Fluent Essays

Instructions The purpose of this week’s assignment is to help you think further about your dissertation. Consider the themes in the readings over the past three weeks (as these all relate to management, organization, and governance in various public organizations, including nonprofits) that may relate, in some way, to the themes you think you may like to examine in your dissertation. Select at least four readings from the past 3 weeks. Identify and analyze key factors (that you gleaned from these readings) that relate to your dissertation topic. Create a personal memo to discuss how these concepts may relate to your dissertation research. Do this by writing a memo to yourself, brainstorming about the connections between these concepts and your dissertation topic. In the introduction, clearly write out what the topic is that you are considering for your dissertation, then discuss the ways in which the readings relate. If you find the readings do not directly relate, consider the wider themes and broader subjects in which your topic is related. This assignment will serve as a way for you to begin thinking about issues of management and organization more deeply now, and it can remind you in the future about how these concepts may be integrated into your dissertation. You do not need to address the memo to yourself. At the top write: “Personal memo relating management and organizational behavior to my dissertation.” Length:  2-3 pages References: Include a minimum of four scholarly resources. Your assignment should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral Universitys Academic Integrity Policy. Box, R. C., Marshall, G. S., Reed, B. J., & Reed, C. M. (2001). New public management and substantive democracy. Public Administration Review, 61(5) Boardsource. (2010). The handbook of nonprofit governance. San Francisco, CA: Jossey-Bass. Boardsource. (2010). The handbook of nonprofit governance. San Francisco: Jossey-Bass. Chapter 5: The board-chief executive relationship Tschirhart, M., & Bielefeld, W. (2012). Managing nonprofit organizations. San Francisco, CA: Jossey-Bass. Sandfort, J., & Moulton, S. (2015). Effective implementation in practice: Integrating public policy and management. San Francisco, CA: Jossey-Bass. Trim Size: 7in x 9.25in Sandfort p01.tex V2 - 12/16/2014 7:11am Page 1 P A R T O N E The Implementation Landscape Reformers are institutional gardeners more than architects and engineers. They reinterpret codes of behavior, impact causal and normative beliefs, foster civic and democratic identities and engagement, develop organized capabilities, and improve adaptability.1 The great thing about [gardening] is the way something new is always happening . . . Each year there are new varieties to discover in the annual crop of seed catalogs, new trends to dabble with and new planting schemes to explore. And apart from the dazzling variety of the plants themselves, there are the imponderables of pests, problems and weather that combine to make each season a new gardening adventure. But some things never change—the basic skills of sowing, planting, and cultivation.2 1 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort p01.tex V2 - 12/16/2014 7:11am Page 2 In part 1, we describe the landscape of our approach to policy and programimplementation. While we integrate prior approaches to understanding imple- mentation in public contexts, we devote attention to describing an alternative way to view implementation, suggesting criteria for assessing effectiveness, and explaining why things happen the way they do. Chapter 1 presents our definition of effective implementation and key elements in our approach. It is worth noting that this approach is purposefully pragmatic, grounded in academic thinking, but also drawing considerably from experience and reflection. And it is context dependent. Effective implementation cannot be reduced to a generic set of skills that can be applied universally across all settings. Policy-specific expertise is essential, and we introduce case examples that we follow throughout the book to elucidate the dynamics of implementation analysis in specific settings. Chapter 2 situates our approach within the context of three other traditions of scholarship and practice: political processes and authority, governance and man- agement, and policy and program evaluations. One of our motivations for writing this book is the cognitive dissonance we often feel when engaging scholarship in any one of these areas. On one hand, each directly speaks to the implementation system and its challenges. But on the other hand, each informs only one piece of the implementation puzzle—political and power dynamics, the governance sys- tem, or interventions targeting behavioral change. In our work as practitioners and now scholars, we navigate across these artificial boundaries, borrowing from each the relevant aspects for implementation. We think that this is an important con- tribution for future students and practitioners and therefore share these insights in chapter 2. Finally, in chapter 3, we apply the concept of strategic action fields to the imple- mentation system as a way to suggest a systematic way to explain what happens in implementation systems. By doing this, we emphasize that these systems are complex, not merely complicated. They cannot be neatly reduced to a set of fac- tors or variables that predict success, but rather must be viewed as dynamic, living social systems. Each level in the implementation system is a strategic action field with a unique social structure and dynamics that shape the core program. The core program is what distinguishes implementation from other change initiatives—it involves establishing viable options, using a logic of change, and selecting a means 2 Effective Implementation in Practice Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort p01.tex V2 - 12/16/2014 7:11am Page 3 for activity coordination. This is a new way of thinking about the implementation system. And like any other new idea, it may take some time to digest the concepts. We continue to weave the concepts presented in this chapter throughout the rest of the book. By its end, we believe this new way of thinking can become second nature and improve your own endeavors as implementation practitioners. Part One: The Implementation Landscape 3 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort p01.tex V2 - 12/16/2014 7:11am Page 4 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 5 c h a p t e r O N EFraming Implementation By April 2014, Sandra Martinez, manager at Connect with Health Colorado,could finally stop to breathe and reflect on the events of the previous year.1 The federal Affordable Care Act (ACA) was a major change in public policy (see box 1.1), and her organization, a nonprofit formed by the legislature to implement the state’s health care insurance marketplace, was at the center stage of Colorado’s efforts to get the first wave of citizens enrolled. While in late 2013 public and national media attention reached fever pitch when operational challenges threat- ened the federal insurance website marketplace, Colorado was not caught in that controversy. Because it was one of the seventeen states that elected to operate its own insurance exchange, she and other leaders in the state’s public, nonprofit, and private health organizations focused their attention on other important imple- mentation activities. There had been some delays in the state-run enrollment pro- cess, largely because of the state’s effort to sign up as many people as eligible into Medicaid to reduce citizens’ expenses. Yet a sizable number had completed an application, some drawing on the support of navigators contracted to provide indi- vidual support in making insurance selections. Box 1.1 Overview of National Health Care Reform Lauded by some as the most significant social welfare law passed in the United States for half a century, the signing of the Patient Protection and Affordable Care Act by President Obama in March 2010 set into motion a complex series of events. Termed “Obamacare” by political adversaries, the law’s goals focused (continued) 5 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 6 (Continued) on increasing the quality and affordability of health insurance, decreasing the number of uninsured Americans, and reducing health care costs. Implementa- tion of some features began immediately, but political controversy and legal challenges created initial uncertainty for states as they considered how to craft their own health care policy in relation to federal action. When the Supreme Court ruled the act constitutional in June 2012, states began deciding which of the many options offered in the act they would pursue. For example, states had the option of expanding the Medicaid program to provide more afford- able insurance for low-income people, creating health care marketplaces or exchanges to help individuals and small employers purchase private insurance, or making changes to existing state-based health programs. Other states chose to let the federal default options take effect. Like other states, Colorado had established the Connect with Health exchange as a quasi-governmental agency, governed by a legislatively appointed board representing a range of stakeholders to oversee the program’s direction and ensure public accountability. They had convened working groups to establish the plans and strategies of implementation focused on health care plans, disadvantaged communities, small businesses, and consumer services. Other groups in the state raised funds from private sources to investigate models for consumer support and public education. Martinez, along with some members from these work groups, participated in a number of national events and networks funded by private foundations that brought together state leaders to share the strategies being used to resolve implementation challenges. She found these efforts invaluable; they provided a neutral learning place and valuable information that helped improve decision making. The need for health care reform in Colorado was high. Compared to other states, a large number of uninsured children and adults either had no health care or paid high out-of-pocket expenses.2 In 2011, the governor had signed into law the state’s policy authorizing Medicaid expansion3 and the development of the insurance exchange. As in other states, eligibility for support was tied to income eligibility: the lowest-income citizens accessed health insurance through expansions in Medicaid, another group was eligible for tax credits to decrease out-of-pocket costs, and others could now access insurance through an unsubsidized marketplace benefiting from group-negotiated insurance terms. But 6 Effective Implementation in Practice Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 7 in May 2013, following the lead of the Colorado Health Foundation, the governor also declared a goal of making the state the healthiest in the nation, raising the urgency and political salience of the issue in the state. Over the previous year, there had been an unprecedented number of public-private initiatives focused on the governor’s goals of promoting prevention and wellness, improving service coordination, and making operational changes in payment and information technology. And while sometimes tensions had erupted between state leaders about the pace and consequence of the changes, the network between major organizations had held together. The Colorado Department of Health Care Policy and Financing played an important role in the state as the agency that authorized many of the public programs. The department’s managers, such as Maurice Brown, entered into the contracts with the ten insurance plans advertising on the Connect with Health Colorado website. Accountable to the federal Department of Health and Human Services, ACA activities were significantly influenced by the department’s years of experience administering Medicaid, Medicare, and the Children’s Health Insurance Program. The new policy also fit solidly into the organization’s new articulated mission of improving health care access and outcomes for citizens while demonstrating sound stewardship of financial resources. Managers had developed six organizational goals, including strategies to improve services and align communication, technology, and staffing. The overarching intent was to transform the health care system from a traditional fee-for-service model into a regional outcomes-focused coordinated system of care. The ACA programs were included in this larger structure promoted by the department, although compared with his peers, Maurice was more extensively involved with external groups such as Connect with Health, the Colorado Health Foundation, and other implementation working groups because of the policy’s visibility. While the policy had an impact on many organizations that interacted with citizens—health insurance companies and co-ops, health providers that now pro- cessed bills for fewer uninsured people, mental health practices that now faced economic pressure to join larger groups to ease billing—the agencies providing outreach to disadvantaged groups were particularly important in the first few years because of the law’s goal to enroll the uninsured. Informed by research conducted by a coalition of consumer advocates, the state contracted with public health and community-based agencies to provide exchange navigation, education, and sup- port about the various insurance options. In original discussions, some exchange Framing Implementation 7 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 8 planners had believed it would operate like the travel website Travelocity, which allows easy comparison among various options. Yet the unveiling of Connect with Health Colorado revealed that enrolling in health care insurance is much more complex than booking an airline flight. At one time there were over sixty-five policies to choose among, and managers like Noah Manning soon discovered that enrollment assistance took considerably more time than what his organization had originally budgeted. The face-to-face work fell to the cadre of navigators and health advocates who provided enrollment counseling. Yet at the front lines, the dynamics were complex. On the one hand, while navigators such as Cynthia Wang provided information for free to low-income citizens, other certified health advocates received commissions for their services. And consumers’ needs were complex, often requiring individ- ualized assistance. Cynthia had to remind some people to save documentation of expenses to qualify for tax credits at the end of the year. For others, after they had received their insurance cards, she coached them on how to find and use the health care, which many had been putting off for years. Outside of the metropolitan areas, this task was even more challenging because of the limited numbers of clinics and hospitals in many communities. As Cynthia sat with people, she heard each story in turn—the recently laid-off construction worker who couldn’t afford the insur- ance fees, the elderly retail worker whose employer had joined the exchange but offered inadequate coverage for his needs, the disabled veteran who had a difficult time driving the long distances to get her regular checkups. From each of their positions, Sandra, Maurice, Noah, and Cynthia face cer- tain issues that must be resolved in the process of implementing the ACA. While resolving ideological debates among large institutions might seem quite different from responding to customers’ confusion, these issues are interconnected. One level directly influences the implementation tasks and results at another; the Con- nect with Health Colorado working groups create the plans and online forms that the frontline navigators like Cynthia must fill out. The lessons Noah learned about work flow in outreach agencies are relevant to objectives articulated by the Department of Health Care Policy and Financing. The first policy implementation scholars described this reality as the “complexity of joint action” and, because of it, subtitled their book “why it is amazing that federal programs work at all.”4 In this book focusing on policy and program implementation, we are more optimistic. We believe the more that people like Sandra, Maurice, Noah, and Cynthia recognize their interdependence and have ways for talking about 8 Effective Implementation in Practice Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 9 and analyzing the complex implementation system they are part of, the more likely that policy and program implementation can help deliver desired results. However, this vision depends on implementers recognizing their essential roles in these systems. It requires professionals who will work hard to cultivate the analytical and social skills necessary to understand and intervene in complex systems. It requires courage to acknowledge ambiguity and still take action, particularly seizing opportunities to work across the multiple levels of the system. In our understanding, implementation is a form of policy practice, distinct from yet influenced by policy debate. It is centrally important to democratic gover- nance. And in its complexity, it can be both fascinating and challenging—solving one problem can reveal another layer needing to be addressed. In this book, we invite you to engage in the endeavor of studying implementation. Be curious about implementation dynamics, develop new conceptual language, and cultivate skills that will help you resolve the implementation quandaries you encounter. Through- out, keep in mind that while your actions are merely one part of the larger system’s dynamics, sometimes small interventions can improve whole system operation. Opportunities present themselves, often in unexpected ways, to better align an implementation system toward improving public value results. EXPLORING POLICY AND PROGRAM IMPLEMENTATION Implementation issues appear in less-dramatic gestures than the passage of major health care reform. In fact, when any new program or idea for an initiative is shared, practical questions about implementation often follow right behind. How do we take these mandates and make them real in our state? How do we pull together the right people to respond to the large foundation’s request for proposal? When a grant proposal is funded, how do we empower the program managers to develop procedures and training for staff? While we both recognize the urgency of these questions, we also believe that it is important to understand each question in its larger, systemic context. The first step in developing this ability is to internalize helpful lessons from social science that provide new ideas and consistent language for your analysis. By definition, policy and program implementation is complex. The issues that make their way into the public arena are significant, the solutions illusive. Energy conservation, affordable and adequate housing, educational effectiveness—all are desirable goals that require changes in personal, market, and organizational Framing Implementation 9 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 10 behavior to attain. Very few policies or programs designed to achieve such goals are self-implementing. And yet the means, the how of developing these solutions, is often quite illusive. Merely acting from organizational or professional interests does little to create integrative solutions that foster collective action across boundaries to advance the common good. This process is made more challenging because, as in Colorado’s ACA example, much of policy and program implementation devolves from the central government. Around the world, traditional public bureaucracies directly provide fewer services than they used to, depending instead on private organizations under contracts, grants, or subsidies to deliver public services. The diversity of organizations and varied government tools in use raises the substantive importance of improving implementation, but it is not easy. Public sector managers, accustomed to focusing their attention on how best to navigate bureaucratic structures and legislative oversight, must acknowledge how much of policy implementation falls outside the direct control of publicly employed staff. They must cultivate skills of network management, such as facilitation and negotiation, to work effectively in implementation systems. Private business and nonprofit managers, accustomed to acting on narrow conceptions of their organizational bottom line or interests, must recognize the significance of their involvement in public service provision. They must recognize the legitimacy of public accountability and yield some autonomy to be part of larger solutions to public problems. Both must reorient themselves away from organizational interests toward attention to the policy or program target population, to under- standing their behaviors, motivations, and concerns. Teachers, police officers, unemployment insurance clerks and doctors must recognize how their daily decisions—decisions to go beyond the formal requirements of their job in responding to students, citizens, and needy patients—often become the face of public policy. It is common for public managers, private and nonprofit leaders, and direct service professionals to complain that target groups often do not follow policy or program requirements; they often fail to act in ways that designers intend. This disconnect between systems operation and target group behaviors is a fundamen- tal challenge in most implementation projects. Yet seeking to understand the way such behavior is indeed logical by attending to the actual motivations and real- ities of these target groups is often essential for orienting what implementation improvements should address. 10 Effective Implementation in Practice Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 11 Compared to previous political science and public affairs scholarship, our notion of policy and program implementation grows more directly from sociology and organizational theories. As we discuss in chapter 2, many other scholars anchor implementation on policy intent or the characteristics of a par- ticular legislative statute.5 In this conception, policy implementation is focused on trying to bring the ideas of formal policy into reality. Policy implementation is viewed as the activities carried out by various institutions and implementers in pursuit of adherence to formal public policy and laws. As proponents of a government-centered, top-down approach to implementation, Dan Mazmanian and Paul Sabatier state, “Implementation is the carrying out of a basic policy decision, usually incorporated in a statute but which can also take the form of important executive orders or court decisions.”6 From this understanding, program implementation follows linearly from policy implementation. Imple- menters, county or regional governments or local service organizations, try to interpret and integrate policy directions into their ongoing operations through specific programs; they are a necessary component of policy implementation, operating at a smaller, more localized scale. But this linear relationship does not hold. Many times national policy is created after the documented impact from programmatic innovation at state or local levels. Kindergarten, electrical smart grid, HIV/AIDS services, and countless other examples evolved in this way. These programmatic ideas can be described, evaluated, assessed by others, and adopted by other states before national legislation is forthcoming. As a result, we join other scholars in challenging how policy implementation is often described in textbooks, as a stage in the policy process that comes after policy adoption.7 Instead, we define effective implementation as deliberate, institutionally sanctioned change motivated by a policy or program oriented toward creating public value results on purpose. When implementation is successful, it becomes incorporated in everyday work and part of standard operating procedures. Effec- tive implementation is deliberate because it involves conscious design, planning, and assessment of what occurs. Effective implementation also is institutionally sanctioned, backed by political authority and a pragmatic understanding of reasonable actions within the operational constraints of the setting. Yet effective implementation is focused on change, introducing new or modifying existing patterns of actions. But many times the process of change proceeds in unexpected ways. There are a number of important indicators of implementation effectiveness. Framing Implementation 11 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:07:46. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 12 When successful, policy and program implementation creates public value by enabling collective impact beyond the narrow self-interest of any particular actor or institution.8 When policy and program implementation is successful, what once was new and foreign becomes incorporated in everyday work, with the requisite resources necessary to sustain the change in … \% PART ONE GOVERNANCE PRINCIPLES, ROLES, AND STRUCTURE CH001.indd 1CH001.indd 1 3/2/10 4:10:43 PM3/2/10 4:10:43 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . CH001.indd 2CH001.indd 2 3/2/10 4:10:44 PM3/2/10 4:10:44 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . \% 3 CHAPTER ONE IN THE SPIRIT OF SERVICE: INTRODUCTION TO THE NONPROFIT WORLD The only ones among you who will be really happy are those who will have sought and found how to serve. — ALBERT SCHWEITZER 3 Virtually every society shows its voluntary spirit and philanthropic instinct by creating informal community groups, charitable nongovernmental organiza- tions, or faith - based organizations and places of worship. In countries around the world, nonprofi ts are a vibrant, essential element of national life. They struggle to reduce poverty and bring an end to homelessness. They strive to build safe places to learn and play, create inspiring art and music, and protect natural resources. Nonprofi t organizations span a wide spectrum of mission areas, resources, values, history, and stakeholders — from small, local homeless shelters to large, international trade associations; from community foundations operating within a geographic region to educational institutions that attract students from around the country. Their funding may come from just a handful of sources or from an array of charitable contributions, membership dues, grants, fees from programs and services, and more. According to the Internal Revenue Service, the United States alone has more than 1.8 million voluntary, nonprofi t, and nongovernmen- tal organizations, with more recognized every month by the federal government as tax - exempt entities. Economic life in the United States and many other countries consists of three sectors: Public - sector organizations exist to serve the public good. They are part of govern- mental structures and are fi nanced largely by tax revenues. • CH001.indd 3CH001.indd 3 3/2/10 4:10:44 PM3/2/10 4:10:44 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 4 The Handbook of Nonprofi t Governance Private - sector organizations exist to produce a profi t for their owners. To do so they must meet the needs of a constituency who will pay for their goods or services. Nonprofi t - sector organizations exist to serve a social purpose, a constituency, or a cause. To do so successfully, they must earn or raise suffi cient funds to cover expenses and safeguard the organization ’ s future. They are not prohibited from creating excess revenue over expenses, but such surplus must be used to support the organization ’ s mission, not to be distributed as private gain. In nonprofi t organizations there are no individual owners who can claim organizational assets for their own benefi t. An Overview of the Nonprofi t Sector The nonprofi t sector sometimes is called the not - for - profi t sector, the third sector, the independent sector, the philanthropic sector, the voluntary sector, or the social sector. Outside the United States, nonprofi ts are often called nongovernmental organizations (NGOs) or civil society organizations. These other names emphasize the characteristics that distinguish nonprofi ts — voluntary sector to acknowledge the importance of volunteers and voluntary action, independent sector to distinguish nonprofi ts from business and government, and social sector to underscore how the activities of nonprofi ts enhance the social fabric of our country. The nonprofi t sector in the United States is vast and diverse and touches all our lives. The nonprofit organizations in this country in 2008 employed 10.5 percent of the country ’ s work force — close to ten million paid workers. Almost all nonprofi ts are exempt from federal, state, and local income taxes; state and local property taxes; and state and local sales taxes. They are, however, required to pay taxes on income derived from activities that are unrelated to their mission. Nonprofi ts are not exempt from withholding payroll taxes for employ- ees. Section 501(c) of the Internal Revenue Code, which outlines the types of organizations eligible for tax exemption, lists more than twenty - fi ve classifi cations of nonprofi ts, which include the major subcategories described in the following section. Public Charities Nonprofi ts that are exempt under Section 501(c)(3) of the tax code are often called charities, but these organizations do far more than provide free care and services to the needy. Hospitals, museums, orchestras, independent schools, public • • CH001.indd 4CH001.indd 4 3/2/10 4:10:44 PM3/2/10 4:10:44 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . In the Spirit of Service: Introduction to the Nonprofi t World 5 television and radio stations, and many other organizations are 501(c)(3) non- profi ts. Most U.S. nonprofi ts are classifi ed as public charities, and in 2008 nearly 1.2 million were registered with the Internal Revenue Service. To be recognized as a public charity, a nonprofit must be organized and operated for purposes that are benefi cial to the public interest. These purposes include Relief of the poor, distressed, or underprivileged Advancement of religion Advancement of education and science Creation or maintenance of public buildings or monuments Lessening of the burden of government Elimination of prejudice and discrimination Defense of human and civil rights Combating of community deterioration and juvenile delinquency A public charity must be able to show broad public support, rather than fund- ing from an individual source. Upon dissolution, its assets must be distributed to another 501(c)(3) charity. It is not allowed to engage in any partisan political activity. Lobbying is accepted but cannot be a substantial part of its activities. Individuals and corporations that give money to these organizations can deduct the value of gifts from their taxable income, provided they file itemized tax returns. Foundations Many individuals, families, businesses, and communities establish foundations as a way to support causes and programs that benefi