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JJJooouuurrrnnnaaalll ooofff IIIdddeeeooolllooogggyyy A Critique of Conventional Wisdom

An electronic journal at:

www.lsus.edu/journalofideology

NONPROFIT IDEOLOGIES: ACTIONS SPEAK LOUDER THAN WORDS

Julianne Gassman, Ph.D.

Norman A. Dolch, Ph.D.

Ann M. Kinnell, Ph.D.

Stephanie Krick, Ph. D.

Regan H. Schaffer, Ph.D.

and

SueAnn Strom, Ph.D.*

Journal of Ideology

Volume 34, 2012

NONPROFIT IDEOLOGIES: ACTIONS SPEAK LOUDER THAN WORDS

INTRODUCTION

One of the worst things the nonprofit sector has ever done to itself is define itself

by using the term “nonprofit” (Light, 2002). There is growing concern about the

landscape of the nonprofit sector, its role, and the increasing use of business-like

practices (Daley, Netting & Angulo, 1996). The nonprofit sector is searching for

sustainable solutions to social problems in an economy by embracing business practices

(Herzlinger, 1996; Van Til, 2000; Weisbord, 1998). “One reason being business-like

remains so popular is that the nonprofit sector has yet to build a distinctive, aspirational

definition of the term “nonprofit-like”’ (Light, 2002, p. 25). As a result, nonprofit

ideology, while not consistently defined or universally accepted, is being called into

question (Brainard & Siplon, 2004; Bush, 1992; Eikenberry & Kluver, 2004). Sanders

(2012) stated, “At the same time, this trend represents the encroachment of a corporate

ideology that may threaten the nonprofit sector’s unique role in society” (p. 179).

Light (2002) pointed out that the nonprofit sector does not need to look toward

business or the government to become high performing or more business-like, as it has

hundreds of its own success stories from which to learn. “All it has to do is understand

what those stories mean” (Light, 2002, p. 2). The stories of the nonprofit sector,

identified through their actions, can give insight into identifying nonprofit ideologies.

Given the essential role of nonprofit organizations and the nonprofit sector as a whole

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throughout history and in today’s society (Hasenfeld, 2010), the goals, expectations and

actions of the sector, need to be clearly defined. The nonprofit sector and its ideologies

need to be defined by what it is, not what it is not, as pointed out by Light (2002). A look

at the actions of nonprofit organizations over the past three years, particularly during the

Great Recession, will give some insight into the stability of nonprofit ideologies or give

evidence that nonprofit ideologies are shifting and corporate ideology is threatening the

role of the nonprofit sector.

Benton (2011) stated, “nonprofit signals a tax status, not a belief system or a

commitment to any particular ideals…” (para. 1). In a study of nonprofit journalism, Pew

Research Center’s Project for Excellence in Journalism found that 44% of nonprofit

newsrooms portrayed political ideologies. Some sites were right-of-center, while others

left-of-center (Benton, 2011). Often the political ideological battle creates a challenge in

defining one ideological foundation for the nonprofit sector. While the term nonprofit

technically indicates a tax status, the nonprofit sector is not without ideologies, political

ideologies, or otherwise. In addition, there is consideration of the idea that nonprofit

ideology is being tested due to the onset of business, market driven practices being

adopted by a sector that exists to serve the common good.

The purpose of this study is to identify nonprofit ideologies. Given the pressure

on nonprofit sector to adopt business-like processes, it is vital to determine if the

changing nonprofit practices are changing the ideologies that drive the sector and its

stakeholders. Defining an ideology may signify a change, or it may give stability to a set

of ideals and practices. An analysis of a survey sent to nonprofit organizations throughout

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the U.S. over a three-year period on the actions taken by nonprofit organizations can be

used to identify nonprofit ideologies. It is important to note that this study was conducted

from 2009 through 2011. This time has been termed the Great Recession. Actions of

nonprofit organizations during challenging economic times will provide an interesting

perspective on the ideologies of a sector typically fueled by mission-driven motives.

