Strategies to Improve Nonprofit Governance to Increase Donations

Section 1: Foundation of the Study

In this study, the 2023–2024 Baldrige Excellence Framework

(Baldrige Performance Excellence Program, 2023) was used as a tool to

explore strategies that nonprofit organizational leaders use to improve

governance practices to increase donations. This study was completed in

compliance with the Walden University consulting capstone (Walden

University, 2021), in which I served as a scholar consultant. Section 1

establishes the foundation of the study, and Section 2 provides details of the

context of the study. Section 3 outlines the specific aspects of the client

organization through the lens of resource dependence theory (RDT), with a

discussion of my findings and recommendations.

Background of the Problem

The main source of a nonprofit organization’s financial resources is

donations. Many factors influence an individual’s or organization’s decision

to donate to a nonprofit organization. Governance practices have been

identified as one of the main contributors to donation behavior (Becker et al.,

2020; Seo, 2020). Governance practices have been recognized as a

mitigating strategy for combating agency problems, increased instances of

fraud, embezzlement, and financial loss (Abu-Khadra, 2020). Blouin et al.

(2018) stated that donor confidence has been negatively affected by reports

of financial impropriety among nonprofit organizations; as such, nonprofit

leaders have recognized the importance of developing strategies to

incorporate effective governance practices as a mechanism that encourages

potential and existing donors to contribute to the nonprofit’s mission

accomplishment.

Individual donors accounted for over 70% of the $466 billion

contributed to charitable organizations in the United States in 2020, and over

$2 billion of that amount was spent on fundraising initiatives to appeal to

potential donors (Kamatham et al., 2021). In the United States, the federal

government does not require nonprofit organizations to comply with many

of the regulatory requirements that for-profit organizations have to comply

with (Adena et al., 2019; Nguyen & Soobaroyen, 2019); however, there is a

regulatory form, IRS Form 990, that provides public accountability

information. Donors depend on organizations such as Charity Navigator and

BBB Wise Giving Allowance, as charity “watchdogs,” to provide financial

and governance information about charities (Hatfield, 2018) to make

informed decisions about giving. The leaders of nonprofit organizations rely

on donors to provide resources to fulfill mission accomplishment, and

governance practices contribute to donor confidence and the decision to

give. It is therefore imperative that leaders understand and implement

effective strategies to improve governance practices, impacting donor

confidence and increasing donations.

Problem and Purpose

The specific business problem was that some nonprofit leaders lack

effective strategies to improve governance processes and encourage donor

confidence to increase the levels of donations. The purpose of this

qualitative single case study was to explore strategies that nonprofit leaders

use to improve governance processes and encourage donor confidence to

increase the levels of donations.

Population and Sampling

The target population consisted of four senior executive members of

the donoramalgamation nonprofit organization in the Midwestern United

States. These leaders participated in semistructured interviews designed to

gather information about successful strategies the organization’s leaders

implemented to improve governance processes and encourage donor

confidence to increase the levels of donations. I also reviewed organizational

archival data, such as internal board reports and minutes, personnel records,

and organizational manuals.

Nature of the Study

The single case design was appropriate for this study because I

collected relevant data from the client organization’s internal archival

records and public forums and conducted semistructured interviews with

four senior executive leaders from the client organization. This approach

facilitated the exploration and identification of the strategies that nonprofit

leaders used to improve governance processes and encourage donor

confidence to increase the levels of donations. Researchers have the option

of choosing to conduct a qualitative, quantitative, or mixed methodology for

inspecting, measuring, and testing a proposed business problem. The

qualitative method was chosen for this study. Researchers use the qualitative

method to explore a phenomenon in a naturalistic and social environment,

focusing on answering the whys and hows of the phenomenon, using

nonnumerical data (Saunders et al., 2016). Conversely, a researcher using a

quantitative methodology will examine relationships among variables, using

statistical or numerical data (Marshall et al., 2022). The quantitative method

would not have been appropriate for this study because the purpose of the

study did not include examining variables’ characteristics or relationships.

Researchers may opt to use the mixed method for a study, where they use

measurements and analytical components of the qualitative and quantitative

methodologies (Saunders et al., 2016). The mixed method would not have

been appropriate for this study because the purpose of the study did not

include testing hypotheses for examining relationships. The qualitative

methodology was the most appropriate method because I explored strategies

that nonprofit leaders use to improve governance practices for encouraging

confidence to increase the levels of donations.

Researchers utilizing a qualitative research design can employ a case

study, phenomenology, ethnography, or narrative design (Yin, 2018).

Researchers use a case study design to develop and explore in-depth data in

a real-life setting (Saunders et al., 2016). A phenomenological design is used

to explore the commonalities of a group’s experiences (Yin, 2018). An

ethnographical design is used to explore a group’s cultural narrative (Guha et

al., 2021). A narrative design is used to interpret a personal story, or a

biography of an individual (Saunders et al., 2016). A phenomenological

design would not have been appropriate because it is used to explore a

business problem through the lens of the participants’ lived experiences. An

ethnographical design would not have been appropriate because I did not

explore a group's cultural commonalities. A narrative design would not have

been appropriate because I did not explore an individual’s personal story.

I applied a single case study design instead of a multiple case study

design for this study because I explored a business problem in a unique

phenomenon for a particular organization. A single case study design was

appropriate for this study because I identified and explored strategies that the

participating nonprofit organization leaders had used to improve governance

processes and encourage donor confidence to increase donations.

