Explaining Variations in the Nonprofit Founding Process

Abstract

Although the organizational founding process is subject to various isomorphic pressures, significant variation is still found in the completion, ordering, and timing of founding events. Prior research on entrepreneurship suggests the importance of education and previous experience in determining who is best positioned to recognize entrepreneurial opportunities, which may explain some of the variation in the founding process. In this article the authors present an analysis of an original survey of recently founded religious nonprofits to better understand how founder, organizational, and contextual characteristics influence the founding process in this specific nonprofit context. Overall, the authors’ findings show that founder education and experience particularly affect the founding process as well as organizational characteristics; however, these effects vary across different dimensions of this process.

A New Focus on Nonprofit ­Entrepreneurship Research

“…Instead, many undertakings in the process of creating a new nonprofit organization occur before the new entity becomes a formal operational entity. However, when selecting a point in time at which to examine nonprofit entrepreneurship process, much of the existing literature has focused on already incorporated operational nonprofits (Cordes et al ; Van Slyke and Lecy ), disregarding or only retrospectively acknowledging or examining any undertakings taking place before the organization is formally founded (Carman and Nesbit ; Dollhopf and Scheitle ).…”

“…Early imprinting has also begun to generate more traction among nonprofit entrepreneurship scholars. For example, Dollhopf and Scheitle () outline and examine elements in the nascent nonprofit stage with potential imprint implications, including attempts to advertise or otherwise promote the emergent venture, attempts to acquire resources, and board formation. Nonprofit scholars have also stressed growth intentions, market knowledge (Van Slyke and Lecy ), and sector choice motivations (Child et al ) as vital dimensions of the nonprofit entrepreneurial process.…”

“…However, the overall number of creation attempts is seldom mentioned or included in studies looking to quantify nonprofit entrepreneurship activity (Cordes et al ). Most nonprofit entrepreneurship studies, even those seeking to investigate nascent stage phenomena (Dollhopf and Scheitle ), capture only the processes that lead to the creation of formal and operational nonprofits. As Davidsson (, 3) eloquently formulates it, such an approach is “equivalent to studying gambling by exclusively investigating winners.”…”

“…Scholarly attention to nonprofit entrepreneurship is far from new (Young ). Still, interest in the creation of new nonprofits has grown recently, as evidenced by the increasing number of conceptual and empirical studies devoted to vital nonprofit entrepreneurship issues, including the motivations and intentions of nonprofit entrepreneurs, decision‐patterns in nonprofit start‐ups, and properties of emerging and recently founded nonprofit organizations (Carman and Nesbit ; Child, Witesman, and Braudt ; Dollhopf and Scheitle ; Haugh ; Van Slyke and Lecy ). Although scholarship has made several important contributions to our understanding of the creation of new nonprofits, it is not without shortcomings.…”

Entrepreneurship among Nonprofit Arts Organizations: Substituting between Wage and Flexible Labor

“…For example, in studying nascent nonprofit organizations, Andersson () identifies a common set of capacities among entrepreneurs necessary for organizational survival, including well‐developed venture concepts and a good understanding of the market to be served. Other work has identified the motivations of nonprofit founders for electing to form new organizations (Carman and Nesbit ) and attributes of individual founders associated with nonprofit start‐ups' success, including education, experience (Dollhopf and Scheitle ), and attitudes such as openness to change (Sastre‐Castillo, Peris‐Ortiz, and Danvila‐Del Valle ). In examining the broader literature on social entrepreneurship, Guo and Bielefeld distilled the traits of social entrepreneurs as being opportunistic, virtuous, having balanced judgment, and risk endurance (Guo and Bielefeld ).…”