t society. Foundations, which are also 501(c)(3) charitable nonprofi ts, are one of the most complex components of the nonprofi t sector. As a result of federal legislation passed in 1969, private foundations are subject to more stringent regulation and reporting requirements than other types of nonprofi ts. They are required to make grants equal to at least 5 percent of their net investment assets each year, and they generally pay a 2 - percent excise tax on net investment earnings. There are more than seventy thousand foundations in the United States: Private foundations usually have a single source of funding (an individual, a family, or a business), and use income from investments to make grants to chari- table nonprofi t organizations. The Ford Foundation, the Carnegie Corporation of New York, and the W. K. Kellogg Foundation are well - known examples. • • • • • • • • • CH001.indd 5CH001.indd 5 3/2/10 4:10:45 PM3/2/10 4:10:45 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 6 The Handbook of Nonprofi t Governance Corporate foundations are private foundations that receive funding from — and make grants on behalf of — a corporation. The MetLife Foundation and the American Express Foundation are examples. Many corporations have in - house corporate giving programs instead of or in addition to corporate foundations. Operating foundations are “ hybrid ” foundations that use the bulk of their resources to carry out their own charitable programs, while also making grants to other charities. The Carnegie Endowment for International Peace and the J. Paul Getty Trust are examples of operating foundations. Community foundations pool the resources of many donors and focus their grantmaking on a particular city or region. The Cleveland Foundation and the New York Community Trust are examples of community foundations. The IRS classifi es community foundations as publicly supported charities, not private foundations. These groups are not subject to excise taxes or distribu- tion requirements like private foundations, and donations made to them by individuals are tax deductible. Some nonprofi ts, such as hospitals and public colleges, create related or sup- porting 501(c)(3) organizations that may be called foundations; these groups are fundraising (rather than grantmaking) organizations, and they typically raise money from a broad range of donors and then distribute the proceeds to the parent orga- nization. In addition, some other charities include the word foundation in their names even though they are not considered foundations according to legal defi nitions. Social Welfare Organizations To be tax - exempt as a 501(c)(4) organization, a nonprofi t must not be organized for profi t and must be operated exclusively for the promotion of social welfare. This means that the organization must operate primarily to further, in some way, the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). Nonprofi ts such as the NAACP, the National Rifl e Association, and the National Organization for Women are examples of social welfare or advocacy organizations. Contributions to 501(c)(4) organizations are not tax deductible, and 501(c)(4) nonprofi ts have greater latitude to participate in legislative advocacy, lobbying, and political campaign activities. Professional and Trade Associations Organizations whose missions focus on the advancement of the conditions of a particular trade or the interests of a community, an industry, or a profession generally qualify for tax exemption under Section 501(c)(6) of the tax code. • • CH001.indd 6CH001.indd 6 3/2/10 4:10:45 PM3/2/10 4:10:45 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . In the Spirit of Service: Introduction to the Nonprofi t World 7 Although contributions to these organizations are not tax deductible, member- ship dues may be deductible as business expenses. Many people believe that nonprofi ts receive most of their funds from pri- vate contributions. In reality, many nonprofi ts (hospitals and universities are good examples) generate revenue by charging fees for the services they provide, earning interest on investments, or producing and selling goods. Many organizations also receive funding from government, either in the form of outright subsidies or for providing services on a contract basis. The idea of the nonprofi t sector may be abstract, but the sector ’ s role in our society is tangible and easily recognized. Freed from the profi t motive that domi- nates business and from the constraints of government, the nonprofi t sector is a forum for the creation and dissemination of new ideas, an effi cient vehicle for deliv- ering social services, and a guardian of our environment, values, and heritage. Monitoring, Regulating, and Governing Nonprofi ts Nonprofi ts are not immune from damage that can be caused by unscrupulous and fraudulent solicitors, fi nancial improprieties, and executives and board members who care more about their own fi nancial welfare than the mission of the organiza- tion. Problems, when they do arise, are particularly disturbing because of the nature of nonprofi ts themselves — organizations created to provide some public benefi t. Most people are familiar with the mechanisms that safeguard the integrity of government and business. Disenchanted voters can throw politicians out of offi ce, and the branches of government view each other with watchful eyes. Businesses have shareholders or owners and are monitored by government agencies such as the Securities and Exchange Commission and the Occupational Safety and Health Administration. The media monitor both sectors and are quick to point out cases of corruption and poor performance. Far fewer people understand how nonprofi ts are monitored and regulated. For much of its history, the nonprofi t sector has operated outside the realm of harsh public scrutiny. No government agency exists exclusively to monitor the activities of nonprofi ts, most nonprofi ts aren ’ t required to hold public meetings, and few journalists report on nonprofi ts with the same depth and focus devoted to business and government. Nevertheless, nonprofits have many lines of defense against fraud and corruption: Boards . All nonprofi ts are governed by a board of directors or trustees (there ’ s no real difference) — a group of volunteers that is legally responsible for making • CH001.indd 7CH001.indd 7 3/2/10 4:10:46 PM3/2/10 4:10:46 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 8 The Handbook of Nonprofi t Governance sure the organization remains true to its mission, safeguards its assets, and operates in the public interest. The board is the fi rst line of defense against fraud and abuse. Private watchdog groups . Several private groups (which are themselves nonprofi ts) monitor the behavior and performance of other nonprofi ts. Some see their mission as advising donors who want to ensure that their gifts are being used effectively; others are industry or “ trade ” groups that provide information to the public and encourage compliance with generally accepted standards and practices. State charity regulators . The attorney general ’ s offi ce or some other part of the state government maintains a list of registered nonprofi ts and investigates complaints of fraud and abuse. Often the state attorney general serves as the primary investigator in cases of nonprofi t fraud or abuse. Almost all states have laws regulating charitable fundraising. Internal Revenue Service . A small division of the IRS (the exempt organizations division) is charged with ensuring that nonprofi ts comply with the eligibil- ity requirements for tax - exempt status. IRS auditors investigate the fi nancial affairs of thousands of nonprofi ts each year. As a result, a handful have their tax - exempt status revoked; others pay fi nes and taxes. In 1996, legislation authorized the IRS to penalize individuals who abuse positions of infl uence within public charities and social welfare organizations. Before that change, the only weapon available to the IRS was to revoke tax - exemption, which resulted in the denial of service to the clients and constituents the organization was cre- ated to help. Because they fall short of revocation of tax - exempt status, these provisions are called intermediate sanctions. Donors and members . Some of the most powerful safeguards of nonprofi t integrity are individual donors and members. By giving or withholding their fi nan- cial support, donors and members can cause nonprofi ts to reappraise their operations. Media . Most of the major scandals involving nonprofi t organizations in recent years have come about as a result of media investigations and resulting news stories. Although many nonprofi t leaders feel misunderstood or even maligned by negative media coverage, this media watchdog role has resulted in increased awareness and accountability throughout the sector. Starting a Nonprofi t Organization Americans are known for their pioneer temperament, community spirit, and help - thy - neighbor attitude. We show social consciousness, concern for the • • • • • CH001.indd 8CH001.indd 8 3/2/10 4:10:46 PM3/2/10 4:10:46 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . In the Spirit of Service: Introduction to the Nonprofi t World 9 environment, commitment to saving historic sites, responsibility to advocate individual rights, and an urgency to do this all as a personal vocation for a cause. This commitment often leads to a desire to start a nonprofi t organization. Forming a nonprofit requires more than passion or devotion. One needs understanding of fi nancial management, knowledge of legal requirements, mana- gerial skills, community relations, familiarity with issues in the fi eld, friends and supporters, and more than anything, time, energy and endless patience. Questions to Ask Before Starting a Nonprofi t 1. Is somebody already doing what I would like to do? There is no sense in duplicating an effort that already exists. Maybe there is a possibility of working with an existing organization as a consultant, fund- raiser, employee, direct - service volunteer, or board member. 2. Is this the right time and place for starting a new organization? How will the idea be received by the community? Is there a true need for my services? Have I tested the idea, or am I the only one who thinks it is essential? Who are the constituents? 3. How would I fi nance my organization? Do I have the necessary seed money? If not, where can I get the initial funding? Have I developed relations with the leaders in the community? How much fundraising will I have to do? Do I understand that grant funding is highly competitive and therefore not dependable? Should the services of my organization be free, or is this how I will produce earned income? Should I form a membership organization and charge a fee? Could I associate my group with an already established organization? 4. Do I understand the steps of forming a nonprofi t organization? There are a multitude of procedures to take care of before a nonprofi t organization is ready to function: forming a board, drafting bylaws, develop- ing a strategic plan, incorporating, applying for tax - exempt status, securing funding, setting up an accounting system, locating an offi ce, applying for licenses, recruiting staff, and so on. 5. Are my fi nancial ambitions appropriate for the cause? Running a nonprofi t or serving as a nonprofi t board member is not going to fi ll my pockets with cash. Staff members can be compensated justly; board members normally serve as volunteers and should not seek any personal bene- fi t from this affi liation. Will I be content to serve and work for my cause, get satisfaction from the results of my labor, and always put my organization fi rst before thinking of my personal gain? CH001.indd 9CH001.indd 9 3/2/10 4:10:46 PM3/2/10 4:10:46 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 10 The Handbook of Nonprofi t Governance To be effective at fulfi lling its purpose, every nonprofi t organization must have a carefully developed structure and operating procedures. Good governance starts with helping the organization begin on a sound legal and fi nancial footing in compliance with the numerous federal, state, and local requirements affecting nonprofi ts. 1. Determine the purpose of the organization . Every organization should have a writ- ten statement that expresses its reason for being. Resources : Board members, potential clients and constituents. 2. Form a board of directors . The initial board will help translate the ideas behind the organization into reality through planning and fundraising. As the orga- nization matures, the nature and composition of its board will also change. Resources : BoardSource, planning and management consultant. 3. File articles of incorporation . Not all nonprofi ts are incorporated. For those that do wish to incorporate, the requirements for forming and operating a nonprofi t corporation are governed by state law. Resources : State secretary of state or attorney general ’ s offi ce. 4. Draft bylaws . Bylaws — the operating rules for the board — should be drafted and approved by the board early in the organization ’ s development. Resources : Attorney experienced in nonprofi t law. 5. Develop a strategic plan . Strategic planning helps express a vision of the organiza- tion ’ s potential. Outline the steps necessary to work toward that potential, and determine the staffing needed to implement the plan. Establish program and operational priorities for at least one year. Resources : Board members, plan- ning and management consultant. 6. Develop a budget and resource development plan . Financial oversight and resource development (for example, fundraising, earned income, and membership) are critical board responsibilities. The resources needed to carry out the strategic plan must be described in a budget and fi nancial plan. Resources : Fundraising consultant. 7. Establish a recordkeeping system for the organization ’ s offi cial records . Corporate docu- ments, board meeting minutes, fi nancial reports, and other offi cial records must be preserved for the life of the organization. Resources : State secretary of state or attorney general ’ s offi ce. 8. Establish an accounting system . Responsible stewardship of the organization ’ s fi nances requires the establishment of an accounting system that meets both current and anticipated needs. Resources : Bookkeeper experienced in nonprofi t accounting. CH001.indd 10CH001.indd 10 3/2/10 4:10:47 PM3/2/10 4:10:47 PM BoardSource, BoardSource, S., & John, W. &. S. (2010). The handbook of nonprofit governance. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-09-28 23:51:07. C o p yr ig h t © 2 0 1 0 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . In the Spirit of Service: Introduction to the Nonprofi t World 11 9. File for an Internal Revenue Service determination of federal tax-exempt status . Nonprofi t corporations with charitable, educational, scientific, religious, or cultural purposes have tax - exempt status under section 501(c)(3) — or sometimes section 501(c)(4) — of the Internal Revenue Code. To apply for recognition of tax - exempt status, obtain form 1023 (application) and publication 557 (detailed instructions) from the local Internal Revenue Service offi ce or from the IRS Web site http://www.irs.gov/charities/index.html . Though it is not essential to consult an attorney when preparing this document, many orga- nizations do seek the assistance of an attorney experienced in nonprofi t law. Resources : Local IRS offi ce, attorney. 