Research Question

The research question explored in this study was the following: What

strategies do nonprofit leaders use to improve governance processes and

encourage donor confidence to increase the levels of donations?

Interview Questions

The following questions were asked of nonprofit leaders:

1. What are some of the strategies you or other leaders use to improve

governance practices in the organization?

2. What major policies or programs have you or other leaders

implemented to encourage accountability within the organization?

3. What strategies have you or other leaders used to encourage a

strong relationship between potential donors and nonprofits?

4. What major obstacles have you or other leaders encountered

during fundraising initiatives?

5. How do you or other leaders measure the success of implemented

governance strategies and fundraising initiatives?

6. What feedback have you or other leaders received from current

clients about the impact of governance practices or accountability

standards on the rate of donations received?

Conceptual Framework

Pfeffer and Salancik’s (1978) RDT indicated that leaders need to

acknowledge and understand the ecological parameters that influence the

organization’s dependence on external entities for the sustainability of the

organization. Pfeffer and Salancik (1978) argued that leaders who

acknowledge and seek to understand the ecology of the organization will be

equipped to navigate the external challenges that threaten the sustainability

of the organization. The authors explained that though external factors are

uncertain and unexpected, leaders who understand the constraints and

influence of the organization’s dependence on external entities will be able

to incorporate strategies to mitigate the risk that these factors can have on

the organization.

Pfeffer and Salancik (2003) expanded and refined the prior work of

Pfeffer and Salancik (1978), which established a connection linking

resources and power to organizational behavior. Pfeffer and Salancik (2003)

explained that organizations that rely on external entities for resources

usually need to comply with the demands of external stakeholders. A

dependent organization becomes vulnerable to the demands of external

entities (Hung & Berrett, 2021), which dictates the organizational strategies,

compliance, and decision-making with which leaders will comply (Berrett &

Holliday, 2018). When leaders implement strategies to improve the

governance processes of the organization, they will be able to effectively

manage the effects of external dependency and donor confidence on the

levels of donations received. Consequently, Pfeffer and Salancik's (2003)

RDT was the lens through which I explored the strategies that nonprofit

leaders use to improve governance practices for encouraging donor

confidence, to increase the levels of donations.

Operational Definitions

The following terms have been defined, facilitating clarification of

their specific use within the context of this study:

Donors: Individuals or entities who support the mission of a charity or

nonprofit organization through monetary and nonmonetary contributions

(Finley et al., 2021).

Governance practices: A set of limitations conferred on the leadership

of an organization that promotes accountability, transparency, equity,

fairness, and disclosure (Lacruz et al., 2023; Shahid & Abbas, 2019).

Nonprofits: Organizations that offer socially beneficial services that

support the needs of a community (Farwell et al., 2019). Nonprofits are tax-

exempt under the Internal

Revenue Code, Section 501 (c)(3).

Assumptions, Limitations, and Delimitations

Assumptions

Assumptions in a qualitative single case study are necessary facts,

ascertained by the researcher, within the scope of the study that are

unverified (Zhou & Jiang, 2023). I made three major assumptions for this

study. I assumed that the participants would give honest and relevant

information during the interview process. Additionally, I assumed that the

four senior leaders had relevant experience implementing governance

practices that have encouraged donor confidence and increased donations.

The final assumption that I made was that the data collected would provide

the relevant information to answer adequately the scope of the research

question being explored for this study.

Limitations

Limitations are those restrictions that are outside of the researcher’s

control (Zhou & Jiang, 2023), which present potential weaknesses in a study.

A qualitative single case study can be suggestive and may not have

generalized applications of the findings (Yin,

2018) because of the unique-phenomenon nature of the business problem

being explored. Consequently, one limitation of this single case study

resided in the data collection that was exclusive to one donor-amalgamation

nonprofit organization in the Midwestern United States. Further, the

responses given by the four senior managers during the interviews may have

reflected biases and limited perspectives on the business problem being

explored.

Delimitations

Delimitations are the defined boundaries for the highlighted

limitations that were previously referenced (Coker, 2022). The first

delimitation of this qualitative single case study was that the four senior

leaders interviewed and the data collected and analyzed were exclusive to

the donor-amalgamation nonprofit organization in the Midwestern United

States. The donor-amalgamation nonprofit organization has been in

existence for more than 70 years, with the four senior leaders having more

than 20 years of operational experience relating to the scope of this study.

Significance of the Study

The study is significant in that some nonprofit leaders may be able to

identify and implement successful strategies to improve governance

processes to increase donor confidence and levels of donations. Nonprofit

organizations depend on external resources to remain sustainable (Ilyas et

al., 2020). Understanding how the improved effectiveness of governance

processes contributes to increased levels of donations can impact how

organizational leaders make decisions (Zhou & Ye, 2021). Nonprofit leaders

will be able to ascertain effective approaches to evaluate and improve

governance processes, improve relationships with key stakeholders, and

develop derivative services for contributing to the continued support of the

mission of the organization.

The reported findings derived from the study have the potential to

enrich organizations’ positive social contribution through increased altruistic

giving by members of the community for enabling expansion to benefit

communities’ citizens. When nonprofit leaders are equipped with effective

strategies to improve governance processes and encourage donor confidence,

the resulting increases in donor engagement could enhance the efficacy of

the social interactions within the community they serve. Engagement is a

key element for sustainability and a sense of community involvement in the

missions of nonprofit organizations. Additionally, improving governance

practices may result in increased donations that could contribute to nonprofit

leaders' ability to implement strategies to encourage sustainability practices,

enhance social initiatives, and encourage positive social and economical

enrichment.

