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Strategic Leadership and Management in
Nonprofit Organizations
i   j
Strategic Leadership and

Management in Nonprofit
Organizations
Theory and Practice
Second edition
Martha Golensky
Grand Valley State University
Mark A. Hager
Arizona State University
i   j
1
1
Oxford University Press is a department of the University of Oxford. It furthers
the University’s objective of excellence in research, scholarship, and education
by publishing worldwide. Oxford is a registered trade mark of Oxford University
Press in the UK and certain other countries.
Published in the United States of America by Oxford University Press

198 Madison Avenue, New York, NY 10016, United States of America.
© Oxford University Press 2020
First Edition published in 2011

Second Edition published in 2020
All rights reserved. No part of this publication may be reproduced, stored in

a retrieval system, or transmitted, in any form or by any means, without the
prior permission in writing of Oxford University Press, or as expressly permitted
by law, by license, or under terms agreed with the appropriate reproduction
rights organization. Inquiries concerning reproduction outside the scope of the
above should be sent to the Rights Department, Oxford University Press, at the
address above.
You must not circulate this work in any other form

and you must impose this same condition on any acquirer.
Library of Congress Cataloging-in-Publication Data

Names: Golensky, Martha, author. | Hager, Mark A., author.
Title: Strategic leadership and management in nonprofit organizations:
theory and practice / Martha Golensky, Grand Valley State University,
Mark A. Hager, Arizona State University.
Description: Second Edition. | New York : Oxford University Press, 2019. |
Revised edition of Strategic leadership and management in nonprofit organizations, c2011.
Identifiers: LCCN 2019032301 (print) | LCCN 2019032302 (ebook) |
ISBN 9780190097844 (paperback) | ISBN 9780190097868 (epub) |
ISBN 9780190097851 (updf)
Subjects: LCSH: Nonprofit organizations—Management. |
Nonprofit organizations. | Strategic planning.
Classification: LCC HD62.6 .G64 2019 (print) | LCC HD62.6 (ebook) |
DDC 658.4/092—dc23
LC record available at https://lccn.loc.gov/2019032301
LC ebook record available at https://lccn.loc.gov/2019032302
9 8 7 6 5 4 3 2 1
Printed by Marquis, Canada

i
Contents
Preface ix
Acknowledgments xiii
Instructor Resources xv
Section 1 | Understanding the Nonprofit Sector

Key Themes 2
1. Definition of a Nonprofit Organization 3

What’s in a Name? 3
Turning a Negative into a Positive 5
Final Thoughts, Questions to Consider, and Selected Readings 11
References 12
2. Historical Moments in the U.S. Nonprofit Sector 13

Tracing the Evolution of the U.S. Nonprofit Sector 14
The Human Services Subsector 21
References 26
3. Political and Economic Considerations 28

Theories of Change 29
The Example of Managed Care 30
The Ties That Bind 32
The Permeability of Sector Boundaries 35
References 45
Section 2 | Leading in Turbulent Times

Key Themes 48
Conflicting Agendas for the Future of a Youth Agency, Part 1 48
v
vi i Contents
4. The Nature of Leadership 53
The Meaning of Leadership 54
A Shared Leadership Model 60
The Board–Executive Relationship 63
References 74
5. The Practice of Leadership 77

Organizational Culture 78
Leadership Versus Management 82
Transformational and Transactional Leaders 82
Performing Multiple Roles 85
References 94
6. Decision-Making 96
Decision-Making Strategies 97
Practical Considerations 101
Six Thinking Hats 108
References 113
7. Organizational Change 115

The Ubiquity of Change 116
Managing Change 122
Strategies for Change 129
References 137
Section 3 | Securing Material Resources

Key Themes 142
8. Strategic Planning 147

Strategic Planning Models 156
References 165
Appendix 8A: Report of the Youth Services Network (YSN) Strategic Planning
Committee (Excerpts) 167
9. Program Development 171

Project Development 172
Program Planning 174
Contents j vii
Program Monitoring 181
Program Evaluation 186
References 193
10. Resource Generation 195

