The Importance of Planning: How Financial Management Competencies Affect the Performance of Nonprofit Organizations

Abstract

Financial management is vital to the survival of nonprofit organizations and their ability to fulfill their mission. Financial management is composed of a diverse range of tasks which require specific competencies for the success of an organization. This study explores different financial management competencies and their effect on nonprofit financial and organizational performance. Based on survey data from Swiss nonprofit organizations, a set of six distinguishable financial management competencies are derived and applied within a structural equation model. The study finds that self-assessed financial management competencies have significant effects on both the perceived financial and perceived organizational performance of nonprofits. The findings reveal that strategic financial planning competencies have the strongest effect on financial performance, and budgeting competencies have the strongest effect on the organizational performance. The study adds to the understanding of the role of different financial management areas and underlines the importance of administrative capacities for organizational success.

Exploring the Impact of Board Member Financial and Time Contributions on Nonprofit Fiscal Performance

“…The positive relationship between board member time contribution and fiscal performance measures has not been well explored in prior research. More common are studies that suggest connections between mission-based performance and board commitment (Preston & Brown, 2004); board member involvement in strategic planning (LeRoux & Langer, 2016); board member competence (Brown, 2007;Stuhlinger, 2022); and board members' ability to span boundaries (Cody et al, 2022). Perhaps what is being captured in this study is less the value of time per se than the time it takes for board members to apply their experience and expertise (Olson, 2000) and/or to reach out and secure resources required for financial sustainability and resilience (Brown & Guo, 2010;Burt, 2004;Collins, 2005).…”

“…Future research could include additional variables for board member characteristics and board dynamics. For example, organizational variables might include annual budget, asset portfolio, and volunteer versus paid workforce size (Liu & Kim, 2022) and board-related variables might include financial competencies (Stuhlinger, 2022), board boundary spanning (Cody et al, 2022), and board meeting practices (Van Puyvelde et al, 2018). Even better would be a longitudinal study that separated independent and dependent variables in time (Cornforth, 2011) and employed longer-term measures of nonprofit sustainability such as an improving relationship between revenues and expenses over time or the generation of consistent operating surpluses (Bowman, 2011).…”

“…Much has been written about the boards' responsibility to secure and manage adequate financial resources (e.g., Brown & Guo, 2010;Fritz, 2019;Houle, 1997) and about the importance of making good use of board members' time (Van Puyvelde et al, 2018) and expertise (Stuhlinger, 2022). However, these board member contributions of time and money have seldom been linked to fiscal performance, as opposed to broader measures of performance (Taysir & Taysir, 2012).…”

Promoting Diversity and Inclusion in the Federal Workforce: Executive Order 13583 and Demographic Trends

“…In addition, it is important to consider the broader and long-term intended outcomes of these initiatives. If the goal of representative bureaucracy is to better serve all citizens, public administrators must also consider the ways in which demographic changes in public agencies translate into improved results for the diverse members of society (Weimer and Zemrani, 2017). Theoretically, we would expect that gains in organizational diversity will ultimately-and positively-impact both service effectiveness and citizen satisfaction.…”

Introduction to the Special Issue on Cannabis Policy in the United States: Challenges and Opportunities for Public Administration and Policy

“…Cultural competency and social equity advance the notion that public organizations should deliver services in a manner that is fair, just and mindful that citizens' cultural beliefs may differ from the administrator providing the service (Weimer and Zemrani, 2017;Rice, 2011;Norman-Major and Gooden, 2012;Frederickson, 1990). The pursuance of this goal requires public administrators to be cognizant of environmental and cultural differences within communities and adapt service delivery strategies to accommodate them (Wyatt-Nichol and Antwi-Boasiako, 2008;Rice, 2007;Hurdle, 2002;Geron, 2002).…”