THE ROOTS OF THE NONPROFIT SECTOR

Alexis De Tocqueville’s Associationalism

One of the most widely referenced authors whose observations of Americans

became the roots of the nonprofit sector is Alexis De Tocqueville. De Tocqueville and

Gustave de Beaumont, both Frenchman that studied American society, made observations

about the new world that foreshadowed how present day society evolved over time. Many

of the descriptions from the 1800s are still relevant in today’s governments and societies.

In his book Democracy in America, Alexis de Tocqueville noted, “In no country in the

world has the principle of association been more successfully used, or applied to a greater

multitude of objects, than in America” (De Tocqueville, 1863, p. 242). De Tocqueville’s

discussion on associationalism “…stressed volunteerism, community spirit and

independent associational life as protections against the domination of society by the

state, and indeed as a counterbalance which helped to keep the state accountable and

effective” (Lewis, 2002, p. 571). Throughout De Tocqueville’s book, he continually

mentions the ideals of American citizens that enabled the founding members of the

United States to associate with one another to meet the needs of their communities, states,

and nation.

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Benjamin Franklin is an essential part of American nonprofit history (Miller,

1993). Franklin co-founded the first non-for-profit American community hospital (Miller,

1996) and as such demonstrated the associationalism discussed by De Tocqueville.

According to Boorstin (1987) Franklin combined “business sense with an eye on

community” (p. 204). Franklin reconstructed “charity”, had a philanthropy approach that

was circular, and believed that “Community-driven philanthropy puts the recipient in a

position to contribute to the enlargement of the community by equipping him to be a

productive worker” (Miller, 1996, p. 15). Miller (1996) noted that, “Voluntary

associations that are truly community-minded offer a way out of bureaucracy’s

monolithic maze” (p. 13). Adams (1986) explained that voluntary associations are the

hallmark of democratic society “…in which the individual through association with

others gets a piece of the action. It its actual articulation it involves an exercise of power

through organization” (p. 173).

This early observation of the role of associations, which gave birth to the

nonprofit, voluntary sector, “…tended to stress the role of civil society as one in which

some kind of equilibrium was created in relation to the state and the market” (Lewis,

2002, p. 571). The ideals that allowed Americans the ability to form associations created

a firm foundation for the nonprofit sector as it currently exists in the United States.

Today, the role of equilibrium played by nonprofit organizations is called into question

(Brainard & Siplon, 2004; Bush, 1992; Eikenberry & Kluver, 2004). It appears that the

adoption of business-like practices is shaking the foundation of nonprofit ideology;

however this philosophical and contextual tradition of unity through association has

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provided the foundation for the unquestionable growth (Salamon, 2003) of the sector as

well as the impact the sector is known for today.

The Institutional Theory of Radhamakal Mukerjee

Reviewing economic theories also gives insight into the existence of the nonprofit

sector and its ideological foundation from a business perspective. Research on nonprofit

economics explains that the birth of the nonprofit sector came from the failures of the

government and business sectors (Jegers, 2008); however the challenges with failure

theories are well documented (Steinberg, 2006). The short sidedness of some theories

have given reason to consider “ideological entrepreneurship” theory that gives

acknowledgment to ideologies such as altruism, mission drivenness and social values

(Rose-Ackerman, 1996). Still, “…the ideological entrepreneurship theory does not

systematically derive this motivation from the broader institutional framework of the

market economy” (Valentinov, 2011, p. 606).

Hodgson (1998) and Samuels (1995) contended that original economics embrace

an ideology of holism. The institutional economist Radhamakal Mukerjee (1889-1968)

declared the nonprofit sector the “…highest form of social cooperation” (Valentinov,

2011, p. 606). Mukerjee’s (1942) holistic perspective contributes to the idea that society

is a unity that brings meaning to groups and their role in society. Cooperation, more than

a struggle for existence, is the pervasive characteristic between people and institutions.

According to Mukerjee (1921, 1925), voluntary groups are the epitomes and in position

to escape the dissipations of the individualism of the market sector and the centralization

of the government sector. Valentinov (2011) stated, in an attempt to reexamine the

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contributions of Mukerjee’s theoretical legacy, “…the role of the nonprofit sector is

adjusting the operation of the economy to the broader societal values, in realizing shared

and integrated interests, and enabling a meaningful citizenship in an inevitably coercive

state” (p. 607).