Basic Principles of Resource Generation 196
Philanthropic Fundraising 201
Government Support 209
Commercial Ventures 211
References 216
Appendix 10A: Glossary of Selected Resource Generation Terms 218
Appendix 10B: Sample Proposal Letter 219
11. Financial Performance Indicators 221

Fiscal Fundamentals 222
The “New” Cutback Management 233
Performance and Effectiveness 237
References 240
12. Technology and Communication 242

The Basics of Effective Communication 243
Technology and Internal Communication 245
Technology and External Communication 252
References 260
Section 4 | Maximizing Human Resources

Key Themes 264
Presentation of the Strategic Plan 266
13. Leadership by Example 269

Basic Ethical Principles 270
Providing Ethical and Moral Leadership 273
Risk Management 278
References 286
14. Human Resources Management 289

Promoting Job Satisfaction and Commitment 290
Practical Considerations in Human Resource Management 293
Addressing Diversity in the Workplace 308
References 313
viii i Contents
15. The Nonprofit Governing Board 315
An Overview of Effective Governance 316
References 334
16. Volunteer Administration 336

An Overview of Volunteerism 337
Elements of Effective Volunteer Management 343
References 356
About the Authors 359

Index 361
Preface
i
Welcome to the second edition of Strategic Leadership and Management in Nonprofit
Organizations! The first edition was written wholly by Martha Golensky, a culmination
of knowledge and experience she gained through fifteen years as a nonprofit executive
and twelve years as a full-time university professor, teaching nonprofit management
courses, conducting research on leadership and decision-making, and providing con-
sultation to local organizations on management issues. In the second edition, Golensky
is joined by Mark Hager, who directs the master’s degree in nonprofit leadership and
management at Arizona State University. Fans of the first edition will be glad to know
that this revised edition maintains the bones and content of the original edition.
So what’s new? Many of the classic references that have had so much influence on
the field are still here, but we have updated each chapter with new thinking and re-
search from the past decade. When statistics are used to provide context for a par-
ticular topic, we have updated those. In some chapters, Hager has added more flavor
that reflects his expertise—for example, you will find expansions in the chapter on
volunteer administration, a topic on which Hager has written extensively. Perhaps the
biggest change is in our references to technology, which has influenced the nonprofit
workplace in every way over the past decade. When the first edition of this book was
written, social media and smartphones had not been invented yet. Now, they are fun-
damental parts of our lives, and nonprofits make use of them every day to interact
with their stakeholders. So, the second edition of Strategic Leadership and Management
in Nonprofit Organizations melds classic research with new thinking on how best to run
nonprofits.
ix
xi Preface
Although the book incorporates the work of many scholars in the field of nonprofit
and philanthropic studies, it is fundamentally practical in its orientation. It takes as
its departure point the smorgasbord of challenges facing real-life decision makers in
today’s world—challenges around service delivery, staff performance, financial sta-
bility, interaction with a board of directors, strategic planning, program effectiveness,
volunteer engagement, and uses of technology.
The principal audience for the book is students of the nonprofit sector. This includes
professionals who are about to or have recently entered the workplace as interns,
employees, or volunteers, in direct practice or a supervisory role. Our goal is to help
you understand how nonprofit organizations function and to increase your apprecia-
tion of the conflicting demands on the board and top management team. More expe-
rienced staff, especially those engaged in the daunting task of effecting organizational
change, may also find the book a useful resource. Workers at all levels must have both
technical competency and the ability to navigate skillfully through the intricacies of
the work culture.
A distinctive feature of the book is the use of an extended case study to illustrate
different leadership and management issues. The case, which Golensky wrote to use in
the classroom, is based on the experience of a real human service organization. Unlike
most case studies, this one tells the organizational story from two viewpoints: the ex-
ecutive director and the board president. These two important leaders disagree on
the best strategy for the agency’s future. Thus, the case mimics real life, where critical
decisions are seldom simple. By addressing a range of significant organizational issues
as seen through the eyes of the key decision makers, the case featured in this book
should stimulate both personal reflection and lively discussion about basic concepts,
processes, and their consequences.
In addition to the case study, the book includes many examples of the issues non-
profit leaders and senior managers face. Some are relatively new concerns, such as
how to incorporate individuals who wish to volunteer only now and then, or episodic
volunteers. Some have a long tradition, like promoting the effectiveness of the board