10. File for state and local tax exemptions . In accordance with state, county, and munici- pal law, apply for exemption from income, sales, and property taxes. Resources : State, county, or municipal department of revenue. 11. Meet the requirements of state, county, and municipal charitable solicitation laws . Many states and local jurisdictions regulate organizations that solicit funds within that state, county, or city. Usually compliance involves obtaining a permit or license and then fi ling an annual report and fi nancial statement. Resources : State attorney general ’ s offi ce, state department of commerce, state or local department of revenue, or county or municipal clerk ’ s offi ce. 12. Other steps : Obtain an employer identifi cation number (EIN) from the IRS. Register with the state unemployment insurance bureau. Apply for a nonprofi t mailing permit from the U.S. Postal Service. Obtain directors ’ and offi cers ’ liability insurance. The Board of a Start - up Nonprofi t When setting up a nonprofi t, the founder or founders form the fi rst board for an organization. Start with a small but committed group that has the skills and exper- tise necessary to get started. Here are some suggestions: Include people who are familiar with constituents and their needs. Include people who have served on a nonprofi t board or staff. If the organization depends on outside funding, engage someone who can help develop a fundraising plan. Find someone who understands the fi eld or mission area. Include someone who is comfortable with technology. Bring in innovative people who have new ideas. Make sure all board members can work as a team. • • • • • • • Trim Size: 7in x 9.25in Sandfort p01.tex V2 - 12/16/2014 7:11am Page 1 P A R T O N E The Implementation Landscape Reformers are institutional gardeners more than architects and engineers. They reinterpret codes of behavior, impact causal and normative beliefs, foster civic and democratic identities and engagement, develop organized capabilities, and improve adaptability.1 The great thing about [gardening] is the way something new is always happening . . . Each year there are new varieties to discover in the annual crop of seed catalogs, new trends to dabble with and new planting schemes to explore. And apart from the dazzling variety of the plants themselves, there are the imponderables of pests, problems and weather that combine to make each season a new gardening adventure. But some things never change—the basic skills of sowing, planting, and cultivation.2 1 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort p01.tex V2 - 12/16/2014 7:11am Page 2 In part 1, we describe the landscape of our approach to policy and programimplementation. While we integrate prior approaches to understanding imple- mentation in public contexts, we devote attention to describing an alternative way to view implementation, suggesting criteria for assessing effectiveness, and explaining why things happen the way they do. Chapter 1 presents our definition of effective implementation and key elements in our approach. It is worth noting that this approach is purposefully pragmatic, grounded in academic thinking, but also drawing considerably from experience and reflection. And it is context dependent. Effective implementation cannot be reduced to a generic set of skills that can be applied universally across all settings. Policy-specific expertise is essential, and we introduce case examples that we follow throughout the book to elucidate the dynamics of implementation analysis in specific settings. Chapter 2 situates our approach within the context of three other traditions of scholarship and practice: political processes and authority, governance and man- agement, and policy and program evaluations. One of our motivations for writing this book is the cognitive dissonance we often feel when engaging scholarship in any one of these areas. On one hand, each directly speaks to the implementation system and its challenges. But on the other hand, each informs only one piece of the implementation puzzle—political and power dynamics, the governance sys- tem, or interventions targeting behavioral change. In our work as practitioners and now scholars, we navigate across these artificial boundaries, borrowing from each the relevant aspects for implementation. We think that this is an important con- tribution for future students and practitioners and therefore share these insights in chapter 2. Finally, in chapter 3, we apply the concept of strategic action fields to the imple- mentation system as a way to suggest a systematic way to explain what happens in implementation systems. By doing this, we emphasize that these systems are complex, not merely complicated. They cannot be neatly reduced to a set of fac- tors or variables that predict success, but rather must be viewed as dynamic, living social systems. Each level in the implementation system is a strategic action field with a unique social structure and dynamics that shape the core program. The core program is what distinguishes implementation from other change initiatives—it involves establishing viable options, using a logic of change, and selecting a means 2 Effective Implementation in Practice Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort p01.tex V2 - 12/16/2014 7:11am Page 3 for activity coordination. This is a new way of thinking about the implementation system. And like any other new idea, it may take some time to digest the concepts. We continue to weave the concepts presented in this chapter throughout the rest of the book. By its end, we believe this new way of thinking can become second nature and improve your own endeavors as implementation practitioners. Part One: The Implementation Landscape 3 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort p01.tex V2 - 12/16/2014 7:11am Page 4 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 5 c h a p t e r O N EFraming Implementation By April 2014, Sandra Martinez, manager at Connect with Health Colorado,could finally stop to breathe and reflect on the events of the previous year.1 The federal Affordable Care Act (ACA) was a major change in public policy (see box 1.1), and her organization, a nonprofit formed by the legislature to implement the state’s health care insurance marketplace, was at the center stage of Colorado’s efforts to get the first wave of citizens enrolled. While in late 2013 public and national media attention reached fever pitch when operational challenges threat- ened the federal insurance website marketplace, Colorado was not caught in that controversy. Because it was one of the seventeen states that elected to operate its own insurance exchange, she and other leaders in the state’s public, nonprofit, and private health organizations focused their attention on other important imple- mentation activities. There had been some delays in the state-run enrollment pro- cess, largely because of the state’s effort to sign up as many people as eligible into Medicaid to reduce citizens’ expenses. Yet a sizable number had completed an application, some drawing on the support of navigators contracted to provide indi- vidual support in making insurance selections. Box 1.1 Overview of National Health Care Reform Lauded by some as the most significant social welfare law passed in the United States for half a century, the signing of the Patient Protection and Affordable Care Act by President Obama in March 2010 set into motion a complex series of events. Termed “Obamacare” by political adversaries, the law’s goals focused (continued) 5 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 6 (Continued) on increasing the quality and affordability of health insurance, decreasing the number of uninsured Americans, and reducing health care costs. Implementa- tion of some features began immediately, but political controversy and legal challenges created initial uncertainty for states as they considered how to craft their own health care policy in relation to federal action. When the Supreme Court ruled the act constitutional in June 2012, states began deciding which of the many options offered in the act they would pursue. For example, states had the option of expanding the Medicaid program to provide more afford- able insurance for low-income people, creating health care marketplaces or exchanges to help individuals and small employers purchase private insurance, or making changes to existing state-based health programs. Other states chose to let the federal default options take effect. Like other states, Colorado had established the Connect with Health exchange as a quasi-governmental agency, governed by a legislatively appointed board representing a range of stakeholders to oversee the program’s direction and ensure public accountability. They had convened working groups to establish the plans and strategies of implementation focused on health care plans, disadvantaged communities, small businesses, and consumer services. Other groups in the state raised funds from private sources to investigate models for consumer support and public education. Martinez, along with some members from these work groups, participated in a number of national events and networks funded by private foundations that brought together state leaders to share the strategies being used to resolve implementation challenges. She found these efforts invaluable; they provided a neutral learning place and valuable information that helped improve decision making. The need for health care reform in Colorado was high. Compared to other states, a large number of uninsured children and adults either had no health care or paid high out-of-pocket expenses.2 In 2011, the governor had signed into law the state’s policy authorizing Medicaid expansion3 and the development of the insurance exchange. As in other states, eligibility for support was tied to income eligibility: the lowest-income citizens accessed health insurance through expansions in Medicaid, another group was eligible for tax credits to decrease out-of-pocket costs, and others could now access insurance through an unsubsidized marketplace benefiting from group-negotiated insurance terms. But 6 Effective Implementation in Practice Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 7 in May 2013, following the lead of the Colorado Health Foundation, the governor also declared a goal of making the state the healthiest in the nation, raising the urgency and political salience of the issue in the state. Over the previous year, there had been an unprecedented number of public-private initiatives focused on the governor’s goals of promoting prevention and wellness, improving service coordination, and making operational changes in payment and information technology. And while sometimes tensions had erupted between state leaders about the pace and consequence of the changes, the network between major organizations had held together. The Colorado Department of Health Care Policy and Financing played an important role in the state as the agency that authorized many of the public programs. The department’s managers, such as Maurice Brown, entered into the contracts with the ten insurance plans advertising on the Connect with Health Colorado website. Accountable to the federal Department of Health and Human Services, ACA activities were significantly influenced by the department’s years of experience administering Medicaid, Medicare, and the Children’s Health Insurance Program. The new policy also fit solidly into the organization’s new articulated mission of improving health care access and outcomes for citizens while demonstrating sound stewardship of financial resources. Managers had developed six organizational goals, including strategies to improve services and align communication, technology, and staffing. The overarching intent was to transform the health care system from a traditional fee-for-service model into a regional outcomes-focused coordinated system of care. The ACA programs were included in this larger structure promoted by the department, although compared with his peers, Maurice was more extensively involved with external groups such as Connect with Health, the Colorado Health Foundation, and other implementation working groups because of the policy’s visibility. While the policy had an impact on many organizations that interacted with citizens—health insurance companies and co-ops, health providers that now pro- cessed bills for fewer uninsured people, mental health practices that now faced economic pressure to join larger groups to ease billing—the agencies providing outreach to disadvantaged groups were particularly important in the first few years because of the law’s goal to enroll the uninsured. Informed by research conducted by a coalition of consumer advocates, the state contracted with public health and community-based agencies to provide exchange navigation, education, and sup- port about the various insurance options. In original discussions, some exchange Framing Implementation 7 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 8 planners had believed it would operate like the travel website Travelocity, which allows easy comparison among various options. Yet the unveiling of Connect with Health Colorado revealed that enrolling in health care insurance is much more complex than booking an airline flight. At one time there were over sixty-five policies to choose among, and managers like Noah Manning soon discovered that enrollment assistance took considerably more time than what his organization had originally budgeted. The face-to-face work fell to the cadre of navigators and health advocates who provided enrollment counseling. Yet at the front lines, the dynamics were complex. On the one hand, while navigators such as Cynthia Wang provided information for free to low-income citizens, other certified health advocates received commissions for their services. And consumers’ needs were complex, often requiring individ- ualized assistance. Cynthia had to remind some people to save documentation of expenses to qualify for tax credits at the end of the year. For others, after they had received their insurance cards, she coached them on how to find and use the health care, which many had been putting off for years. Outside of the metropolitan areas, this task was even more challenging because of the limited numbers of clinics and hospitals in many communities. As Cynthia sat with people, she heard each story in turn—the recently laid-off construction worker who couldn’t afford the insur- ance fees, the elderly retail worker whose employer had joined the exchange but offered inadequate coverage for his needs, the disabled veteran who had a difficult time driving the long distances to get her regular checkups. From each of their positions, Sandra, Maurice, Noah, and Cynthia face cer- tain issues that must be resolved in the process of implementing the ACA. While resolving ideological debates among large institutions might seem quite different from responding to customers’ confusion, these issues are interconnected. One level directly influences the implementation tasks and results at another; the Con- nect with Health Colorado working groups create the plans and online forms that the frontline navigators like Cynthia must fill out. The lessons Noah learned about work flow in outreach agencies are relevant to objectives articulated by the Department of Health Care Policy and Financing. The first policy implementation scholars described this reality as the “complexity of joint action” and, because of it, subtitled their book “why it is amazing that federal programs work at all.”4 In this book focusing on policy and program