In order to maintain equilibrium between institutions, the nonprofit sector

provides the “value adjustment” needed for society to continue to move toward broader

societal meaning and it is these broad societal ideologies that are most important in

society. In the words of Valentinov (2011),

The role of the nonprofit sector is seen in adjusting resource allocation not

according to the standard of competitive equilibrium, but to that of the broader

societal values. Thus, in contrast to the modern nonprofit economics literature,

the latter values are responsible not merely for the supply of nonprofit

organizational form by ideological entrepreneurs, but also for the demand for, or

economic justification of, the nonprofit sector activities. The dualism between the

market failure and ideological entrepreneurship explanations of this sector is

avoided. (p. 613)

Both the observations of De Tocqueville and Mukerjee’s theoretical perspective on the

role of the nonprofit sector provide an ideological foundation for today’s nonprofit sector.

The size and scope of today’s nonprofit sector illustrates the importance of defining the

ideologies that drive the sector as it role in society appears to be growing and continually

more significant.

The Nonprofit Sector Today

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The nonprofit sector has a “…striking record of recent growth. Between 1977 and

1997 the revenues of America’s nonprofit organizations increased 144% after adjusting

for inflation” (Salamon, 2003, p. 50). This growth is more than twice the growth of the

nation’s economy during the same time period. Clearly as the need for the sector grew,

the nonprofit sector was able to expand and respond to increasing demand. Currently, the

nonprofit sector provides essential services in communities throughout the United States,

with over 1.8 million nonprofits being registered with Guidestar’s (2012) Nonprofit

Research and Analysis Solutions. Not only does the nonprofit sector provide essential

community support, the sector is also an integral component of the economy of the

United States of America.

According to the Urban Institute’s 2008 survey, 501(c)3 organizations generated

annual revenues of 1.44 trillion dollars, had expenses amounting to 1.34 trillion dollars,

and held assets amounting to 2.62 trillion dollars (Wing, Roeger, & Pollak, 2008). While

nonprofit organizations undeniably rely on outside funding sources to operate, the sector

as a whole is economically viable as evidenced by the sector’s assets and revenue

outweighing annual sector spending. Essentially, the nonprofit sector not only provides

essential services but does so in an effective and cost-efficient way. In the Bureau of

Economic Analysis’ (BEA) report, nonprofit organizations provide $779.1 billion worth

of services to households in the United States of America (U.S. Bureau of Economic

Analysis Report, 2010). Additionally, “The nonprofit sector has an annual GDP greater

than that of all but six nations” (O’Neill, 2003, p. 33). The nonprofit sector annually

accounts for 9% of all wages and salaries paid in the United States (U.S. Bureau of

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Economic Analysis Report, 2010). Not only does the nonprofit sector contribute to the

workforce within the United States, but is essential for other countries as well (Salamon

& Anheiner, 1996). The nonprofit sector contributes invaluable services, generates

revenue, and employs individuals. The relevance of the ideologies that drive the sector is

infinite in scale and scope. This study reviews actions of the sector during the Great

Recession to determine the changes within the sector, and actions taken by nonprofit

organizations that will either support the ideologies of the nonprofit sector defined in

history, or indicate ideologies are shifting.

METHODS

The study was designed utilizing an online survey instrument administered in

these seven cities spanning the United States during the fall of 2009, 2010 and 2011,

although every city was not included every year: (a) Cedar Falls, Iowa; (b) Dallas, Texas;

(c) Los Angeles, California; (d) Orlando, Florida; (e) Hattiesburg, Mississippi (f)

Youngstown, Ohio; and (g) Kansas City, Kansas. Youngstown was only included in

2009. Also, in 2009 Kansas City was not included and in 2010 Los Angeles was not

included. Each city represents not only that city, but also organizations from the

surrounding area.