of directors. Although many of the examples in the book are drawn from the human
services, they depict situations common to a variety of nonprofit organizations.
Organization
The book is organized into four sections. The introduction to each section summarizes
the contents and lists key themes. Portions of the case study, addressing many of these
same themes, appear in the introductions for sections 2, 3, and 4. The last part of
the case, containing the resolution of the conflict between the two main characters,
appears only in the accompanying teacher’s manual, so readers can reach their own
conclusions about the issues in the case. Each chapter ends with discussion questions
and recommended reading.
Preface j xi
Section 1 provides the context for the rest of the book. Here the focus is on the char-
acteristics of a nonprofit organization, with an explanation of the specific attributes
of both charitable and member-serving nonprofits. We also consider the historical de-
velopment of the nonprofit sector as a whole and of the human services subsector in
particular. This section also features a review of the political and economic climate in
which nonprofits must operate.
In section 2, the concept of leadership is examined from several perspectives,
starting with general theories of leadership and the particular structure of leader-
ship in a nonprofit. Next, the multiple roles of the nonprofit professional leader are
delineated, to recognize that the same person may serve as manager and adminis-
trator, motivated by different priorities when functioning in each capacity. Ethical is-
sues are also considered. The last two chapters in this section are concerned with the
theoretical and practical aspects of decision-making and the relationship between or-
ganizational culture and organizational change, a critical element of present-day lead-
ership and management in nonprofits.
Sections 3 and 4 address the specific skills of the nonprofit leader involved in
securing material resources and managing human resources, respectively. In section
3, strategic planning, program planning and evaluation, resource generation, organi-
zational performance indicators, and technology and communication are the areas of
emphasis.
Section 4 includes chapters dealing with leadership to create and protect a culture
of integrity, human resource management, and the practical aspects of board govern-
ance. We end with a focus on the role of volunteers and the need for organizations to
provide good experiences if they want volunteers to keep coming back.
A teacher’s manual has been prepared to accompany the text. It contains suggestions
on ways to present the information covered in each of the book’s chapters as well as
exercises and assignments suitable for applying what has been learned to everyday
practice. With a few exceptions, this is original material that Golensky developed over
the years and tested thoroughly in the classroom, with a few additions from Hager.
Also included is Golensky’s version of a management audit, which might be an effec-
tive final course project.
Acknowledgments
i
Thank you to Martha Golensky for inviting me to contribute to the second edition
of this great textbook. This work is hers, and I am humbled to be part of it. Thank you
to Kathy Renfro for her research assistance as we worked through the updates and
revisions. Martha Golensky wishes to thank again all of the people who contributed to
the first edition of this book.
Mark Hager
xiii
Instructor Resources
i
The Oxford University Press Ancillary Resource Center (ARC) houses an
Instructor’s Manual with teaching tips, exercises, and worksheets. To access these
materials, please visit www.oup.com/he/golensky2e.
xv
Section 1
Understanding the Nonprofit Sector
i 
The first part of this book aims to introduce readers to the nonprofit sector in
the United States, although some of the material may be applicable to nonprofits
in other countries as well. The intent is to establish the context for the rest of
the book by providing useful definitions and background information about the
sector, and especially health and human services.
Chapter 1 identifies the different types of nonprofit organizations, including
those classified as public charities under section 501(c)(3) of the Internal Revenue
Code since those are the ones we give the most attention to in this book. The
chapter also notes the part of the nonprofit sector that serves members rather
than clients, including mutual benefit organizations.
Chapter 2 offers an overview of the historical development of nonprofits in the
United States. It also provides specific background information on human service
organizations (HSOs) for several reasons: They represent the largest and most di-
verse subgroup of charitable nonprofits, they are arguably the nonprofits most
recognized by the general public, and the case study that is used throughout the
book deals with situations occurring in an HSO.
Chapter 3 explores the external political and economic climate in which
nonprofits must operate and the ramifications of this environment on internal
decision-making by top leaders. It also explores the interrelationships among the
three sectors of society.
2i Understanding the Nonprofit Sector
Key Themes
Chapters 1 to 3 address these topics and concerns:

