46 perception that they are actually more professionally mature and organized than they are in reality in order to attract funding. Alternatively, NPOs can downplay their level of professionalism, organisation and funding in an attempt to attract even more funding (Schuh &
Leviton, 2006) by trying to convince potential funders that they are in dire need of financial resources and somewhat helpless, thereby eliciting their support through the elicitation of the funder’s sympathy. An example from Schuh and Leviton (2006, p. 178) depicts this state of affairs: “As assessment proceeded, it emerged that the agency had a large, profitable subsidiary that did not come up in initial conversations about financial resources. When asked why they did not initially mention the subsidiary, the staff said that they were worried that people would stop giving to the agency if they knew about it.”
Undoubtedly, this presents many issues pertaining to the lack of ethicality and the existence of dishonesty in creating a perception that does not match reality, especially with regards to NPOs that are meant to uphold particular social values and virtues. NPOs should be custodians and guardians of particular social values and virtues, but on the other hand, they do need financial resources to survive in order to keep upholding these social values and virtues. Creating the perception of being more professionally mature can help to attract funding as the givers will be convinced by the seeming professionalism of the organisation that their donations, gifts and grants will go towards the projects indicated by the non-profit. In this way, the NPO will attract more funding with this ‘false’ image than if they had revealed their shortcomings to funders, thus perpetuating such dishonesty even further. Thus, there exists a vicious reinforcing loop in which both donors and non-profits encourage the false representation of the organisation as a means of ensuring financial sustainability.
47 thus has many implications for the organisations embedded in such a world. Although, they mainly refer to organisations in a general sense, volatility, uncertainty, complexity and ambiguity are also trademarks of NPOs, as well as the environments in which they are embedded. In fact, non-profits are even more vulnerable to these forces as they do not have as many resources at their disposal as do conventional enterprises to mitigate the effects of VUCA.
Thus, the survival of a NPO is dependent on many factors specific to the internal operation of the organisation as well as (and even more so) factors arising from the environment in which it is embedded. This is especially relevant if we consider donors, volunteers and government assistance as arising from this external environment as the non-profit sector depends on these agencies as sources of funding for continued existence and sustainability and thus, maintaining good relationships with these stakeholders is of utmost importance (Chen & Bozeman, 2012).
As the size of the NPO increases, the number of functions needed to be performed to keep the organisation operational increases as well, both in number and specialization. This increase in number and specialization of operations is also a direct result of the volatility and complexity within and outside of the organisation. The NPO is not detached from the environment in which it is embedded and is thus at the mercy of its influences. In a complex and uncertain world, NPOs often seek and attempt to utilize the models of operation adopted by successful commercial or for-profit organisations, in the hope that this success can be replicated to ensure the sustainability of the NPO(Anheier, 2000), although this is often not the case (Hannum et al., 2011). It is often the uncertain and challenging nature of the environment in which the non-profit is embedded that often spurs the leaders of such organisations to adopt certain business models in the hope of making the organisation more stable, effective and productive. However, this adaption or reconfiguration to a more business-like approach often forces them to compromise their social missions (Ryan, 1999), thus endangering the essence of the non-profit form.
According to M. Sanders and McClellan (2012), organisations must possess a sufficient amount of internal capacity to match the complexity of the environment in which they are embedded in order to survive and remain operational. However, with the rapidly increasing uncertainties and complexities of the environment in which non-profits are located, many NPOs do not possess the necessary capacity and resources to enable them to survive in such environments (Hannum et al., 2011). This is also why the recipes of for-profit success emulated by NPOs do not seem to work for NPOs as both of these types of organisations have different resources at their disposal, and make use of these resources in different ways from each other, thus giving rise to differing state
48 of affairs in the battle for sustainability. For example, non-profits can appeal to the public for assistance in particularly difficult times due to their dedication to a particular social cause that may appeal to their donors, and thus encourage them to support the non-profit. However, for- profits cannot follow the same approach as the public is very unlikely to donate toward their profit motives. They must therefore rely on the marketing and sale of products or services to ensure their future sustainability.
NPOs often have to deal with much uncertainty regarding their funding environment and potential funders, including increasing competition with other NPOs over such funds(Omura &
Forster, 2014). Even when a non-profit has sufficient funders, it must then deal with the complexity that arises from catering to each of its funder’s requirements and stipulations regarding the use of the donated funds. Even though it is often assumed that NPOs possess no bottom lines, it is their constant need to balance their social missions with the mechanisms they utilize to maintain financial and operational sustainability that often contributes to them having several (sometimes conflicting) bottom lines, thus making their pursuit of sustainability more complex than commercial enterprises (Anheier, 2000). This complexity is heightened by the constant interactions between, and relationships with, various different stakeholders including the board of trustees, volunteers, employees, government funders, commercial partners, etc. as depicted in the diagram below adapted from Hannum et al. (2011, p. 8), without which the non- profit cannot survive:
49 Figure 2-1: Various stakeholders contributing to complexity in, and for, the NPO
Even though each stakeholder as presented in the diagram above is often conceptualized as being disparate, we must realize that the effectiveness or lack thereof of the NPO’s functioning will depend on the energy that is created via the collaboration of all the above stakeholders. Thus, non-profit organisational effectiveness can be interpreted as the emergent property of all interactions with, and between, the various stakeholders and this ‘energy’ is greater than the energy that can be generated by any of the stakeholders alone. This is similar to the idea of
Non-profit organisation
Government partners
Board of trustees
Prospective members/donors
/partners
Volunteers Visitors
Members
Employees Donors
Directors/
Managers/
Leaders
International Directors/
Directives D
50
‘emergence’ in Complexity Theory in which the behavior and nature of a particular system can be attributed to, or emerges from, the collective interactions of multiple agents (Omura &
Forster, 2014), and none of the agents can produce the same system-wide behavior alone.
This is one of the reasons why attempting to understand the NPO by simply examining a single aspect of its existence (such as its relationship with funders, volunteer capacity, leadership ability, etc.) is incapable of rendering a complete and accurate picture of that organisation. Such a perspective ignores the other factors that influence non-profit functioning, as well as downplays the importance of the interactions between the organisation and all those factors impacting it. Such an approach would undoubtedly be much simpler, but it would not be able to accommodate the multiple complexities that NPOs must deal with, and which give rise to their overall behavior and functioning.
There are multitudes of internal and external factors that play a role in determining and influencing the sustainability of NPOs. Previous research has focused on specific factors relating to NPOs such as organisational culture (Lewis, 2003a), management (Lewis, 2003b), worker well-being (Benz, 2005),entrepreneurship capabilities (Dees, 1998), partnerships with corporate entities (Huxham & Vangen, 1996), strategic performance management (Kaplan, 2001), social accounting (Richmond et al., 2003), etc. but there has not been an examination of the holistic forces that contribute to the sustainability of the NPO. This is the gap in the existing literature which this research proposed to address, namely: the NPO’s quest for sustainability in a complex world.
The complexities impacting the NPO from the multiple environments and systems in which it is embedded are partly captured by the following quote from Lewis (2003b, p. 331):
“Many developmental NGO’s operate in unstable, risky or conflict prone areas or operate alongside predatory or ‘failing’ states which may view their presence with suspicion. The context also includes the cultural dimensions of management, since many operational NGOs work with communities very different from themselves and may increasingly combine staff from a wide range of different backgrounds. The NGO context also includes the aid industry and its changing practices, as well as the often precarious political and geographical environments in which development NGOs operate.”
51 As is evident from the above quotation, it is possible for political, cultural, social, educational, financial and environmental factors from within and without the non-profit to exert an influence on its overall functioning.