The cities listed above were chosen because a Nonprofit Leadership Alliance

collegiate program was located within each city. The Nonprofit Leadership Alliance is a

national organization that partners with both college and universities, as well as nonprofit

organizations, to develop students for careers in the nonprofit sector. “Through campus-

based academic programs, the Alliance offers the National Certification in Nonprofit

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Management and Leadership and the corresponding Certified Nonprofit Professional

(CNP) credential” (Nonprofit Leadership Alliance, 2012, para. 3). The faculty member

from each university in the respective cities contacted the executive director of their local

United Way organizations with the exception of Orlando, Florida. All faculty, except in

Orlando, asked their local United Way director to distribute the survey, designed in

Survey Monkey, to their local funded organizations. The executive director in the cities

listed above then sent an email to their funded agencies asking them to participate in this

study. In Orlando, Florida the researcher sent out the survey through her own nonprofit

listserve. In 2009 the survey was sent to 803 nonprofit organizations, in 2010 it was sent

to 580 nonprofit organizations and in 2011 it was sent to 438 nonprofit organizations.

The sampling techniques for obtaining the organizations’ results were convenience

sampling.

The researchers compiled data collected in 2009, 2010 and 2011 into one SPSS

16.0 document. Once the data was combined the researchers ran frequencies to analyze

the data. Frequencies were utilized to screen data for extreme or incorrect scores as well

as to determine general themes in descriptive statistics (Baumgartner & Hensley, 2006).

The general themes were reviewed to determine patterns over time. The themes were

analyzed to determine nonprofit ideologies.

FINDINGS

The overall response rate for all three years combined was 25%. Every respondent

each year did not answer every question; therefore the N reflected in the reported tables

of this study represent the number of respondents for that particular question. The percent

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reflects the percent of the total number of respondents for each question by year.

Nonprofit organizations from seven different cities and surrounding areas were invited to

participate, however the majority of respondents were from Dallas and Kansas City.

Combing all three years about 28% of the responding organizations were from Dallas and

27% were from Kansas City. Nonprofit organizations from Orlando and Cedar Falls, IA

each represented about 13% of the respondents, and the remaining areas each represented

less than 10% of the results. Respondents were asked to categorize the mission focus of

their organization. Respondents were able to choose more than one mission; therefore the

totals did not equal 100%. In 2009, 2010, and 2011 more than 50% of participating

nonprofit organizations had missions related to health and human services. Youth

development organizations, mental health/crisis intervention organizations, and

educational organizations represented about 20% of responding organizations each year.

Other missions identified such as food banks, religious and sports each represented 10%

or less of the responding organizations.

The percent of responding nonprofit organizations to the questions, “has the

demand for services changed during the past year”, and if yes, “has your organization

been able to meet the change in demand”? In 2009, 67% of the responding organizations

indicated that demand for services increased and of those that reported an increase in

demand for services, 56% were able to meet the increased demand. By 2011, 84%

reported an increase in demand for services and those able to meet that demand dropped

to 49%. In summary, the number of organizations reporting an increase in demand for

services continued to increase, while the number of organizations responding ‘yes’ in

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ability to meet the increased demand, decreased every year. Overall, about 50% of

nonprofit organizations were responding positively to needs.

Table 1 illustrates how financial sources were impacted by the Great Recession.

The respondents were asked to indicate the rate of change on the organization’s financial

status in the areas outlined in Table 1. Respondents indicated in each area either a

significant increase, an increase, about the same, a decrease, a significant decrease, didn’t

know, or it wasn’t applicable. Table 1 illustrates the responses to the question combining

the two categories significant increase and increase and combing decrease and significant

decrease. The number of those that responded to each category varied. The percent

illustrated in Table 1 is the percent of the total that responded to that particular category.

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Table 1.

Percent of Respondents Indicating Change in Financial Sources.