A Review of the Professional and Academic Literature

Nonprofit organizations significantly contribute to the economy.

There are more than 10 million nonprofit organizations worldwide, with 1.3

million contributing to 5%– 10% of the economic GDP and 10% of the

employment in the United States (National Council of Nonprofits, 2022).

Researchers and scholars have extensively explored and studied many

business problems relating to the nonprofit industry. With this study, I

focused on the strategies that nonprofit leaders have used to improve the

governance practices of their organization to increase donations. This section

highlights literature that is relevant to my research topic. The section

includes a discussion of the application of

RDT to varied elements of this study’s focus, representing the conceptual

framework for this study. Theories with similar elements, as well as a theory

that expostulates the elements of RDT, are highlighted. The role of

governance practices and donor behavior is delineated. I conclude this

section by expounding on other strategies that nonprofit organizations have

used for financial viability and providing insight into the structure of

nonprofit organizations.

For this literature review, I used the Walden University Library and

the following research databases: Business Source Complete, Emerald

Insight, SAGE Journals, ScienceDirect, EBSCO, ProQuest, Google Scholar,

and GuideStar. The search terms and key words used included nonprofit,

nonprofit organizations, governance, regulatory compliance, fundraising,

resource dependence theory, donation behavior, donor motivation, strategic

planning, revenue diversification, and donors. In this study, I included 152

cited resources, with 90.2% being peer-reviewed articles. Among the

peerreviewed sources, 75% were published within 5 years of my anticipated

completion of this study.

Resource Dependence Theory

Competition for resources within the nonprofit industry has increased.

Nonprofits need resources from external contributors to survive, and

nonprofit leaders have had to adhere to the demands that suit the interests of

external stakeholders (Lacruz et al., 2019). Pfeffer and Salancik (2003)

explained that organizations that rely on external entities for resources

usually need to comply with the demands of external stakeholders. Though

external factors are uncertain and unexpected, leaders who understand the

constraints and influence of the organization’s dependence on external

entities will be able to incorporate strategies to mitigate the risk that these

factors can have for the organization. RDT indicates that there is power

gained through relationships; this power is fostered because one party can

convince another to do things that they would otherwise not do on their own

(Cuervo et al., 2019). According to the principles outlined in RDT, when

external influences, such as stakeholders, provide resources that affect the

operation of the organization, they can dictate the decisions that should be

made, resulting in conflicts (Liu et al., 2021). Resource dependence patterns

include resource diversity, resource dependency, and resource

competitiveness; these patterns influence the decisions, structure, and

function of an organization (Seo, 2020).

Nonprofit leaders do not have autonomy for decision making and

strategic planning; they are usually influenced by external supporters who

demand that specific actions are present to maintain their contributions to the

organization (Lu et al., 2020).

Although nonprofit leaders are not usually autonomous because they are

dependent on external resources (AbouAssi & Bies, 2018), dependence can

negate the internal functionality of the nonprofit organization. Dependence

must not dictate the selfregulatory practices that should be developed and

implemented based on the unique mission of each nonprofit organization

(Hung & Berrett, 2021). Leaders of nonprofit organizations have

implemented strategies that will allow them autonomy during the decision-

making process that mitigates the underlined external dependency that

dictates autonomy. Pfeffer and Salancik's (2003) RDT outlines that nonprofit

organizations should develop strategies aimed at mitigating the adverse risk

that dependence on external sources can have on a nonprofit organization.

Interlocking boards are a lucrative strategy that improves governance

practices, reduces the risk of external uncertainty, and optimizes the need for

resource demands (Bloch et al., 2020). The principles outlined in RDT have

been used by nonprofit leaders to influence donor behavior, shifting the

power to the organization through media influence (Luo et al., 2021). Power

dependence becomes evident when nonprofit leaders depend on

governmental resources that are donated or rewarded by government

agencies. Nonprofit leaders can incorporate politically focused activities that

will lower the risk of external power and increase autonomy for decision

making, reducing the negative risk of dependence (Sutton et al., 2021). The

principles of RDT focus on the relationship that organizations have with the

external environment through power dependency (Cuervo et al., 2019).

Pfeffer and Salancik (2003) recommended four major strategies to minimize

the adverse effects of organizational dependency.

The External Environment

Management experts have focused on the internal environment as a

priority for organizational sustainability; however, the authors of RDT

highlighted the intricate dynamics that even perceived self-sustainable

organizations will have in relationships with the external environment. The

perceived self-sustainable organization will have direct or indirect

relationships with the external environment (AbouAssi & Bies, 2018). The

external environment will consist of social components that are not related to

the internal environment of the organizational structure but have a direct

influence on the operations of the organization (Fang et al., 2021). The

employees, stakeholders, donors, board members, management, and

consumers are major social influencers of the organization (Amis et al.,

2020; Liu et al., 2021). Leaders of organizations need these subsets of the

social environment to thrive in all functional segments of the organization

for sustainability, function, and survival (Chang & Chen, 2019; Finley et al.,

2021). The authors of RDT support the rationale that the external

environment plays an integral role in the survival of any classification of the

organizational composition (Lacruz et al., 2019; Lu et al., 2020) and should

therefore be a central focus for leaders who are responsible for managerial

policies within the organization.