• The distinguishing characteristics of a nonprofit organization: What makes a
nonprofit a nonprofit, and why does it matter?
• The role of nonprofits in American society from colonial days to the present: What
historical circumstances must be considered to understand the contemporary
nonprofit sector?
• The evolution of the human services subsector: What sets an HSO apart from
other types of nonprofits?
• The impact of the external political-economic climate on internal operations and
strategic decision-making: Why is political economy theory so applicable to non-
profit organizations today?
• The dynamic relationship between nonprofits and government: What are the
driving forces that have shaped their interactions over time?
• The multifaceted dimensions of the relationship between nonprofits and the
business sector: Is commercialization of the nonprofit sector a positive or nega-

tive development?
1
Definition of a Nonprofit Organization
i 
Harvard College, founded in 1636, holds the distinction of being the first char-
itable corporation founded in the American colonies, although it lacked many of the
characteristics now associated with such organizations. By the middle of the eight-
eenth century, a variety of voluntary entities had been formed, but only since the
latter part of the twentieth century have nonprofits begun to occupy a place of major
importance in American society. Today, nearly 1.6 million nonprofits contribute their
richness to our culture. Most of those are very small, but a few are large, well-known,
and influential. This chapter establishes the parameters of the nonprofit world, with
attention to organizations qualifying as public charities as well as those primarily
serving their own members.
What’s in a Name?
Generally speaking, we can identify three major sectors of society: government, also
known as the public sector; business, often called the corporate sector; and voluntary or-
ganizations, usually referred to as the nonprofit sector. If the average person were asked
to describe the purpose of the first two of these, he or she would most likely respond
that governments exist to protect and promote the interests of the general public, and
businesses exist to turn a profit (O’Neill, 2002).
However, this little exercise is not so simple when we turn to nonprofits, which
come in many shapes and sizes. If that same average citizen were asked for examples
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The Path to Paris. The Record of a Riverside Journey from
Le Havre to Paris. 62 Illustrations. Cloth. 8vo. $5.00 net. Postage 20
cents.
⁂ A delightful account of a journey along the banks of the Seine.
Impressions and adventures. Descriptions of historic and artistic
associations. Of special value are the remarkable illustrations by
Hanslip Fletcher.
VERNON LEE
Uniform sets boxed. 8 vols. Cloth. $12.00 net. Express extra.
$1.50 net each. Postage 10 cents.
Limbo and Other Essays: “Ariadne in Mantua”

Pope Jacynth, and Other Fantastic Tales
Hortus Vitæ, or the Hanging Gardens
The Sentimental Traveller
The Enchanted Woods
The Spirit of Rome
Genius Loci
Hauntings
⁂ “If we were asked to name the three authors writing in English

to-day to whom the highest rank of cleverness and brilliancy
might be accorded, we would not hesitate to place among them
Vernon Lee.”—Baltimore Sun.
ELIZABETH BISLAND
The Secret Life. Being the Book of a Heretic.
12mo. $1.50 net. Postage 10 cents
“A book of untrammelled thought on living topics ... extraordinarily
interesting.”—Philadelphia Press.
“Excellent style, quaint humor, and shrewd philosophy.”—Review
of Reviews.
W. COMPTON LEITH
Apologia Diffidentis. An intimate personal book.
Cloth. 8vo. $2.50 net. Postage 15 cents.
⁂ “Mr. Leith formulates the anatomy of diffidence as Burton did
of melancholy; and it might almost be said that he has done it
with equal charm. The book surpasses in beauty and distinction
of style any other prose work of the past few years. Its charm is
akin to that of Mr. A. C. Benson’s earlier books, yet Mr. Benson at
his best has never equalled this.... A human document as striking
as it is unusual.... The impress of truth and wisdom lies deep
upon every page.”—The Dial.
THE CREED OF BUDDHA
By the author of “The Creed of Christ.” Cloth. 12mo. $1.50
net. Postage 10 cts.
⁂ An able study of the inner faith of the founder of Buddhism,
containing many conclusions diametrically opposed to popular
views.
THE CREED OF CHRIST