Funding Sources

2009 2010 2011

Individual Contributions Increase 11.5 17.1 25.4

Same 23.1 23.7 28

Decrease 60 54 45.7

Fees for Service Increase 12.7 37.4 15.6

Same 31.4 25.9 31.2

Decrease 27.1 8.9 22

Membership Fees Increase 14.5 1 4

Same 10.9 13.9 19.8

Decrease 6.3 8 11.9

Foundations Increase 10.8 12.1 18.8

Same 26.4 27 33.3

Decrease 54.3 54.8 47

Corporate Giving Increase 31.5 32.1 13.6

Same 32.2 35.8 30

Decrease 19.9 17 49.1

Government Grants Increase 18.5 19.1 11.6

Same 36.3 25.2 23.2

Decrease 29.9 45.2 56.2

Commerical Activity Increase 2.5 11.2 10.1

Same 19 21.5 26.3

Decrease 21.6 15.9 17.1

Investment income Increase 14 21.6 1.9

Same 28.1 33.3 23.8

Decrease 33.9 22.5 49.5

* 2009 N=110-130, 2010 N=101-118, 2011 N=99-118.

In 2009 the largest percent of respondents indicated a decrease in individual

contributions, the largest decrease of all financial sources for that year. Support from

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foundations was also decreasing in 2009 and 2010 for over half of the respondents.

Organizations reported additional decreases in 2010 as compared to 2009 in support from

government grants as well. By 2011 support from corporate giving had decreased

drastically, in addition more nonprofit organizations reported decreases in government

grant support and investment income compared to 2010. By 2011, over 40% of the

organizations experienced a decrease in individual contributions, support from

foundations, corporate giving, government grants and investment income. While over

40% indicated decreases in various areas in 2011, individual contributions were

increasing over time, while the others appear to showing a pattern of decreasing since

2009.

The decreases in funding sources are impacting the operations of nonprofit

organizations; therefore it is important to understand the actions nonprofit organizations

engaged in during their financial struggles. Table 2 outlines the type of actions taken by

the responding organizations as a result of the Great Recession. Respondents indicated by

activity if any action was being considered, had already been taken, or if there has been

no action related to that particular activity. These figures are broken down into actions

related to personnel, benefits, and service delivery.

Table 2 illustrates the percent of responding organizations taking action or

considering doing so on actions related to personnel. By 2011, 30% or fewer nonprofit

organizations were laying off staff, cutting salary and wages, implementing hiring freezes

or reducing staff hours. The only personnel action being taken consistently over time was

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implementing salary freezes. This finding reflects a commitment to staff as most

nonprofit organizations were not making drastic cuts in personnel.

Table 2.

Percent of Respondents Indicating Actions Taken or Considered Related to Personnel,

Service Delivery and Benefits.

Personnel Actions

2009 2010 2011

Lay Offs Action Taken 25.7 36.8 30.3

Considering Action 14 12 11.5

Salary/Wage Cuts Action Taken 17 18.8 13.8

Considering Action 14.1 12 9.8

Hiring Freeze Action Taken 41.9 32.5 30.9

Considering Action 12.5 12.5 8.1

Reduced Hours Action Taken 20.7 19.7 19.8

Considering Action 14.8 9.4 10.7

Salary Freeze Action Taken 48.1 50.4 51.6

Considering Action 18.5 11.8 13.1

Service Delivery Actions

2009 2010 2011

Reduce Service Delivery Action Taken 21.3 20.8 24.6

Considering Action 11 11.7 9

Reduce Programming Action Taken 19.7 25.2 28.7

Considering Action 23.4 16 15.6

Reduce Hours of Operation Action Taken 10.4 11.2 9.2

Considering Action 13.4 5.2 5.8

Actions Related to Benefits

2009 2010 2011

Decrease Retirement Action Taken 9.6 21.7 19

Considering Action 12.5 4.2 5.8

Increase Health Premiums Action Taken 11 33.3 26.2

Considering Action 11 15 19.7

Decrease Benefits Action Taken 13.3 22.3 24.4

Considering Action 21.5 16.5 10.6

Reduce Staff Training Action Taken 44.9 46.2 39.8

Considering Action 19.1 12.6 10.6

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* 2009 N=134-137, 2010 N=116-121. 2011 N=120-123.