implementation, we are more optimistic. We believe the more that people like Sandra, Maurice, Noah, and Cynthia recognize their interdependence and have ways for talking about 8 Effective Implementation in Practice Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 9 and analyzing the complex implementation system they are part of, the more likely that policy and program implementation can help deliver desired results. However, this vision depends on implementers recognizing their essential roles in these systems. It requires professionals who will work hard to cultivate the analytical and social skills necessary to understand and intervene in complex systems. It requires courage to acknowledge ambiguity and still take action, particularly seizing opportunities to work across the multiple levels of the system. In our understanding, implementation is a form of policy practice, distinct from yet influenced by policy debate. It is centrally important to democratic gover- nance. And in its complexity, it can be both fascinating and challenging—solving one problem can reveal another layer needing to be addressed. In this book, we invite you to engage in the endeavor of studying implementation. Be curious about implementation dynamics, develop new conceptual language, and cultivate skills that will help you resolve the implementation quandaries you encounter. Through- out, keep in mind that while your actions are merely one part of the larger system’s dynamics, sometimes small interventions can improve whole system operation. Opportunities present themselves, often in unexpected ways, to better align an implementation system toward improving public value results. EXPLORING POLICY AND PROGRAM IMPLEMENTATION Implementation issues appear in less-dramatic gestures than the passage of major health care reform. In fact, when any new program or idea for an initiative is shared, practical questions about implementation often follow right behind. How do we take these mandates and make them real in our state? How do we pull together the right people to respond to the large foundation’s request for proposal? When a grant proposal is funded, how do we empower the program managers to develop procedures and training for staff? While we both recognize the urgency of these questions, we also believe that it is important to understand each question in its larger, systemic context. The first step in developing this ability is to internalize helpful lessons from social science that provide new ideas and consistent language for your analysis. By definition, policy and program implementation is complex. The issues that make their way into the public arena are significant, the solutions illusive. Energy conservation, affordable and adequate housing, educational effectiveness—all are desirable goals that require changes in personal, market, and organizational Framing Implementation 9 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 10 behavior to attain. Very few policies or programs designed to achieve such goals are self-implementing. And yet the means, the how of developing these solutions, is often quite illusive. Merely acting from organizational or professional interests does little to create integrative solutions that foster collective action across boundaries to advance the common good. This process is made more challenging because, as in Colorado’s ACA example, much of policy and program implementation devolves from the central government. Around the world, traditional public bureaucracies directly provide fewer services than they used to, depending instead on private organizations under contracts, grants, or subsidies to deliver public services. The diversity of organizations and varied government tools in use raises the substantive importance of improving implementation, but it is not easy. Public sector managers, accustomed to focusing their attention on how best to navigate bureaucratic structures and legislative oversight, must acknowledge how much of policy implementation falls outside the direct control of publicly employed staff. They must cultivate skills of network management, such as facilitation and negotiation, to work effectively in implementation systems. Private business and nonprofit managers, accustomed to acting on narrow conceptions of their organizational bottom line or interests, must recognize the significance of their involvement in public service provision. They must recognize the legitimacy of public accountability and yield some autonomy to be part of larger solutions to public problems. Both must reorient themselves away from organizational interests toward attention to the policy or program target population, to under- standing their behaviors, motivations, and concerns. Teachers, police officers, unemployment insurance clerks and doctors must recognize how their daily decisions—decisions to go beyond the formal requirements of their job in responding to students, citizens, and needy patients—often become the face of public policy. It is common for public managers, private and nonprofit leaders, and direct service professionals to complain that target groups often do not follow policy or program requirements; they often fail to act in ways that designers intend. This disconnect between systems operation and target group behaviors is a fundamen- tal challenge in most implementation projects. Yet seeking to understand the way such behavior is indeed logical by attending to the actual motivations and real- ities of these target groups is often essential for orienting what implementation improvements should address. 10 Effective Implementation in Practice Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 11 Compared to previous political science and public affairs scholarship, our notion of policy and program implementation grows more directly from sociology and organizational theories. As we discuss in chapter 2, many other scholars anchor implementation on policy intent or the characteristics of a par- ticular legislative statute.5 In this conception, policy implementation is focused on trying to bring the ideas of formal policy into reality. Policy implementation is viewed as the activities carried out by various institutions and implementers in pursuit of adherence to formal public policy and laws. As proponents of a government-centered, top-down approach to implementation, Dan Mazmanian and Paul Sabatier state, “Implementation is the carrying out of a basic policy decision, usually incorporated in a statute but which can also take the form of important executive orders or court decisions.”6 From this understanding, program implementation follows linearly from policy implementation. Imple- menters, county or regional governments or local service organizations, try to interpret and integrate policy directions into their ongoing operations through specific programs; they are a necessary component of policy implementation, operating at a smaller, more localized scale. But this linear relationship does not hold. Many times national policy is created after the documented impact from programmatic innovation at state or local levels. Kindergarten, electrical smart grid, HIV/AIDS services, and countless other examples evolved in this way. These programmatic ideas can be described, evaluated, assessed by others, and adopted by other states before national legislation is forthcoming. As a result, we join other scholars in challenging how policy implementation is often described in textbooks, as a stage in the policy process that comes after policy adoption.7 Instead, we define effective implementation as deliberate, institutionally sanctioned change motivated by a policy or program oriented toward creating public value results on purpose. When implementation is successful, it becomes incorporated in everyday work and part of standard operating procedures. Effec- tive implementation is deliberate because it involves conscious design, planning, and assessment of what occurs. Effective implementation also is institutionally sanctioned, backed by political authority and a pragmatic understanding of reasonable actions within the operational constraints of the setting. Yet effective implementation is focused on change, introducing new or modifying existing patterns of actions. But many times the process of change proceeds in unexpected ways. There are a number of important indicators of implementation effectiveness. Framing Implementation 11 Sandfort, J., & Moulton, S. (2015). Effective implementation in practice : Integrating public policy and management. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 14:41:52. C o p yr ig h t © 2 0 1 5 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Trim Size: 7in x 9.25in Sandfort c01.tex V2 - 12/16/2014 12:01pm Page 12 When successful, policy and program implementation creates public value by enabling collective impact beyond the narrow self-interest of any particular actor or institution.8 When policy and program implementation is successful, what once was new and foreign becomes incorporated in everyday work, with the requisite resources necessary to sustain the change in … PART ONE UNDERSTANDING, ENVISIONING, AND CREATING c01.indd 1c01.indd 1 4/30/2020 6:45:13 PM4/30/2020 6:45:13 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . c01.indd 2c01.indd 2 4/30/2020 6:45:14 PM4/30/2020 6:45:14 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 3 CHAPTER ONE UNDERSTANDING NONPROFIT ORGANIZATIONS I t all starts with the mission. Nonprofi t organizations have a distinct man- date to be good stewards of the resources they receive toward the pursuit of their mission, whether those resources come in as philanthropic dollars, government contracts and grants, membership dues, or earned income through revenue-generating activities. In this book we focus primarily on how nonprofi ts pursue their missions in the general social, cultural, legal, historical, and economic context of American life. We offer some examples from other countries and believe much of what we offer is applicable to international contexts. Still, this is a book about leadership and manage- ment and thus needs to be embedded in a particular place and time. The importance of context becomes clear when we look at the compe- tencies proposed in November 2011 for nonprofi t managers and leaders by the Non-Profi t Management Education Section of NASPAA (National Association of Schools of Public Affairs and Administration). Members of this NASPAA section suggest that students pursuing nonprofi t careers should be able to apply knowledge and understanding of 1. The history, values, ethics, and philosophies of nonprofi t organizations, and the need for transparency in nonprofi t management practices to maintain the public trust 2. The current legal frameworks for operating a nonprofi t organization, and the process of forming an incorporated nonprofi t organization c01.indd 3c01.indd 3 4/30/2020 6:45:14 PM4/30/2020 6:45:14 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 4 Managing Nonprofi t Organizations 3. The fundamental principles and concepts of fi scal management, rev- enue generation, and fundraising, and the ethical imperative to be a good steward of the fi nancial resources of the nonprofi t sector 4. The leadership challenges of the sector as they relate to the strategic management of nonprofi t organizations, which requires integrating the roles, responsibilities, and relationships of the board of directors, the executive director, the employees, the volunteers, and all stake- holders in meeting the mission of the organization 5. The human resource and volunteer management principles necessary to manage a nonprofi t organization’s core services and functions 6. The standards for accountability, performance measurement, and program evaluation, and the appropriate techniques for using both quantitative and qualitative methods to measure the performance of nonprofi t organizations The contents of this book can serve as a foundation for these six com- petency areas. We go beyond building knowledge and understanding in each area and add additional topics to enhance leadership and manage- ment capacity. To orient readers and provide a roadmap of what is to come, we offer a quick overview of each part and chapter. A Roadmap Through the Chapters Our comprehensive approach to excelling at managing and leading non- profi ts is built around competency and curriculum guidelines developed by NASPAA and by NACC (Nonprofi t Academic Centers Council). A summary of the NACC guidelines appears in the Appendix, where they are mapped to the chapters in this book. The six NASPAA competency guidelines have been given earlier in this chapter. Both NASPAA and NACC recognize the impor- tance of understanding the historical development of the nonprofi t sector and its values base. These issues are touchstones for our chapters. We discuss how ideas about specifi c management and leadership topics evolved over time and whether or not they are backed up by theory and empirical evidence. We repeatedly return to the ways in which values infl uence management and leadership decisions as well as the behaviors of board members, donors, staff, volunteers, and others, and how all this affects the effectiveness of a nonprofi t. As a social psychologist and a sociologist, we are steeped in our respec- tive disciplinary traditions. However, we draw from additional disciplines as well to introduce readers to source documents and thought leaders for c01.indd 4c01.indd 4 4/30/2020 6:45:14 PM4/30/2020 6:45:14 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Understanding Nonprofi t Organizations 5 the ideas in the book. All our topics and recommendations for practice are grounded in the academic literature. In choosing our main examples we made sure that readers would have enough background information and in some cases even videos for a further exploration of these cases. We also provide additional learning tools in the form of questions for discussion and exercises at the end of each of the main content chapters. In Part One, we discuss understanding, envisioning, and creating non- profi t organizations. In Chapter One, after this introduction to the book, we give a general overview of the nonprofi t sector. In Chapter Two we explore ways to consider the effectiveness of nonprofi ts and encourage ethical behav- ior among those working within them. We look at multiple dimensions of organizational effectiveness: goal achievement, resource acquisition, health and effi ciency of internal processes, stakeholder satisfaction, and ability to learn and adapt. In Chapter Three we examine topics important to those interested in establishing a nonprofi t organization and laying an effective groundwork for future action. We show the many different origins of non- profi ts. Drawing on the entrepreneurship literature, we consider how people, capital, and opportunity come together in nonprofi ts to deliver social value. We also discuss how to make the case for a new nonprofi t, including writing the business plan. Chapter Four covers options for organizational structure. We look at formalization, complexity, and other structural elements that infl u- ence information processing, and we consider possible structural defi ciencies. In Part Two we turn to strategizing, resourcing, and aligning, because throughout their existence nonprofi ts should have a mission and a vision and should acquire and manage resources to pursue them. Chapter Five covers the formulation of strategy. Topics include the general strategic orientations that nonprofi ts adopt and the strategic planning process. We