Agencies 287 14.1 Generic Measurement-Based Logic Model 364 14.2 Generic Level-Based Logic Model 364 19.1 Business Risk Versus Financial Risk 493 20.1 Resource Usage: A Conceptual Framework 517 20.2 Types of Cost Behavior 529 20.3 Fixed and Variable Costs Versus Mission Center and Service Center Costs 531 20.4 Graphic Representation of Revenue, Fixed Costs, and Variable Costs 541 20.5 Phases of the Responsibility Accounting Process 549 22.1 The Volunteer Management Process 588 24.1 Regression Analysis Illustrating the Relationship of Current Salaries to Market Data 672 24.2 Broadbanding Superimposed on a Traditional Salary Structure 684 25.1 Praxis 707 EXHIBITS 6.1 Primary Governance Roles Ascribed to Boards 136 6.2 Board Development Practices Linked to Board Competencies 139 6.3 Sample Governance Committee Job Description 146 6.4 Ingredients of an Effective Formal Board Self-Assessment Process 147 8.1 Balanced Scorecard for the United Way of Southeastern New England 182 Herman.ftoc 8/31/04 3:42 PM Page xiii TABLES, FIGURES, AND EXHIBITS xiii 16.1 Impact Model for a Training Program for Executives of Local Branches of a National Nonprofit 397 17.1 Three Stages of Fundraising Development 420 17.2 Fundraising Management Grid 427 19.1 Sample Statement of Activities for Anderson College for the Year Ended June 30, 2003, with Comparative Figures for 2002 472 19.2 Sample Balance Sheet for Anderson College as of June 30, 2003 and 2002 474 19.3 Examples of Leverage 492 19.4 A System of Ratios 496 19.5 Cash Needs Associated with Growth 497 19.6 Summary of Ratio Computations 503 20.1 Contribution Income Statement for Clearwater Transportation Service 536 20.2 Types of Responsibility Centers 545 20.3 Examples of Cost Drivers in a Hospital 555 20.4 Nonprofit Management Accounting: A Summary 557 21.1 Rating the Risks Identified by an After-School Tutorial Program 569 21.2 Sample Item on a Risk Management Action Plan 570 23.1 Sample Human Resource Audit Checklist 639 23.2 The Candidate Selection Process 646 23.3 Relevant Human Resource Questions as a Reflection of Organization Size and Life Cycle 655 24.1 Selected Sources of Salary Surveys 670 25.1 Training or Lesson Plan 720 Herman.ftoc 8/31/04 3:42 PM Page xiv Herman.fpref 8/31/04 3:42 PM Page xv S S PREFACE ll of us associated with The Jossey-Bass Handbook of Nonprofit Leadership and Management are pleased to have the opportunity to present this sec- A ond edition. Of course, all the chapters have been revised and updated to reflect current research, theory, and practice. Most chapters are again written by the same authorities who wrote the first-edition chapters, though second au- thors have changed in a couple of instances.
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