Table 2 also illustrates the responses to three areas of service delivery. All service

delivery actions are reported by fewer than 30% of responding organization all three

years. Specifically, in 2011 almost 25% of responding organizations reported reducing

service delivery, up only slightly from 2009 and 2010. There was an increase every year

in the percent of organizations reporting reducing programming from about 20% to about

25% to almost 30% in 2011. The percent of organizations reducing hours of operation

was about 10% all three years. This finding highlights the struggle nonprofit

organizations experienced; however it also supports the sector’s commitment of being

mission driven, as most organizations did not reduce their delivery of services.

Finally Table 2 illustrates the percent of nonprofit organizations taking or

considering action as they relate to benefits. Throughout all three years fewer than 50%

of responding organizations reported taking any of the actions related to benefits,

however all four actions increased in the percent of nonprofit organizations taking that

particular action from 2009 to 2010. The action with the largest increase reported was

increasing health insurance premiums from approximately 11% of organizations in 2009

to about 33% of the organizations in 2010. By 2011, about 25% or fewer nonprofit

organizations reported decreasing retirement, increasing health premiums or decreasing

benefits. In addition 45% of the organizations in 2009 and slightly more in 2010 reported

reducing staff training, however this dropped to 40% reporting this action by 2011.

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Other actions (not illustrated in the Table) that were difficult to categorize as

personnel, service delivery or benefits reported as being taken by 40% or more of

responding organizations all three years included reducing non-service expenses and

reducing travel. By 2011 two other actions reported by about 30% of responding

organization included cutting association memberships and changing service providers

for services like internet connectivity and telephone. Very few responding organizations

reported reducing volunteer training. When analyzing all eighteen actions, it is evident

that the nonprofit sector is people oriented, both in serving their clients and their staff and

volunteers.

SIGNIFICANT FINDINGS AND THE IDENTIFICAITON OF

NONPROFIT IDEOLOGIES

There are three ideologies identified in this study and supported by the literature.

First, the nonprofit sector is mission driven. Second, the nonprofit sector responds to

perceived needs. And finally, the nonprofit sector is people oriented, both in the clients

they serve and to staff and volunteers who serve those in need. Not only are these three

ideologies evident in the findings of the actions of nonprofit organizations over the past

three years, these ideologies are evident in early observations of American society and by

economic theories from the early 1900s. Prior to discussing each ideology, it should be

noted that while the operations of nonprofit organizations are being challenged and

business-like functions are being highly encouraged, it is our belief that these three

ideologies constitute a comprehensive vision and brings conformity to the nonprofit

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sector regardless of political perspective or whether the sector would be better served if

operated more like the for-profit sector.

There are seven key findings of the research that has been conducted over the past

three years. The key findings include: 1) Demand for services increased every year, while

the ability to meet the increase in demand has decreased every year; 2) From 2009 to

2011, corporate donations, government grants and investment income showed significant

decreases in each funding source, while the percent of organizations reporting an increase

in individual contributions almost doubled from 2009 to 2011; 3) Support from

government grants has decreased fairly drastically as almost twice as many report a

decrease in government funding in 2011 than in 2009; 4) In 2009 the largest percentage

of organizations reported instituting hiring freezes (41.9%), however every year

following fewer organizations reported taking this action; 5) Every year there was an

increase in the percent of organizations that reported taking action to implement salary

freezes reaching about 50% by 2011; 6) 2011 brought increases in the number of

organizations reporting actions taken in reducing service delivery as well as reducing

programming, however both are reported by less than 30% of responding organizations;

and 7) In 2009, 13.3% of organizations reported decreasing benefits, increasing in 2011

to 24.4%. By 2011 all actions related to benefits were reported by less than 40% of

responding organizations. Each of these key findings support the three ideologies

outlined earlier.

The first ideology of the nonprofit sector is unique only to the nonprofit sector

and rarely associated with the for-profit sector or the government. The nonprofit sector is

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mission driven. In the study conducted for the past three years, nonprofit organizations

had to identify their overall mission, and missions are developed by a set of ideologies of

a common group of people, who associate with one another around a common goal as

described by De Tocqueville. It is impossible to discuss the ideologies of the nonprofit

sector, without first pointing out that the sector was born and continues to be a vital part

of society because of its mission driven purpose. As Mukerjee (1921) pointed out, it is

the coming together of groups voluntarily that provide the services needed and that can’t

be provided by the individualistic market sector or the centralized government sector.