Dependence Reduction. The authors of RDT suggested four

strategies that organizations can implement to reduce the risk of external or

environmental dependence and power influence. Resource diversification,

interorganizational action, organizational growth action, and political action

are the four major strategies outlined by Pfeffer and Salancik (2003) that

have been used by organizations to reduce the external influence and power

that hinder the autonomy of nonprofit leaders.

1. Resource diversification has been one of the major strategies that

many nonprofit leaders have employed to mitigate external control

(Ilyas et al., 2020). Many organizational leaders have decided to

use varied financial instruments to ensure that working capital and

operational cash flow are available, providing autonomy to the

management of the organization, dependent on the availability of

donations (Seo, 2020).

2. Nonprofit leaders have focused on interorganizational actions

such as those pertaining to board composition, compliance,

accountability, and other governance practices, which satisfy the

demand for external power composition and provide the needed

resources for the sustainability of the organization (Bloch et al.,

2020; Kurland & Mercer, 2020; Rodríguez-Arias et al., 2021).

3. Organizational growth actions consist of generating income from

activities related to the mission of the organization, offering related

income-producing products and services, as well as expanding the

mission objective of the organization (Chang & Chen, 2019; Heger

et al., 2021).

4. Political action is a controversial concept that scholars have

studied but have been reluctant to recommend as a viable solution

for mitigating dependence within the organization (Su et al., 2021;

Zhou & Ye, 2021). However, political action has been used to

assist management representatives in controlling

power influences that can threaten the survival of the organization

(Sutton et al., 2021).

Resource diversification, interorganizational action, organizational

growth action, and political action have been extensively studied and have

been implemented by managers and leaders in varied, proliferated

mechanisms, through practical strategies to mitigate the adverse effects of

resource dependence. While the principles of RDT were chosen as the

conceptual framework for this study, several other theories are comparable

and support arguments outlined in Pfeffer and Salancik’s (2003) RDT.

Supporting theories such as the resource-based view (RBV) and institutional

theories outline elements related to RDT; however, they were not chosen

because several of the elements within the theory would not have adequately

supported the focus of this study. The key elements of the other theories that

are similar to or contrast with RDT are discussed and expounded to highlight

the rationale for choosing RDT as the conceptual framework for this study.

Theories Related to Resource Dependence Theory

The key components of the RBV take an inside-out approach to the

management of resources to improve competitive advantage (Penrose,

2009). Comparable to Penrose's

(2009) RBV theory, Pfeffer and Salancik’s (2003) RDT outlines the

interorganizational actions that can be employed by managers and leaders to

mitigate resource dependence to encourage competitive advantage and

sustainability (Bloch et al., 2020; Kurland & Mercer, 2020). Penrose (2009)

stated that RBV theory does not negate the influence of the external

environment. The focus outlined in RBV theory is primarily on the

importance and influence of the internal environment on an organization’s

resources. Consequently, the related factor is the application of the internal

environment as a subset of resource dependence and management policies

(Schmid & Baldermann, 2021).

Meyer and Rowan’s (1977) institutional theory emphasized the

relationship between the organization and the societal environment. The

authors explained that the decisions made by the organizational leadership

team are determined or influenced by an external power. Both the

institutional and resource dependence theories involve an assumption that

organizational choices are constrained by multiple external pressures and

allow researchers to explore the alternate decisions that leaders can make to

limit the power of the external environment on the organization’s ability to

be autonomous (Cricelli et al., 2021). External power is the major element

that differentiates institutional theory from RDT. The principles outlined in

institutional theory and RDT focus on the extent of the impact that each

external environmental influence could have on the organization’s survival.

However, Pfeffer and Salancik’s (2003) RDT indicates that the source of an

organization’s dependence resides in the need for resources, while Meyer

and Rowan’s (1977) institutional theory indicates that organizational leaders

are influenced by the behavioral norms of the external environment, which

influence leaders’ decision-making mechanisms.

Power, legitimacy, and governance are some of the fundamental

principles that surround Freeman’s (1984) stakeholder theory. Freudenreich

et al. (2020) explained that leaders have used the principles of stakeholder

theory to ensure that the organization’s relationship with the environment

aligns with mission accomplishment, value creation for each stakeholder

group, and sustainability. Leaders are responsible for ensuring that

governance practices are in place; however, there is a direct or indirect

power assertion that stakeholders demand that affects the specific practices

instituted (Jimenez et al.,

2021). Power relationship and governance considerations are extensive in

both Freeman’s (1984) stakeholder theory and Pfeffer and Salancik’s (2003)

RDT. While the principles outlined in stakeholder theory focus specifically

on the relationship with the stakeholder (Amis et al., 2020), through the lens

of environmental considerations, the principles of the stakeholder theory do

not emphasize the organization’s dependence on the external environment,

which is one of the central foci of RDT.