also consider the emergence of strategies in nonprofi ts. Chapter Six cov- ers resource acquisition. In this chapter we examine the variety of revenue sources employed by nonprofi ts, including grants, gifts, and earned income. We discuss philanthropy, addressing types of gifts and donors, as well as fund development and grant proposal writing. Chapter Seven reviews fi nan- cial stewardship and management. We outline best practices for policies, accounting, budgeting, banking, borrowing, fi nancial risk management, auditing, and fi nancial analysis. Chapter Eight provides knowledge and tools for effective marketing. We cover the philosophy of and orientations to marketing, marketing planning, and branding. In addition we explore options for the pricing, promotion, and distribution of goods and services. In Part Three we focus on human resources and discuss leading, man- aging, and delivering the mission. Chapter Nine covers boards and the broader topic of governance. We discuss the responsibilities of boards, roles c01.indd 5c01.indd 5 4/30/2020 6:45:14 PM4/30/2020 6:45:14 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 6 Managing Nonprofi t Organizations of executive directors in relation to boards, determinants of board effective- ness, options for board confi gurations and composition, and tools for facili- tating governance and managing confl ict. Chapter Ten adds leadership and executive directors to the mix. We explore the basis of leadership and the responsibilities of executive directors. We also consider nonprofi t founders, leadership transition, and leadership development. In Chapter Eleven we turn our attention to strategic human resource management. We look at ways to measure and build human resource capacity. We then look at human resource management through the stages of initial involvement, develop- ment, maintenance, and separation. As a follow-up to Chapter Eleven, in Chapter Twelve we explore performance as determined by ability and motiva- tion. We offer tools to increase ability and to enhance motivation to perform. Our fi nal section, Part Four, covers evaluating, connecting, and adapting the nonprofi t. We begin with program evaluation in Chapter Thirteen. We see an effective program evaluation process as key to accountability man- agement. We review how to prepare for evaluation, choose an evaluation approach, apply theories of change and logic models, clarify program goals, and collect data, all with an eye to meeting the practical challenges to effec- tive evaluation. Chapter Fourteen covers public and government relations. In this chapter we look at image and reputation, strategic communication, and the public relations process. We also cover risk assessment and crisis manage- ment. Focusing on government relations, we discuss lobbying and advocacy. Chapter Fifteen covers partnerships, alliances, and affi liations. We examine reasons for collaboration, types of relationships, the collaboration process, and ways to promote successful collaborations. Chapter Sixteen introduces readers to models of organizational change and innovation in nonprofi ts, external and internal drivers of change, and resistance to change. We lay out strategies for managing change and innovation processes and include ideas on how to generate innovations. In Chapter Seventeen, our fi nal chapter, we consider the future of nonprofi t management. We share both our own and others’ thoughts on trends in the nonprofi t sector and how they may change nonprofi t management practices. Our goal is to leave readers with ideas on how they may develop their leadership skills for an ever-changing world. The Nature of Nonprofi t Organizations This book is not about management and leadership in general; it is about management and leadership in the nonprofi t sector. Yet it may not be clear t what we mean by nonprofit, given the many different types of nonprofits in the United States and the alternative terms used to describe the sector. c01.indd 6c01.indd 6 4/30/2020 6:45:14 PM4/30/2020 6:45:14 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Understanding Nonprofi t Organizations 7 Although none of these terms describe the nonprofi t sector completely, each emphasizes an important aspect of it. The term voluntary sector emphasizesr that the sector benefi ts greatly from the work of volunteers. The sector has always been rooted in voluntarism and although the degree of voluntary par- ticipation in service delivery and management varies across the organizational types in the sector, all have boards of directors and most do not offer any form of monetary compensation or reimbursement for expenses to board mem- bers. Independent sector, or rr third sector, emphasizes that the sector is part of nei-rr ther government nor the business sector, although it may have close relations with both. Not-for-profi t sector emphasizes the distinction from profi t-focused r enterprises. Charitable sector underscores the sector’s role in providing direct r relief to those in need. Philanthropic sector highlights the fact that many organi-r zations in the sector receive charitable donations. Civil society sector emphasizesr that many organizations in the sector are the embodiment of an engaged group of citizens with a shared interest in improving their communities. Tax- exempt sector points out that these organizations are eligible for exemptionsr from most taxes. These exemptions are granted to promote activities benefi t- ing the public. Social sector captures the role of the sector in enhancing ther social fabric. Other countries use yet other terms to describe the organiza- tions that people in the United States call nonprofi ts. Popular names include nongovernmental organizations (NGOs) ands civil society organizations. Throughout this book, we use the term most commonly used in the United States, the nonprofi t sector. It does not mean that the organizations in rr the sector cannot make a profi t. Organizational growth may rely on obtain- ing more resources than are needed to cover current expenses. What the term nonprofi t stresses here is that these organizations do not exist to maket a profi t to enrich private owners, as businesses do. In fact, nonprofi ts do not have owners or stockholders who are legally entitled to a share of the organization’s profi ts. Any profi ts made should be allocated toward the accomplishment of the organization’s mission. Diversity in the Nonprofi t Sector In the United States the common feature of all nonprofi t organizations is that they qualify for tax-exempt status under the U.S. Internal Revenue Code.1 Of the close to 1.6 million registered nonprofi ts in the United States, the majority are public charities, about 1 million. This group, exempt under Section 501(c)(3) of the tax code, includes but is not limited to churches, hos- pitals, clinics, schools, day-care centers, all manner of human service organi- zations, museums and theaters, and a variety of neighborhood organizations. c01.indd 7c01.indd 7 4/30/2020 6:45:15 PM4/30/2020 6:45:15 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 8 Managing Nonprofi t Organizations Members of this group have broad public support, rather than funding from a single source, and are considered public-serving organizations. In g Chapter Three we go into more detail on the qualifi cations an organization must meet to be classifi ed as a public charity. Public charities employ over 7 percent of the country’s paid workforce. The U.S. tax code recognizes twenty-fi ve types of nonprofi ts, including public charities, the most common type. About 100,000 nonprofi ts are clas- sifi ed as private foundations. These nonprofi ts make grants to support worthy causes and may operate their own programs using funding from a single source or a small number of sources. Over 500,000 tax-exempt organiza- tions are classifi ed as other types of nonprofi ts, such as chambers of com- merce, fraternal organizations, social and recreational clubs, and business leagues. These nonprofi ts provide valued services and attract resources as mutual benefi t (member-serving) organizations. Overall in 2009, registered gg nonprofi ts in all Internal Revenue Service (IRS) categories accounted for 9 percent of the wages and salaries paid in the United States. There is no precise, accurate count of the number of organizations mak- ing up the U.S. nonprofi t sector. The U.S. government does not require churches and other religious places of worship to register as nonprofi ts, so it is diffi cult to get a handle on how many exist. One estimate is that there are close to 280,000 religious congregations in the country, all eligible for the benefi ts given to 501(c)(3) nonprofi ts.2 There are also many grassroots orga- nizations that are not legally incorporated and thus left uncounted. These may be local, volunteer organizations that have a political change agenda or that rely on volunteer workers to care for and help others using little fi nancial capital or physical infrastructure. David Horton Smith suggests that the nonprofi t sector also contains what he refers to as deviant nonprofi ts, such as gangs, cults, covens, and quasi-underground organizations such as the Ku Klux Klan. These organizations operate outside normal conventions and are not legally recognized or tax exempt, but they are like nonprofi ts in not being organized to make a profi t.3 A variety of factors account for the existence of this diverse set of orga- nizations.4 In the early history of the United States, voluntary action was the primary way things got done in communities. Lacking an extensive govern- ment and with limited private wealth, citizens voluntarily banded together to deal with social problems. Some nonprofi ts were established to provide ser- vices that neither government nor businesses would or could effectively pro- vide. Nonprofi ts often function in areas where markets are lacking, such as the provision of food and shelter to those without money to pay for them. In addition, nonprofi ts provide services that government, with its reliance on c01.indd 8c01.indd 8 4/30/2020 6:45:15 PM4/30/2020 6:45:15 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . Understanding Nonprofi t Organizations 9 voter mandates, cannot. For example, nonprofi ts provide public health ser- vices and education that government is unable to fund with public dollars. Nonprofits serve a number of other functions. They are an impor- tant feature of the U.S. political landscape, providing vehicles for com- bining people’s individual voices and pushing their desires for action. Advocacy nonprofi ts can be found on all sides of political issues. In this way they contribute to pluralism in the U.S. political system. Nonprofi ts may also provide people with places to meet and to relate to others who share their interests and values. This gives individuals ways to have fun and to enjoy activities such as sports competitions or cultural festivals. In this way nonprofi ts contribute to the establishment of social capital and the solidarity of American society, helping individuals to form bonds of trust and reciprocity with others. These bonds make it easier for community members to jointly address matters of common concern. When commu- nity members trust each other and can rely on each other to help when needed, joint actions such as community watch programs are more effec- tive. Nonprofi ts also help with personal development needs. They allow individuals to express their spirituality, creativity, and altruistic impulses and to develop social and leadership skills. At their core, nonprofi ts nur- ture and sustain the values and identities of their participants. Between September of 2009 and September of 2010, 26.3 percent of Americans over sixteen years of age volunteered through or for a nonprofi t. In 2010, nonprofi t organizations received $290.9 billion in charitable con- tributions (of which $211.8 billion came from individuals). These fi gures attest to the importance of nonprofits to the social fabric of American life. Couple this with the fi nancial scope of the nonprofi t sector and non- profi ts’ importance increases. In 2009, the nonprofi t sector’s share of the gross domestic product (GDP) was 5.4 percent. In that year, public chari- ties reported over $1.41 trillion in revenues. They also held $2.56 trillion in total assets. Leading and Managing in the Nonprofi t Sector Leaders and managers of nonprofi ts face a variety of challenges. One of the most important is to keep the mission in mind in all decision making. Nonprofi ts must operate to fulfi ll their mission and are limited in their engagement in activities far afi eld from it. In addition they must keep in mind that the real owner of a nonprofi t is the public.5 It is the public to whom they are ultimately accountable. There are no designated sharehold- ers or owners to please. Nonprofi ts are subject to the claims, and possible c01.indd 9c01.indd 9 4/30/2020 6:45:15 PM4/30/2020 6:45:15 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 10 Managing Nonprofi t Organizations control, of many stakeholders, including donors, clients, board members, staff, volunteers, government at all levels, and community members. The expectations of these stakeholders can vary widely and leaders must bal- ance competing demands. Lester Salamon and others describe a number of additional challenges.6 Many nonprofi ts face fi scal diffi culties, some starting with government cut- backs in the 1980s in areas where nonprofi ts were active. Government assis- tance has became more targeted and tied to stricter requirements. Not all nonprofi ts experiencing losses in government funding have been able to offset those losses with growth in private giving or earned income. There is growing competition as more for-profi ts move into areas traditionally served by nonprofi ts, such as health care, higher education, and employ- ment training. The rise of B corporations, which are required to make deci- sions good for society, not just their shareholders, adds to the continuing erosion of sector boundaries.7 In addition nonprofi ts are under pressure from funders who are demanding more evidence that the nonprofi ts they fund are making a measurable positive impact, with some funders seeing themselves as investors with rights to infl uence strategic decisions. The legitimacy of the nonprofi t sector has been challenged on a num- ber of fronts. One challenge is presented by those who feel this sector is part of an expanding government welfare state and is serving as an instru- ment of government. Another comes from those who feel it is too profes- sionalized and out of touch with those it serves. These criticisms, coupled with a number of high-profi le scandals, have raised public concerns about the nonprofi t sector. This confronts nonprofi ts with a distinctiveness impera-s tive.8 Nonprofi ts need to reinforce their identity and their worthiness for the benefi ts and discretion afforded them. As this short summary of challenges illustrates, today’s nonprofi t lead- ers must navigate turbulent waters in the pursuit of their organization’s mission. As part of a larger network of actors, some with contradictory views and approaches to pressing social problems, nonprofi ts are shaping our current reality and our future. Innovations that emerge and are tested in nonprofi ts will contribute to fundamental debates about what is possible and how to achieve it or avoid it. We wrote this book with the sincere hope that it will not only provide information and tools to enhance the capacity of nonprofi t managers and leaders but also inspire individuals to consider careers in the nonprofi t sector. Whether serving in a paid position, as a board member, or as a vol- unteer, individuals working in the nonprofi t sector have the opportunity to act on their values and promote their vision for a better world. c01.indd 10c01.indd 10 4/30/2020 6:45:15 PM4/30/2020 6:45:15 PM Tschirhart, M., & Bielefeld, W. (2021). Managing nonprofit organizations. ProQuest Ebook Central <a onclick=window.open(http://ebookcentral.proquest.com,_blank) href=http://ebookcentral.proquest.com target=_blank style=cursor: pointer;>http://ebookcentral.proquest.com</a> Created from ncent-ebooks on 2021-10-04 17:03:02. C o p yr ig h t © 2 0 2 1 . Jo h n W ile y & S o n s, I n co rp o ra te d . A ll ri g h ts r e se rv e d . 