While the ability to meet the increasing demand in services decreased every year,

it is important to note that by 2011 50% of nonprofit organizations reported being able to

meet the increase in demand. Despite financial challenges and having to make tough

decisions, nonprofit organizations appear committed to their mission. One interesting

point to make is that while corporate giving and support to the sector from government

grants have continued to decrease over the past three years, donations from individuals

have increased in both 2010 and 2011. While analyzing why individuals are giving is

beyond the scope of this study; it is likely that individuals are giving to nonprofit

organizations that have missions that align with their ideologies. Finally, the fact that the

percent of nonprofit organizations that reduced their service delivery was less than 30%

indicates a commitment to their mission.

Next, the nonprofit sector is constantly responding to an ever-increasing need.

This is evidenced not only the in the growth of the sector in recent years (Salamon, 2003)

but also in the results of this study. The percent of nonprofit organizations that report an

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increase in demand for services rose to almost 85% in 2011. This implies that

organizations are not only being called to continually provide services as in the past, but

every year there is more and more demand. Every year nonprofit organizations need to

serve more people and certainly during the challenging economic times this can be

extremely difficult, particularly since funding sources have been unstable over the last

three years. In 2009 and 2010 over 50% of nonprofit organizations reported being able to

meet the increase in demand for services. This dropped to just under 50% in 2011, but

this means that half of the nonprofit organizations, while reporting financial difficulty,

are serving more people every year.

There are also actions taken by nonprofit organizations that speak to the idea that

serving the increasing need is important. Table 2 illustrates that only 25% of nonprofit

organizations reduced their service delivery in 2011 and just under 30% reduced their

programming. While both percentages are up from 2010, this indicates that 70-75% of

nonprofit organizations are maintaining their services in challenging economic times.

While only about 25% are reducing their services in 2011, over 40% of nonprofit

organizations reported a decrease in multiple funding sources. Money is tight, but the

commitment to meeting demand is stable as shown in the results of this study.

In addition, both De Tocqueville (1863) and Mukerjee (1921, 1925, 1942) point

out the importance of the nonprofit sector in keeping society in equilibrium. As more

people were out of work, and government budgets decreased, the need in communities

across America increased. More assistance was needed during tough economic times, and

while the nonprofit sector was not immune to these same challenges, it was able, on a

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fairly significant level to provide the services to keep society as a whole in balance.

Mukerjee (1942) points out that the market is not capable of meeting broad social goals

and it is the nonprofit sector responsible for the rights of humans and care for the

disadvantaged.

The third ideology identified through the results of this study is the nonprofit

sector’s commitment to people. There is much overlap with this ideology and the

commitment of the sector to meeting the ever-increasing need, but there is also a

commitment to the staff and volunteers that are vital in the nonprofit sector. Reflecting

again on the financial impact to nonprofit organizations with over 40% reporting a

decrease in individual contributions, support from foundations, corporate giving,

government grants and investment income the percent of nonprofit organization taking

actions that affect staff does not appear to be as drastic. While we don’t know what is

going to happen on the 2012 report, in seems that in 2010 the percent of nonprofit

organizations reporting layoffs peeked at about 38%. Hiring freezes peeked in 2009 at

about 40% and both those reporting layoffs and hiring freezes now are at about 30% in

2011. Only about 12% of nonprofit organizations reported a salary or wage cut; however

those reporting salary freezes seems to be increasing every year with about 50% reporting

this action in 2011. While it is undeniable that staff are affected, the decrease in funding

does not seem to be affecting staff decisions as drastically as the numbers might imply.