Contrasting Theories to Resource Dependence Theory

Some theories are similar to the RDT, which explores the relationship

between the organization and the external or internal environment. The

viewpoint of the theorist's argument is the determining factor that dictates

the central theme of the theory. Pfeffer and Salancik (2003) argued that

organizations depend on the environment for resources, which creates

aqueducts for power, authority, and dependence shifts. Meyer and Rowan

(1977) argued that leaders usually contend with a precarious relationship

with the external social environment for legitimacy, while Penrose (2009)

defended the autonomy of the internal environment on the power

relationship between the organization and resource management. However,

Ross (1973) presented a counter perspective to the problems that exist within

the organization, which provided a solution to the resource dependence,

power relationship composition, and interenvironmental dynamics of the

organization’s survival. While the elements of institutional and agency

theories expound on the internal and external environment, the theories lack

a direct focus on the adverse effects on the decisions that leaders make

because of the influence of elements within the organization’s internal and

external environment. The authors of agency theory discussed many of the

effects of the external environment on the organization.

Ross’s (1973) agency theory highlighted the common problems that

can exist within the relationship between the organization and agents,

presenting viable solutions. While the authors of RDT asserted that power

resides with the external environmental players, the authors of agency theory

argued that power resides with the organization (Cuervo et al., 2019).

Therefore, leaders should utilize their power to acknowledge the

fundamental contention that the relationship agreement cannot work without

input from the primary service provider (Chen, 2019). The relationship

dynamic works when the focus is not on the resource input, but on the

organizational agents that ensure that needed service will continue to meet

the demands of the principal (Lacruz et al., 2019). Power is a predominant

factor in the argument for an organization’s dependence; however, whether

the power dynamic exists internally or externally is the contrasting element

between the agency and RDT. Several of the theories that contrast with RDT

have only minor factors that separate the arguments. Consequently, the

decision to frame the conceptual framework of this study was based on the

mitigating factors outlined by the authors of RDT, which highlight many of

the elements of governance practices.

Governance Practices

Governance practices are integral to the sustainability of the organization.

Governance practices are the functions and processes that are implemented

within an organizational structure that facilitates accountability, equity,

responsiveness, compliance, transparency, and stability (Blouin et al., 2018;

Moggi et al., 2022; Shahid & Abbas, 2019). Governance practice encourages

resource efficiency as a standard for accountability and measure of

sustainability and compliance (Lu et al., 2020). While some scholars view

governance as a tactical standard, many describe governance as a restrictive

tool to meet the demands of stakeholders (Finley et al., 2021; Lacruz et al.,

2019). Governance practices have been identified as an effective mechanism

to mitigate risk factors that threaten the nonprofit sector’s sustainability

(Molk & Sokol, 2021). Nonprofit leaders have been criticized for not having

effective governance practices in place to mitigate the occurrences of

misappropriation of resources (McDonnell & Rutherford, 2019; Stötzer et

al., 2021). Governance practices have been the focus of studies. Researchers

have explored how established governance practices affect donor behavior,

or when the reverse exists (Adena et al., 2019; Farwell et al., 2019; Qu &

Daniel, 2021). Other scholars have expressed that governance practices have

been an area of concern for regulators because nonprofit leaders do not have

to comply with the same regulatory requirements imposed on the leadership

of for-profit organizations.

Though governance practices and compliance are linked, and the

terms are usually used interchangeably, there is a difference between the two

concepts. Governance practices are developed internally by senior

management and governing bodies within the organization, while

compliance policies are established primarily by external regulators (Abu

Khadra & Delen, 2020; Feng et al., 2019; Greitemeyer & Sagioglou, 2018;

Harris et al., 2015). Consequently, it is important to note that compliance is

an integral component of governance practices (Heffernan et al., 2018;

Plaisance, 2023). Each component of governance establishes a framework

for ethics, performance measures, mitigation of risk, and management of

operational mandates. Effective governance practices should voluntarily

inform stakeholders about the financial and operational results for the

organization, propagate ethical standards, manage responsiveness, maintain

independence, and provide opportunities for equity and inclusion.

Accountability and Transparency

Accountability and transparency are two elements of governance

practices that are integral to positive donor behavior. Nonprofit leaders

depend on external resources, in the form of financial donations to operate

(AbouAssi & Bies, 2018; Plaisance, 2023). Donors depend on nonprofit

leaders to manage the resources they have contributed to accomplishing the

mission for which the organization was established (Beaton et al., 2021; Hao

& Neely, 2019). Donors expect that the resources will be managed

effectively and have placed their trust in the leaders of the nonprofit to be

accountable for the resources that have been given to them (Alhidari et al.,

2018). Transparency and accountability have been two important factors that

relate to the level of resources that is contributed to a nonprofit organization

by donors (Lu et al., 2020). Ensuring that regulations and managerial

processes that reflect accountability and transparency are primary elements

for nonprofit leaders to implement to encourage donor engagement and

participation. The elements of accountability, when implemented can have a

positive effect on donor confidence.

Leaders that ensure that accountability standards are in place, will

promote positive values with the organizational structure. Accountability is,

therefore, the acceptance of an established standard that gives ownership to

one's action (Farwell et al.,

2019; Finley et al., 2021). Accountability, within the context of the nonprofit

organizational leadership process, is the management and use of the

resources donated. Donor confidence is positively influenced when

accountability standards are consistent, voluntary, and transparent (Stötzer et

al., 2021), which can result in increased donations (Shin et al., 2020).

Accountability standards such as humanitarian internal and external codes of

conduct, public disclosure of financial statements, registered third party

review, certification, and accreditation contribute to governance practices

within a nonprofit organization (Becker et al., 2020). Hatfield (2018)

reiterated that accountability also improves donor relationships, the quality of

management, and service standards. Because nonprofit leaders do not have

stringent governmental regulations like that of their forprofit counterparts,

there is a higher demand for the governance practice of accountability that

highlights how donated funds are being utilized towards mission

accomplishment. While accountability focuses on ownership and resource

management, transparency focuses on the disclosure of information related to

accountability.

