Organizational Effectiveness Reputation in the Nonprofit Sector

ABSTRACT:

Public organizations are increasingly relying on nonprofit partners for the delivery of public services, a trend that makes performance assessments of nonprofit organizations important for the allocation of government resources. However, nonprofits engage multiple stakeholders, and this leads to complex sets of organizational goals and highly subjective assessments of nonprofit effectiveness. We develop a literature-based model to understand the subjective assessments of organizational performance by stakeholders that taken together constitute an organization’s effectiveness reputation. In this model, effectiveness reputation is impacted by stakeholder trust and satisfaction, which are in turn impacted by output ambiguity and stakeholder involvement. We find support for our model with a structural equation modeling (SEM) analysis based on survey data of organizational stakeholders (n = 284). We propose further research steps and highlight practical implications for nonprofit managers and public administrators.

KEYWORDS::

• effectiveness reputation
• nonprofit effectiveness
• output ambiguity
• performance
• satisfaction
• stakeholder involvement
• stakeholders
• trust

Additional information

Notes on contributors

Jurgen Willems

Jurgen Willems is a postdoctoral researcher (Habilitand) at the University of Hamburg. He holds a Ph.D. in Applied Economics from the Free University of Brussels (VUB), was a researcher in Operations and Technology Management at the Vlerick Business School (Ghent), and has been a visiting scholar at the Midwest Center for Nonprofit Leadership at the University of Missouri in Kansas City. His research focuses on performance management in private, public, and nonprofit organizations, and on the management of volunteers.

Marc Jegers

Marc Jegers is Professor of Managerial Economics at the Vrije Universiteit Brussel. He graduated from the University of Antwerp as a commercial engineer, and earned his Ph.D. in economics from the University of Ghent. His research interests are concentrated in the field of managerial economics of nonprofit organizations. He has published in a wide range of journals of (nonprofit) management, finance and accounting, and competition policy.

Lewis Faulk

Lewis Faulk is an Assistant Professor in the Department of Public Administration and Policy at American University’s School of Public Affairs. His research focuses on nonprofit management, nonprofit finance, and the intersection of nonprofit organizations and public policy. He holds a Ph.D. in public policy with a concentration in nonprofit and public management from the joint Ph.D. program in public policy at Georgia State University and the Georgia Institute of Technology.