Beyond analyzing personnel actions such as pay, actions related to benefits also

indicate a commitment to the staff. While 2009 and 2010 created challenges regarding

benefits to staff, 2011 suggests nonprofit organizations are taking less action to reduce

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benefits to staff regarding retirement, health premiums and training. Maybe an ideology

that highlights the importance of people is obvious when discussing the nonprofit sector,

but as Hasenfeld (2010) pointed out human service organizations need to emphasize their

explicit moral choices. He labels the sector the “invisible hand” but choice to invest in

staff to provide the actual services is concrete and should be outlined. The importance of

people, the holistic importance of people, those being served and those serving, is a

foundation of the sector and we would argue an ideology that is strong.

CONCLUSION, LIMITATIONS AND MORE TO THINK ABOUT

There is an undeniable set of ideologies upheld by the nonprofit sector that was

identified early in American history and noted by economists such as Mukerjee beginning

in 1921. The nonprofit sector is mission-driven and realizes its responsibility to equal out

society’s moral values when other institutional methods aren’t capable. During

challenging times, when tough decisions must be made, organizations define their ideals

in their actions. In the last three years most nonprofit organizations were able, despite less

funding, to meet increasing demands through continuing their services and programming

with little cut back on staff, salaries and benefits. Ideologically, nonprofit organizations

are mission-driven, respond to an ever-increasing demand for services and reflect the

importance of people in their operations. Yes, there is consideration that needs to be

given to the bottom line and the adoption of business-like operations, but for the sake of

the mission, not the bottom line. The adoption of what some call business-like practices,

while more evident, are not shifting or threatening nonprofit ideologies.

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Volume 34, 2012

This is the third study conducted, as part of a five-year longitudinal study, to

gather information on the economic climate in the nonprofit sector; however this study is

not without limitations. While the sample size of this study spans various regions of the

United States, the sample is relatively small and convenient rather than random because

the regions surveyed are regions where the researchers have connections to the local

nonprofit sector through the United Way or other nonprofit associations. Additionally,

the study relies on data compared over a span of three years; in order to compare survey

results accurately the researchers are relying on similar nonprofit organizations to

respond consecutively over the span of the study. Lastly, a majority of the organizations

invited to participate in the survey were organizations with relationships to United Way’s

across the country. This fact limits the survey participants to organizations that are

focused on human services, health or education as those are the types of organizations

with missions that United Way funds.

This list of ideologies is the beginning of an evolving set of ideas that contribute

to specifically defining an ideological foundation for the nonprofit sector. This list should

not be considered exhaustive, and it is encouraged that other researchers analyze the

nonprofit sector to continue to examine its purpose and need. While there are numerous

scholars that discuss nonprofit ideologies this area of research is still largely

understudied. Some scholars appear to be questioning the operations of nonprofit

organizations and in a sense rocking the ideological foundation on which the sector was

built. The challenging and changing times call for nonprofit organizations to be more

outcome-based and responsive to their stakeholders. Despite these changes there is

Journal of Ideology

Volume 34, 2012

evidence that even if operated more business-like, there is an ideology to the work of

nonprofit organizations that grounds the sector beyond operational practices.

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* Julianne Gassman, Ph.D. University of Northern Iowa

203 WRC

Cedar Falls, IA 50614-0241

gassman@uni.edu

319.273.2204 (phone)

319.273.5958 (fax)

Norman A. Dolch, Ph.D. University of North Texas

College of Public Affairs and Community Service

Denton, TX 76302-0919

norman.dolch@unt.edu

972-369-2395 (phone)

Ann M. Kinnell, Ph.D. University of Southern Mississippi

118 College Drive #5074

Hattiesburg, MS 39406-0001

ann.kinnell@usm.edu

601.266.5339 (phone)

Stephanie Krick, Ph. D. University of Central Florida

HPA II Suite 234

Orlando, FL 32816-1395

Stephanie.krick@ucf.edu

407.823.0661 (phone)

Regan H. Schaffer, Ph.D. Pepperdine University

24255 Pacific Coast Highway

Malibu, CA 90263

regan.schaffer@pepperdine.edu

310.506.7458

SueAnn Strom, Ph.D. Park University

8700 NW River Park Drive

Parkville, MO 64152

sueannstrom@gmail.com

816.729.9671