Change Management in Nonprofit Organizations

This introductory chapter provides a comprehensive overview of the concept of change in organizations. The chapter defines change as a process with emphasis on a systems perspective. It explains that to really know what change is and to develop the competencies for effective change management, one must understand the factors that are the core components of any organizational change: paradox, content, process, and context. The chapter examines the types of change and the drivers of change to explain why change is an imperative, how change evolves and manifests in organizations.

Change pervades the environment of nonprofit organizations. It is a reality that nonprofit organizations cannot afford to ignore. The reality of change means that nonprofit organizations must understand change in the external environment and position the organization to effectively adapt in a timely manner. This chapter examines the nature and drivers of change in nonprofit organizations. It offers a comprehensive insight into why change in nonprofit organizations is unique and the contextual factors that shape the dynamics of change in the sector. Also, it highlights the specific characteristics of change and the strategies that nonprofit organizations implement to manage change. Throughout the chapter, the challenges that underlie change and play an important role in the ability of the organization to adapt such as lack of resources and dependence on government are discussed. Together, the elements of change discussed in this chapter emphasize the need for change processes and tools to consider and incorporate the factors that define the unique context of nonprofit organizations.

This chapter discusses how nonprofit organizations can plan and implement change. The focus is on the process that an organization can use to facilitate change. How can change implementers and change initiators work together as change agents to make change happen for the organization? To explain the process of actualizing change, the chapter offers a model that nonprofit organizations can use to make change happen. Since nonprofit organizations are unique in terms of their characteristics and processes, the model draws on relevant perspectives in organizational and nonprofit management theories to explain how to implement change in a nonprofit organization. First, the chapter briefly reviews two leading change management models and a comparison of change models.

Effective people management is critical to the success of any organizational change effort. This chapter focuses on how to effectively manage people before, during, and after organizational change in ways that enable successful change outcomes and enhance nonprofit organizational capabilities and performance. We begin with a high-level discussion of the roles people play in successful organizational change, and how to prepare employees for change. Then we consider individual and organizational characteristics that can influence the way employees experience change. These factors include employee attitudes, emotions, personality, motivation, training and development, performance management, and compensation and rewards. Finally, we discuss the importance of creating the conditions needed for successful change management, specifically exploring the role of leadership, organizational culture, and power in effective change management.

Volunteers are the backbone of the third sector and provide a tremendous resource for nonprofit organizations; thus, it is critical to understand how organizational change might impact their service and contributions. This chapter considers the uniqueness of volunteers in two parts. Part one discusses volunteer motivation and performance management, and retention. In order to successfully usher volunteers to, through, and beyond change management efforts, nonprofit leaders must clearly understand why volunteers choose to volunteer in the first place, what keeps them volunteering, and how to maximize the value of their service. Part two widens the scope to focus on volunteer management from the perspective of the volunteer administrator and as part of a larger organizational ecosystem. In this second part, we introduce strategic volunteer resource management (strategic VRM) and discuss it as an approach to maintaining high volunteer engagement and maximizing volunteer management impact during change management.

The core roles of the board of directors suggest that a discussion of change in nonprofit organizations is incomplete without an explanation of the influence, role, and impact of the board of directors in nonprofit change. This chapter provides a brief overview of the types of nonprofit board of directors followed by an overview of the challenges and opportunities that are related to change in the sector. The chapter also explores the responsibilities of the board of directors in change. This will include how the board can help to guide the vision for change in the organization. The board of directors has a pivotal role in the change process in nonprofit organization. From the first step of determining the need for change to the final phase of institutionalizing the change, the governance and strategic leadership roles of the board are critical to help the nonprofit organization to adapt and manage change. The chapter provides an overview of the roles of the board of directors in relation to change. The examples of the challenges and opportunities of change for the board emphasize that change can affect not only the role of the board, but also the characteristics and the competencies they use in governance and strategic leadership. Moreover, the examples of change challenges and opportunities reinforce the need for the board of directors to understand the relationship between the environment and the organization as the basis of their governance and strategic leadership roles.

The characteristics, pace and the varied drivers of change point to the need for nonprofit organizations to explore and at least consider different nonprofit specific change strategies. One of the leading examples of nonprofit specific change strategy is the adoption of social enterprise to help the organization to adapt to change in the external environment. The chapter examines the concept of social enterprise in relation to change in nonprofit organizations. It explains the dimensions of the explanation of what is social enterprise by highlighting the definitions and examples of social enterprise in the USA, Canada, and the UK. The major influences that contribute to the development of social enterprise emphasize the role of change. Similar to many of the factors and practices in nonprofit organizations, the external environment is a major driver for the adoption of social enterprise. As a concept and practice, social enterprise in nonprofit organizations is the convergence of entrepreneurship and self-sufficiency that are based on individualism and social movement which is the hallmark of collective action. Although it offers a source of tremendous opportunities, social enterprise as change strategy could portend significant challenges that counteract its benefits. Thus, nonprofit organizations must find ways to mitigate the challenges of social enterprise in order to deploy it as an effective change strategy.

This chapter assesses the tools and strategies used to evaluate the need for change in NPOs. It briefly outlines the organizational development approach to diagnosing change and presents a model for addressing the technical, political and cultural dynamics of the organization. Drawing on work on change management from an organizational studies perspective, it thereafter considers how NPOs can specify the change challenge, use stakeholder mapping and diagnose the cultural aspects of change. Baluch also highlights research from the nonprofit field that provides examples of change analysis tools and processes, alongside key empirical findings. The chapter concludes with a discussion of the main implications for diagnosing change in NPOs.

This chapter provides an overview of the strategic importance, key activities, and tools used to implement change in NPOs. Baluch draws on a wide body of research on organizational change in the nonprofit field to identify the unique nonprofit characteristics in implementing change and examine the facilitating role of learning, leadership, and organizational culture, and HRM during change. The chapter also addresses resistance to change and why change implementation fails in NPOs. Baluch further analyzes the dynamics of change, a range of strategic responses to the external funding environment and change strategies for different stages of a nonprofit’s development. These insights are drawn from a comprehensive research on organizational change in NPOs from 1998 to 2018, using the Web of Science database. The chapter concludes with a discussion of the key findings and draws implications for nonprofit managers and employees when implementing change.

A nonprofit that undertakes the task of change is making a serious commitment to its improvement, development, and perhaps even longevity and survival. For this reason, it is prudent for organization leaders to methodically assess the efficacy of change efforts and determine the extent to which they have enabled the achievement of organizational goals. This process—evaluation—asks whether a change effort worked the way it was intended to work, and whether it had the intended effect. It also asks how and why things turned out the way they did. In this chapter, we begin with a brief coverage of the history and evolution of evaluation, the purposes of evaluation, who does evaluation, and the various kinds of evaluation that can be conducted. Then we present some common as well as contemporary evaluation approaches, models, and taxonomies, including the familiar and classic Kirkpatrick Four-Level Evaluation Model. Finally, we discuss the nuts and bolts of conducting high-quality evaluation, including designing evaluation, collecting evaluation data, analyzing evaluation data, communicating evaluation results to relevant stakeholders, and evaluating the evaluation process.

The core decision for A-Way is whether to focus on its current strategy by continuing to achieve benefits for the 50–70 staff who are employed by the social purpose enterprise or refocus the strategy and leverage its resources to attain goals that will help more people to transition to different mainstream employment or implement a blended strategy that will incorporate elements of both strategic options.