11 CHAPTER TWO EFFECTIVE AND ETHICAL ORGANIZATIONS T he Chicago Association of Neighborhood Development Organizations (CANDO) Tclosed its doors in 2002 after suffering disagreement about its mission, diffi culty TT gaining fi nancial support, and disengagement by its members.1 Even its leaders ques- tioned the need for CANDO by the end of its last strategic planning process. What happened to this organization after almost twenty-three years of serving neighborhood development agencies and advancing policy benefi ting them? On some dimensions the organization was effective. It membership had grown from 20 agencies to over 220. However, this growth may partially explain its downfall as it tried to serve more and more diverse interests. Also, individual member agencies were becoming more powerful, partly due to the successful efforts of CANDO to get them legitimacy and resources. As they became more self-reliant, they had less need for CANDO. Many CANDO members pursued contracts from the City of Chicago, making them reluctant to support CANDO’s efforts to aggressively lobby the city for resources and changes. Over time a new generation of leaders, with less fi re in their bellies for advocacy and community organizing, took charge of CANDO. Expectations for quantifi able results grew, both for CANDO and its member agencies. In the end, CANDO’s lack of focus and expansive, noncontroversial programming left it with apathetic board members, staff, and external stakeholders who lacked the desire to fi ght for its survival. The Baptist Foundation of Arizona (BFA) closed after over fi fty years in exis- tence, but … Richard C. Box Gary S. Marshall BJ. Reed Christine M. Reed University of Nebraska at Omaha New Public Management and Substantive Democracy The authors are concerned that a remaining refuge of substantive democracy in America, the public sector, is in danger of abandoning it in favor of the market model of management. They argue &iat contemporary American democracy is confined to a shrunken procedural remnant of its earlier substantive form. The classical repuUican model of citizen involvement faded with the rise of liberal capitalist society in the late nineteenth and early twentieth centuries. Capitalism and democracy coexist in a society emphasizing procedural protection of individual liberties rather than substantive questions of individual development. Todays market model of government in the form of New Public Management goes beyond earlier reforms, Hireatening to eliminate democracy as a guiding prin- ciple in public-sector management. The authors discuss the usefulness of a collaborative model of administrative practice in preserving the value of democracy in public administration. Introduction: The Challenge This is an article about the relationship between Ameri- can democracy and public administration in a time when the public sector is under considerable pressure to adopt the values and operational techniques of the private mar- ket sector. We are concerned about the nature of contem- porary American democracy and the effect it has on people and the physical environment. Today, despite the success of American democracy in securing individual liberties and the material success of a wealthy society that pro- vides more goods and services to a broader range of Americans than ever before, vexing problems remain: poverty, poor-quality education, inequalities of race, gen- der, and wealth, crime and violence, destruction of for- est, farmland, wildlife habitat and other natural resources, and pollution of air and water. These are not trivial, new, or surprising problems, and the technology and resources are, for the most part, avail- able to make significant improvements. One reason the problems persist is that the public lacks the knowledge and political influence to give public administrative agencies a mandate to solve them. Various barriers stand in the way, such as control of information and the policy-making pro- cess by interest groups and economic elites, inertia in bu- Richard C. Box is a public administration faculty member at the University af Nebraska at Omaha, where he is chair af the doctaral program and editor of Administrative Theory and Praxis, the journal of the Public Administration Theory Network. He worked in local governments in Oregon and California for 13 years before completing his doctorate at the University of Southern California in 1990. His published research focuses on democracy and the theory and practice of community governance. Email: [email protected] Gary S. Marshall is an associate professor in the Department of Public Ad- ministration at the University of Nebraska at Omaha. He is a coordinator for the Public Administration Theory Network, an international network of pro- fessionals interested in the advancement of public administration theory. His research interests include public administration theory, public policy media- tion, and human resource development. His work can be found in Public Administration Review, Administrative Theory and Praxis, American Behav- ioral Scientist, American Review of Public Administration, and Journal of Public Affairs Educotion. Email: [email protected] B.J. Reed has been an the faculty af the University of Nebraska at Omaha since 1982 and serves as dean of the College of Public Affairs and Commu- nity Service. He has published in several journals in public administration and is the author of books on economic development, strategic planning, financial administration, and intergovernmental management. He serves on the national council of the National Association of Schools of Public Affairs and Administration and is past recipient of the Elmer Stoats Career Public Service Award. Email: [email protected] Christine M. Reed is a professor in the Department of Public Administra- tion at the University of Nebraska at Omaha. She joined the faculty at UNO in 1982, and recently she served a five-year term as interim associ- ate dean for graduate studies and associate vice chancellor for research and dean of graduate studies, returning to the PA faculty in the fall of 2000. Her teaching and research interests are administrative law and pub- lic administration iheory. She is currently the chair of the Section on Public Law and Administration of ASPA, as well as a member of the editoriol boards of Public Administration Review and Administrative Theory and Proxis. Email: [email protected] 608 Public Administration Review • September/October 2001, Vol. 6 1 , No. 5 reaucratic organizations, and resistance by experts to democratic governance (McSwite 1997; Yankelovich 1991). The resulting disconnect between the potential wishes of an informed populace and the condition of soci- ety is as old as the idea of democracy. In 1927, John Dewey called it the problem of the public (1985, 208, emphasis in original). One could argue that the people have chosen an equi- librium in the balance between democracy and efficiency (Okun 1975) that includes an instrumental, efficient pub- lic administration, one that does not challenge the status quo or unilaterally set out to solve problems. But this ar- gument is based on the questionable assumption that citi- zens possess relatively complete knowledge of the condi- tion of society, along with the ability to effectively wield the available political and institutional tools to effect change. Instead, the contemporary situation appears to us to be the result of constraints imposed upon public action by what may be termed liberal democracy in a capitalist setting. By liberal we mean the classical, Lockean view of the relationship of the individual to society from the Enlightenment of the seventeenth and eighteenth centu- ries, one that emphasizes protecting the individual from society. It is the polar opposite of the older, classical, re- publican tradition emphasizing the social nature of the in- dividual in constructing society jointly with others. By capitalist we mean a society based on the idea that each individual economic actor should be relatively free to ac- cumulate wealth independently from social control or col- lective determination of the public good. Liberal democracy is capable of fiercely resisting ev- ery assault on the individual—his privacy, his property, his interests, and his rights—but is far less effective in resist- ing assaults on community or justice or citizenship or par- ticipation (Barber 1984,4). This negative and procedural, rather than positive and substantive, conception of democ- racy has a solid foundation in American political thought, but so does a more substantive view of democracy as a quality pervading the whole life and operation of a national or smaller community, or if you like a kind of society, a whole set of reciprocal relations between the people who make up the nation or other unit (Macpherson 1977,5-6, emphasis in original). However, the problems remain, the public sector moves to fashion itself after private business, and we ask what it is about American democracy that al- lows this to occur. We further ask what the position of a self-aware (Waldo 1981, 10-11) public administration should be in such circumstances. As the problems are not new, our questions are time-worn companions to the study of public administration, though the answers have changed over the decades. Public administrators play an important role in the formulation and implementation of public policy; if they do not value and promote a substantive model of democracy, the likelihood of constructively dealing with pressing public problems decreases significantly. In this article, we argue that democracy as we know it is a shadow of the ideal, and modeling the public sector after the private may aggravate this problem. After examining the history and condition of democracy, we explore the nature of the current wave of governmental reform. Plac- ing it in historical context, we show that, while earlier re- form efforts included democracy as a central value (even if as a facade), todays reform efforts have largely side- stepped the question of democracy altogether, weakening the connection between citizens and the broader commu- nity. Next, we discuss the contemporary meanings of com- munity and democracy using managed health care as an example, discovering that imposing the market model on citizens and administrators does not support democratic self-determination. Recently, Jane Mansbridge (1999, 706) argued that we are in a holding pattern in relation to democracy: Today, not many Americans care about making this country more democratic, but at some point a larger fraction of the populace will come to care deeply about democracy again. When they do, several scholarly traditions have ideas that will help. Though Mansbridge may not have meant to in- clude public administration in the list of traditions that might help, we believe our field has something to offer in the recovery of substantive democracy. Thus, we conclude our analysis of the condition of democracy with thoughts about implications for public administration and the pos- sibility of moving toward a collaborative, as opposed to a market-oriented, model of public practice. Rediscovering Substantive Democracy In the twentieth century, Americans have largely come to accept the procedural view of democracy associated with classical liberalism, which as a philosophy is rooted in the twin ideas of individualism—negative liberty—and a distrust of government.... In this context, anything and everything, including democracy, take second place (Hollinger 1996, 7). In liberal democracy, the role of citi- zen consists of voting for representatives who act on be- half of their constituents. Substantive issues of social jus- tice, economic inequality, and the relationship of capitalism and the physical environment are addressed in the public space when problems become so severe they threaten sta- bility or safety (for example, social conditions during the Depression, or destruction of the ozone layer). Separating the procedural and substantive spheres in democracy leaves unanswered questions about outcomes, conditions of peoples lives, and realization of all peoples political potential that made democracy a politically ex- plosive concept in the past (Adams et al. 1990, 220). Is- New Public Management and Substantive Democracy 609 sues that affect the whole citizenry are dealt with in the context of liberal democracy, tightly controlling the extent to which the public, through institutions of govemment, can take action. The contemporary definition of democ- racy is characterized by the split between procedure and substance, with the public sphere being limited largely to questions of process. As Ellen Wood puts it, The very condition that makes it possible to define democracy as we do in modem liberal capitalist societies is the separa- tion and enclosure of the economic sphere and its invul- nerability to democratic power (1996, 235). Bowles and Gintis (1987, 41-62) suggest that Ameri- can democracy has gone through several accommoda- tions that provided temporary equilibria between prop- erty and personal rights. The first, the Lockean accommodation, limited political rights to the propertied classes, who would not be a threat to the economic order. This was followed in the nineteenth century by the Jeffersonian accommodation, which was based on abun- dant land and the idea that every free-bom male would have a chance to be a landowner and share in the economic advance of the nation. The Madisonian accommodation of the late nineteenth century and into the mid-twentieth century protected the few from the many by allowing pluralist competition to cancel out demands by the masses that might threaten the elite. After World War II, the Keynesian accommodation placated citizens with economic success and egalitarian economic policies. Today, it is difficult to predict how the globalization of economics and the expansion of market concepts into the public sector will affect democracy and public service, or to foresee the nature of the current and future accommodation. During the latter half of the nineteenth century and most of the twentieth century, citizens ceded control of public- sector policy making and implementation to bureaucratic professionalism. This made sense as part of building an administrative state to meet the demands of a growing na- tion, wars, depression, and so on. But now people mistrust the public sphere, regarding politicians as corrupt, bureau- crats as self-serving and inefficient, and goveming as a matter of invisible negotiations conducted in govemment offices by public officials and private interests (King and Stivers 1998b, 15). This gloomy view is countered somewhat by the long history of substantive democracy in American thought, indicated by the views of the anti-Federalists and other founding-era figures such as Thomas