Many donors appreciate transparency and rely on disclosed

information to make giving decisions. Transparency, in a business context, is

the willingness of the organization’s leadership to disclose vital information

that gives pertinent information about the operations and financial health of

the organization (Blouin et al., 2018).

Misappropriation and misrepresentation of financial reports declared by the

leadership of nonprofit organizations have led to declines in donation levels

and increased demand for transparency because of the negative perceptions

about the use of donor funds causing (Dang & Owens, 2020). Researchers

have concluded that transparency is one of the major contributors to a

donor’s willingness to contribute financial resources to a nonprofit

organization (Farwell et al., 2019; McDonnell & Rutherford, 2019; Zhou &

Ye, 2021). Donors demand transparency, many will be deterred from

supporting a nonprofit organization because there are no available financial

and operational disclosures (Rossi et al., 2020). Dougherty (2019) supports

the notion that transparency is integral to a nonprofit organization’s

governance practices; however, transparency on its own does not guarantee

increased donations. The key for nonprofit leaders is to ensure that they gain

an appreciation and understanding of the effect of disclosure on positive

donor behavior.

Donors will demand transparency to gain an understanding of the

organization’s mission, financial management, resource allocation, and

ensure that ethical standards are upheld within the organization.

Ethical Standards. The presence of ethical practices builds on the

accountability standards that are present within the nonprofit’s operations

and contributes to the governance structure and practices. Many

organizations have been established to provide oversight for nonprofits

providing an evaluation of ethical protocol as a part of the governance

practices instituted (Guillén & Borkowski, 2020). Ethical codes of practice

provide a framework for a positive organizational reputation that can

enhance donor confidence and engagement (Ghafran & Yasmin, 2020).

Donor engagement is achieved when a nonprofit organization, through

ethical standards, provides information relevant to strategic implementation,

therefore building relationships, donor trust, and influencing donor

confidence (Freudenreich et al., 2020). Also, the presence of ethical

standards contributes to integrity and transparency, which contributes to the

likelihood of donors providing monetary support when fundraising efforts

are conducted (Greitemeyer & Sagioglou, 2018). Furlotti and Mazza (2020)

explained that the presence of ethical standards, as a part of governance

practices mitigates the occurrences of leadership abuse of power. There have

been many questions surrounding the effectiveness of having ethical

standards within the governance practices and the effect on donor

confidence.

Ethical standards ensure that there are moral requirements during the

process of operations, controls, management practices, and other relevant

activities during business processes. Scholars have argued that the presence

of ethical standards, as a mitigating factor for misappropriations, partiality,

and immoral conduct, is one potent indication that the nonprofit organization

has made collaborative efforts to ensure compliance (Jones et al., 2019;

McDonnell & Rutherford, 2019; Stötzer et al., 2021). Heffernan et al. (2018)

argued that legal and other operational compliance does not guarantee that

ethical principles are engrained in the organization's governance practices.

Charity watchdogs, such as Charity Navigator and BB Wise Giving

Allowance are independent review organizations that provide potential

donors and stakeholders with pertinent information about ethical standards

and other governance practices that contribute to the decision to donate to a

nonprofit organization. While ethical standards can be vague throughout the

industry, many of the governance practices implemented by leaders of the

organization will contribute and fulfil the requirements of compliance

organization and the key stateholder responsiveness.

Responsiveness. The measurement of responsiveness and

receptiveness are components of governance practices. Responsiveness and

receptiveness are the actions of meeting the demands of a nonprofit’s

stakeholders reasonably and cooperatively (Deslatte et al., 2019). In the

studies I reviewed, responsiveness usually referred to the government’s

actions in meeting the needs of society or its clients (Harris et al., 2015; Luo

et al., 2021; Peng & Lu, 2021; Sutton et al., 2021). The main objective of a

nonprofit organization’s mission is to offer services that meet the needs of

the community it serves; therefore, the same standard that is expected of

government agencies must be implemented in the regulations of a nonprofit

organization (Carroll & Kachersky, 2019). Some of the ways that nonprofit

leaders can demonstrate responsiveness are (a) ensuring that the service

standards are relevant to meet the need of the community, (b) effectively

communicating or reporting relevant financial and operational information to

the public and stakeholders, and (c) empowering employees through

initiatives that promote equity, fairness, and inclusion (Coupet et al., 2020;

Klafke et al., 2021). Hao and Neely (2019) stated that participating in

responsiveness initiatives is a fundamental way that existing and potential

donors can directly understand how their contributions are being utilized

towards mission accomplishment. Wilkin et al. (2018) noted that

incorporating donor participation is another subset of responsiveness, as a

part of governance practices, which can ignite altruism and social

responsibility for the donor or stakeholder. Nonprofit board compositions are

not in favor of participative responsiveness because they believe that it

impedes operational independence and autonomy of leaders, which is

another integral component of governance practices (Kurland & Mercer,

2020; Rodríguez-Arias et al., 2021).