By the Author of “The Creed of Buddha.” Cloth. 12mo. $1.25
net. Postage 10 cents.
⁂ “As remarkable as ‘Ecce Homo.’”—Rev. R. J. Campbell.
⁂ “Able and well written.”—The Living Church.
FREDERIKA MACDONALD
The Iliad of the East. A Selection of Legends drawn from
the Sanskrit Poem The Rāmāyana. Illustrations and Cover
Design by J. Lockwood Kipling. Cloth. 12mo. $2.00 net.
Postage 12 cents.
⁂ The Rāmāyana is one of the great epics of the East,
corresponding to the Homeric poems of Greece. The purpose of
the author has been to bring to the Western readers the beauties
of mind and imagination contained in Oriental literature.
DR. A. S. CRAPSEY
The Re-Birth of Religion
Cloth. 12mo. $1.50 net. Postage 12 cents
⁂ It is the author’s purpose to make clear why it is that the
intellectual world has rejected, and must continue to reject,
dogmatic teaching. He also endeavors to explain why moral
earnestness and enthusiasm for humanity must seek expression
outside, rather than inside, the various ecclesiastical
organizations.
“Strongly marked by admirable sincerity of purpose.... The author
is well fitted to his task by a transparent honesty, a marked
scholarship, and an enviable lucidity of diction.”—The Argonaut.
“It would be a delightful task to read more books from this heretic
who writes in such simple, clear style on the most abstruse
topics.”—The Toronto Globe.

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Strategic Leadership and Management

in Nonprofit Organizations: Theory and

Employee Engagement in Nonprofit Organizations: Theory

Strategic Management: Theory and Practice

Human Resources Management for Public and Nonprofit

eTextbook 978-0131753723 Strategic Marketing for

Human Resources Management for Public and Nonprofit

Leadership: Theory and Practice 8th Edition, (Ebook

Creating Your Strategic Plan: A Workbook for Public and

Managing Nonprofit Organizations in a Policy World

Strategic Leadership and

Published in the United States of America by Oxford University Press

© Oxford University Press 2020

First Edition published in 2011

All rights reserved. No part of this publication may be reproduced, stored in

You must not circulate this work in any other form

Library of Congress Cataloging-in-Publication Data

Printed by Marquis, Canada

Section 1 | Understanding the Nonprofit Sector

1. Definition of a Nonprofit Organization 3

2. Historical Moments in the U.S. Nonprofit Sector 13

3. Political and Economic Considerations 28

Section 2 | Leading in Turbulent Times

5. The Practice of Leadership 77

7. Organizational Change 115

Section 3 | Securing Material Resources

8. Strategic Planning 147

9. Program Development 171

10. Resource Generation 195

11. Financial Performance Indicators 221

12. Technology and Communication 242

Section 4 | Maximizing Human Resources

13. Leadership by Example 269

14. Human Resources Management 289

16. Volunteer Administration 336

About the Authors 359

Chapters 1 to 3 address these topics and concerns:

The White Dove

The Demagogue and Lady Phayre

At the Gate of Samaria

The Red Lily. Translated by Winifred Stephens.

The Well of Saint Clare. Translated by Alfred Allinson.

Mother of Pearl. Translated by Frederic Chapman,

The Procurator of Judea

The Garden of Epicurus. Translated by Alfred R.

In the Elysian Fields

The Rat Trap

The Story of Eden

⁂ A stirring romance dealing with fashionable life in New York

Widdicombe: A Romance of the Devonshire

THOMAS BAILEY CLEGG

Anthony Trollope. 16 volumes in dark olive green cloth or

Flexible leather, $12.00 net Cloth, $8.00 net Express 50 cents

George Borrow. 5 volumes in dark olive green.

Flexible leather, $3.50 net Cloth, $2.50 net Express 25 cents

Beaconsfield. A reissue of the Novels of the Earl of

⎧ The Young Duke

Limbo and Other Essays: “Ariadne in Mantua”

⁂ “If we were asked to name the three authors writing in English