Jefferson. Jeffersons view of democracy included both classical liberal protec- tion of individual liberty and a classical republican ele- ment, drawn from the ancient Greeks and from eighteenth- century Scottish moral philosophers, in which democracy begins with people actively shaping a society grounded in social relationships (Sheldon 1991; Wills 1979). For Jefferson govemment is not top-down, but begins with the individual in a pyramid structure ... in which each higher level is held directly and immediately accountable to its next lower level (Matthews 1986, 126). The republican philosophy included the idea that lib- erty is participation in govemment and therefore is self- govemment (Dagger 1997, 17). Jeffersons radical de- mocracy required an egalitarian redistribution—and redefinition—of the social good(s) on an ongoing basis ... and govemments must either be stmctured or dissolved and restmctured to achieve that goal (Matthews 1986, 122). The ideal of citizen self-govemance can be found in the twentieth century as well. In the early part of the cen- tury, John Dewey envisioned a future democracy in which the political and economic spheres would be joined. De- mocracy would be an ongoing process of citizens working toward cooperative, shared govemance of social institu- tions, including those of the market (Campbell 1996,177- 84). In Dilemmas of a Pluralist Democracy (1982), Rob- ert Dahl argued that it might be possible to mitigate some of the problems of liberal democracy by ensuring a fair distribution of wealth and making some economic deci- sions subject to democratic control. In his book. Strong Democracy (1984), Benjamin Barber advocated a shift from the weak, liberal version of democracy to a form he described in this way: Strong democracy is a distinc- tively modem form of participatory democracy. It rests on the idea of a self-goveming community of citizens who are united less by homogeneous interests than by civic education and who are made capable of common purpose and mutual action by virtue of their civic attitudes and par- ticipatory institutions rather than their altruism or good nature (117). Scholars have cautioned against assuming that a more active, substantive, communitarian democracy will re- sult in a better community (Conway 1996). They also note that a pure, classical, republican society may have serious consequences for individual liberty. Societies of the past that exhibited a greater commitment to shared govemance often did so at the expense of groups excluded from the definition of citizenship, such as women, out- siders, and slaves in ancient Athens (Phillips 1993). How- ever, it may not be necessary to abandon hard-earned progress on pluralism and individual rights and liberties to gain ground on substantive democracy (Dagger 1997, 3-7). Nor need substantive democracy represent an ex- treme departure from what we know and feel comfort- able with today. There is not space here, even if we felt equipped for the task, to construct a fully developed description of what our society would be like if it were more oriented toward substantive democracy. With many other thinkers, the au- 610 Public Administration Review • September/October 2001, Vol. 6 1 , No. 5 thors cited in the preceding paragraphs have examined as- pects of the economy, social life, the voluntary sector, and govemment, offering ideas that emphasize substance and the normative character of governance as well as process and protection of rights. For the limited purposes of this essay, our conception of the ideal of substantive democ- racy may be summarized as a setting in which people may, if they choose, take part in goveming themselves with a minimum of interference or resistance (for example, from economic or other elites, or administrative experts), and without being required to assume in advance a uniform or universal set of constraints (such as representative systems of decision making, or the normative, classical liberal view of the proper sphere of citizen action). This is a setting that allows people to create a society and future through in- formed dialogue and exchange of ideas (the classical re- publican model), in addition to the traditional American concem with defining rights and protecting and distinguish- ing the individual from the collectivity (the classical lib- eral model). It allows people to freely discuss their values and preferences absent the limitations of a predetermined split between the public (political) sphere and the private (economic) sphere. Thus, substantive democracy involves rekindling a public discourse about the purposes of collec- tive action, accepting a role for citizens and public admin- istrators in shaping the future. Public administration must be a key actor in any effort to rediscover substantive democracy because of the com- plexity of providing public services in contemporary soci- ety. Creating new forms of public discourse and imple- menting the policy outcomes requires attention to the administrative apparatus of govemment and to the inter- play of policy formulation and implementation. The task of rediscovering substantive democracy is made more dif- ficult by the spread, over the past three decades, of eco- nomic theory throughout the social sciences, a phenom- enon commonly referred to as economic imperialism (Udehn 1996, 1). Over the past decade or two in the field of public administration, economic theory has become an important normative infiuence on the management of public organizations and their relationship to the broader society. As a result, elements of New Public Management (NPM) are the expected mode of operation for many public agen- cies in the United States and in a number of other nations (Ketd 1997). This market-based model includes the familiar elements of shrinking govemment and making administration more efficient through use of private-sector performance-man- agement and motivation techniques. It advocates treating citizens like customers, separating public administrators from the public policy process, and convincing both that govemment is nothing more than a business within the public sector. The assumption is that people are rational self-maximizers who compete with others and respond primarily to economic incentives. When such behavior occurs, it may be efficient in some sense, but it may also pose a threat to democratic govemance (Terry 1998). This, then, is the problem of democracy and public ser- vice in a postindustrial, liberal capitalist society. It is a so- ciety in which democracy is equated with equal procedural and personal rights, but not democratic determination of economic property rights. To the extent this situation is at variance with the American ideal of democracy, today we have something of a false democracy. Liberal capitalism and procedural democracy displaced the earlier republi- can vision (Sandel 1996) as Americans built the profes- sional, bureaucratic, administrative state. Today the trend continues as the public sphere of life is increasingly occu- pied by the behaviors and values of the individualistic eco- nomic market. The effect on public administration is that the ideal public sector is thought to be small in size, effi- cient, and subservient, while simultaneously providing a broad range of effective, expertly mn services. This is para- doxical and frustrating, but not surprising given the politi- cal culture associated with liberal capitalist democracy. The Difference of New Public Management In many ways. New Public Management has character- istics of previous management reform efforts, particularly in the twentieth century. The progressive movement in- cluded the rise of the city manager form of govemment, the Hoover and Brownlow Commission recommendations, management by objectives, and program, planning, and budgeting systems, all of which spoke to values of man- agement efficiency, effectiveness, and performance im- provement that are so much a part of NPM. Rosenbloom refers to this and the public administration orthodoxy reflected in the politics-administration dichotomy (Rosenbloom 1993, 503). However, we argue that these were all couched or justified within the framework of broader democratic values. Moe (1994) makes a similar point about the National Performance Review (NPR), not- ing that NPR was fundamentally different from previous reforms, which all emphasized the need for democratic accountability of departmental and agency officers to the President and his central management agencies and through these institutions to the Congress (112). Though the NPR is different in several ways from NPM, they share a focus on economic, market-based thinking in govemment. The progressive movement began as a reaction against political machines and perceived subversion of democratic values through corruption and patronage systems that con- trolled who was elected to political office and who was rewarded with govemment employment. The rise of man- New Public Management and Substantive Democracy 611 agement reforms during this period focused on broaden- ing participation and increasing access to elected office and the political process. Judd argues that there was a clear class bias in this effort, in that municipal reformers shared a conviction that it was their responsibility to educate and instruct the lower classes about good government (Judd 1988, 89). Judd also links this movement to the rise of municipal experts. Similar arguments were made in the South in advocating for wresting control of the political process from the segregationist elements of the Democratic Party and reforming the political process. Richard Childs, a founder of the city manager form of government and an excellent example of the progressive management-reform spirit, said the purpose of the coun- cil-manager plan is not good government... but demo- cratic government (Childs 1952, 141). Childss intent was for the city manager form to achieve a practical working of the democratic process that would include sensitive responsiveness that will diligently cater to the sovereign people (141). This is not to say that pro- gressive reformers embraced these values or were even sympathetic to them in operation. Stivers (1995) has been critical of the motives of bureau men whose concerns about economy and efficiency, in her view, far outweighed social welfare interests. While one can debate whether the primary focus of progressive reformers was service or administrative efficiency (Schachter 1997), there is no doubt that preserving democratic values was a key argu- ment used to justify these efforts. Efficiency was always offered as a way to help achieve democratic accountabil- ity. Many of the management reforms proposed by the Taft, Brownlow, and Hoover commissions were also couched in terms of preserving democratic values. Luther Gulick, the driving force behind the Brownlow Commis- sion, was focused on how to link democratic leadership and accountability (Wamsley and Dudley 1998,329). The Brownlow Commission, describing government effi- ciency, stated the following: The efficiency of govern- ment rests upon two factors: the consent of the governed and good management. In a democracy consent may be achieved readily, though not without some effort as it is the cornerstone of the Constitution. Efficient management in a democracy is a factor of peculiar significance (Presidents Committee 1937, 2-3). The Hoover Commission framed its recommendations primarily in terms of the executive branchs accountabil- ity to Congress and the need to fix responsibility to the people, noting that responsibility and accountability are impossible without authority (Commission on Organi- zation 1949, 154). Mosher and Appleby both note the concerns, however, that existed over the rise of profes- sional management during this period. Mosher wrote that threats to public service and the morality of the service during this time included the potential move toward the corporate, the professional perspective and away from that of the general interest (1982, 210). Appleby (1952) ex- pressed concern about protecting democratic values and argued that two factors were most critical: exposing ad- ministrators and their decisions to the electoral process, and a bureaucratic hierarchy that forces managerial deci- sions to be reviewed by broader and more politically aware upper level administrators. As Arnold (1998) notes, the NPR reflects a very differ- ent orientation than previous reforms, even those that oc- curred under Carter and Reagan. As with NPM, this differ- ence is that NPR makes little or no distinction between the role of government and the role of the marketplace. Jn fact, NPR moves beyond the concept of managing government organizations like a business to the idea that business itself should perform governmental functions. Arnold (1998) and Rosenbloom (1993) both note that NPR has a distinctively populist cast combined with a heavy focus on public choice economics. Rosenbloom refers to NPRs use of neo-popu- list prescriptions that advocate decentralization, compe- tition, deregulation, load-shedding, privatization, user fees, and enterprise culture (506). Managerial ism and New Public Management have been worldwide phenomena. Democratic regimes in New Zealand, Australia, and the United Kingdom have all imple- mented some range of reforms consistent with NPM (Eggers 1997; Pollitt 1993; Stewart and Kimber 1996). Malta and Austria have also implemented NPM elements (Maor 1999). Each of these initiatives has had some com- bination of elements including cost cutting, creating of separate agencies or business enterprises to eliminate traditional bureaucracies, separating the purchaser of goods from the provider of those goods, introducing market mechanisms, decentralizing management authority, intro- ducing performance-management systems, moving away from tenure-like civil service systems to contractual and pay-for-performance personnel systems, and increasing use of customer-focused quality improvement systems (Armstrong 1998, 13). Credit for the impetus of these reforms is given to Ameri- can ideas, particularly the ideas of American public choice economists (Orchard 1998, 19-20). Pollitt (1993) links managerialism to Erederick Taylor and to Luther Gulick. While the ideas may have come from intellectual tradi- tions in the United States, their implementation has pri- marily occurred in other countries. They are being imple- mented in very different ways, largely as a result of legal, social, political, and historical traditions that exist in each country. New Zealand is most often cited as leading the way in implementing NPM beginning in 1984. However, Pollitt notes that the United Kingdom had actually begun implementing such reforms in the mid- to late 1970s (52). 612 Public Administration Review • September/October 2001, Vol. 61, No. 5 It is clear that New Zealands reforms have been the most substantial and ongoing, for several reasons. New Zealands initiative started with a Labour government and not with the more conservative National Party, but the NPM initiatives were supported by both. Second, New Zealand has no written constitution, a unitary rather than federated political system, a unicameral legislature, and a nonparti- san civil service. All these factors made implementation much easier to accomplish (Eggers 1997, 35-7). Coun- tries with federal systems like Australia have had mixed experience with implementing NPM. This is the primary reason managerialism reforms have had less impact in the United States, where the federal structure is the most de- centralized in the world. Also, NPM initiatives in the …