Independence. Nonprofit organizations are usually governed by a

board; each member of the board avoids being influenced by interests that

would conflict with the mission of the organization. Independence is a potent

element of governance practices that facilitates integrity, professionalism,

and due diligence. Independence has been a concern because of the power

composition of external contributors of resources that demand that activities

are skewed to benefit the member's interest and not that of the organization

(Guillén & Borkowski, 2020). Bloch et al. (2020) suggested that interlocking

board compositions are a viable alternative to not only maximize capacity

but can be an effective mechanism for mitigating dependence and

encouraging member independence. Kurland and Mercer (2020) supported

the argument that independence through board representation and oversight

is an essential element supporting effective governance practices because it

facilitates advocacy, accountability, and representation. Abu-Khadra (2020)

explained that though audit committees are not legally mandated for

nonprofit organizations, it is an effective complement within governance

practices to facilitate independent reviews and increase compliance when

reporting on the IRS Form 990. Conversely, Rodríguez-Arias et al. (2021)

argued that an independent board composition can pose a significant

challenge because the board member’s interests may not align with the

values and operational objectives of the nonprofit organization. Also,

independence, as a component of governance practice, can conflict with the

need to have elements of equity and inclusion.

Equity and Inclusion. Effective governance ensures that there are

equal opportunities for all members, internally and externally. Equity and

inclusion have been an extensive concept that is not exclusive to nonprofit

organizations but also affects industries, governmental regulations, legal

obligations, and cultural interactions. When an organization ensures that

equity and inclusion activities, regulations, and protocol are a part of the

governance practices for the organization, they inadvertently facilitate

confidence, engagement, and confidence for all associated with the

organization (Brimhall, 2019). Deslatte et al. (2019) explained that a

nonprofit whose leaders make equity and inclusion a compliant priority is

more likely to affect confidence within the donor pool and will encourage

continuous contributions through donations. Many nonprofit leaders have

encountered challenges with implementing equity and inclusion activities

and regulations within the organizations. Nonprofit leaders have identified a

lack of effective communication as the major contributor to the challenges

that arises when equity and inclusion protocols are suggested.

Communication is one major way that nonprofit leaders can begin the

process of equity and inclusion (Jardon & Martínez-Cobas, 2019). Equal

access is demonstrated when there is adequate and frequent dissemination of

information to stakeholders, employees, and the public (Ciortescu, 2020).

Inclusiveness is achieved when initiatives are incorporated into the

operational policies ensuring that there are practical elements that equate to

value and empowerment for all employees, volunteers, and stakeholders.

Another effective element that nonprofit leaders can implement is to ensure

that gender diversification is represented in the staff complement and board

composition. Lu and Herremans (2019) explained that gender diversification

will provide greater skillsets and knowledge which will facilitate higher-

quality decision making, adding value to the organization’s financial and

operational performance.

Donors

Nonprofit leaders rely on donors to provide resources to fulfill mission

accomplishment, and governance practices contribute to donor confidence

and the decision to give. Donors are individuals or entities who support the

mission of a charity or nonprofit organization through monetary and non-

monetary contributions (Alhidari et al., 2018; Kim et al., 2021). Individual

donors contribute to over 70% of the $466 billion of charitable

organizations, in the USA, revenue raised in 2020; and over $2 billion of

that amount has been spent on fundraising initiatives to appeal to potential

donors (Kamatham et al., 2021). The main source of revenue for nonprofit

organizations is donations, sourced from individual and organizational

donors; therefore, leaders are challenged to find innovative ways to fundraise

and maintain a donor base (Klafke et al., 2021). Extensive studies have been

conducted to ascertain the most effective ways to motivate, retain, and

increase donor confidence to ensure a steady flow of donations

(Kumar & Chakrabarti, 2021; López-Pérez & Ramirez-Zamudio, 2020; Luo

et al., 2021). Nonprofit leaders that understand why donors contribute to the

mission of the organization are in an advantageous position to ensure the

organization's sustainability and competitive advantage. There are many

elements that need to be considered to identify why donors contribute to one

nonprofit’s mission over another.

Have you ever wondered why people will voluntarily give their

money to an organization, or even the government? Individuals are

motivated to donate to organizations because they believe in the mission of

the organization (Farwell et al., 2019); others give because they feel morally

compelled (Goenka & van Osselaer, 2019); some give because it is the

social norm (López-Pérez & Ramirez-Zamudio, 2020); while others give as

a benefit to themselves (in the case of tax benefits). Researchers have

identified that increased competition for financial resources within the

nonprofit industry has caused leaders to find innovative ways to attract and

retain donors (Lacruz et al., 2019; Seo, 2020; Tsiros & Irmak, 2020). Some

of the innovative ways that nonprofit leaders have implemented included: (a)

specialized marketing campaigns, (b) providing multiple secure and trusted

methods for donating, (c) efficient donor engagement strategies, and (d)

recognition initiatives.

Why Donate? When donors or funders decide to give to a nonprofit’s

mission accomplishment, many will do it, with apprehension because there

are elements that compromise their confidence; however, other factors will

encourage donor confidence.

There have been studies that focus on the factors that can contribute to donor

confidence. Stötzer et al. (2021) postulated that one major factor that

contributes to donor confidence resides in the nonprofit’s leader’s ability to

voluntarily demonstrate accountability reporting and acquire industry

accreditation. Financial disclosures have a positive relationship with the

donor’s response to charitable giving (Rossi et al., 2020). Su et al. (2021)

added that strategic, political, altruistic, and self-interest are four factors that

have influenced a donor’s decision to contribute to a nonprofit’s mission and

can predict whether they will sustain or increase their donations to a

nonprofit’s mission accomplishment. Additionally, the decision to donate

money or time can be linked to the individual’s psychology; for example, in

an appeal for immediate help towards a cause that has personal connections

to the donor, the results will equate to that individual being compelled to

give to the cause. (Greitemeyer & Sagioglou, 2018; Song & Kim, 2020).

When organizational leaders decide to use an appeal for immediate help,

those appeals usually result in donors giving monetary contributions, while

those donors who have established a favorable attitude towards the nonprofit

will be more likely to give monetary resources instead of voluntary time or

other nonmonetary resources (Song & Kim, 2020). The decision to donate

money or time is psychologically influenced and can be fundamentally

different for each individual.

Psychological influences are a positive determinant of a donor’s

decision to contribute, also the donor’s value system is another powerful

influence; some of these values include security, tradition, conformity, self-

direction, benevolence, universalism, and power (Sneddon et al., 2020).

Emotions are another subset of the individual’s psychology that contributes

to a positive response to influence the decision to donate. Emotional

responses can be triggered through appeals made by nonprofit organizations

or personal experiences that propel a potential donor’s willingness to give

(Agyemang et al., 2019). Goenka and van Osselaer (2019) stated that

fundraising appeals can ignite emotions such as compassion, gratefulness,

and fairness, which will result in an individual’s willingness to donate.

Kamatham et al. (2021) stated that when leaders use marketing promotions

that evoke sentimental emotions, coupled with vibrant pictures, impactful

terminology, and a heartfelt story or internet appeals they are likely to result

in successful fundraising appeals resulting in increased donations. Zhang et

al. (2021) explained that consumer donation behavior is fueled by emotions

and mood; however, there are other non-emotional factors such as morality,

gender, and social norms that are contributors to a donor’s decision to

support a nonprofit’s mission accomplishment.

Other nonpsychological influences have contributed to the decision to

donate.

Organizational identification is an individual’s perceived connection

or loyalty to an organization's mission; when leaders take steps to strengthen

organizational identification it can result in increased donations and strong

member relationships (Fang et al., 2021). Peer identification influences

member retention and donations. Leaders of nonprofit organizations need to

capitalize on and be cognizant of how donor value alignment, organizational

identification, and peer identification can contribute to positive donor

behaviors (Ghafran & Yasmin, 2020). Fang et al. (2021) contended that

while member-nonprofit relationships are a strong influential factor in a

donor’s willingness to contribute to mission accomplishment, it can take a

longer period to realize donor contribution than organizational identification.

While organizational identification has a powerful impact in motivating

donors to give to a specific mission, there is another factor that can also

influence donor confidence and willingness. Carroll and Kachersky (2019)

identified perceived donation efficacy (PDE) as a viable option for charitable

giving; PDE is a donor’s belief that their giving has a positive impact on the

mission of the organization. Corporations and government entities contribute

to the donor pool and have made significant contributions to the mission of

the nonprofit organization.

The nonprofit-governmental relationship has been characterized as a

partnership because both entities’ objectives are centered around social

initiatives to meet the needs of society. Governmental agencies have

contributed over 65% of the total revenue of the largest nonprofit

organizations throughout the United States of America (Piatak & Pettijohn,

2021). Many nonprofit leaders have capitalized on donations from

government entities to ensure that a consistent funding stream is available to

the organization to remain viable and sustainable (Reckhow et al., 2020;

Sutton et al., 2021). The nonprofitgovernmental relationship has benefits and

challenges relating to resource dependency, governance practices,

stakeholder engagement, and other operational factors. When funding is

given by government agencies, there are usually restrictions that can pose

challenges to the operations and general mission accomplishment of the

nonprofit (Hung & Berrett, 2021). Governmental donors demand that legal

and state practices are represented in the governance practices implemented

within the organizational structure, (Lacruz et al., 2019), which can conflict

with the demands of other key stakeholders. Also, while governmental

funding to nonprofits provides a steady flow of income, delays in those

payments can cause nonprofits to have significant challenges that may result

in adverse financial, operational, and programmatic deficiencies (Peng & Lu,

2021). Nonprofit leaders will ensure that they comply with government

regulations, fulfilling governance practices, and identify the organization as

a viable candidate for donations.

There are several reasons that government agencies are willing to

support charities or nonprofit organizations. The major reasons that

government agencies will support the nonprofit mission are because they are

influenced by political motives, public pressure, and contributing to the well-

being of society. Governmental agencies may be motivated to contribute to

gain political advantages. Sutton et al. (2021) explained that organizations

use corporate political activities (CPA) to mitigate and control the

uncertainty surrounding the regulations that politicians can incorporate that

would affect the sustainability of an organization; however, many

researchers have identified this strategy as a balance of power in reducing

the adverse effects of resource dependence. Media and public scrutiny may

also motivate government agencies to donate to human interest groups and

social initiatives. Luo et al. (2021) investigated how the media influences the

donor behavior of the government in China. The authors explained that

governmental donor behavior is influenced when media coverage puts

pressure on the government to support nonprofit social initiatives using

media and public opinion. In this case, there is a powerful pendulum that

shifts in favor of public opinion where government agencies are pressured to

do what is in the interest of the public to donate funds to a worthy cause or

be criticized for not supporting the positive social impact being championed

by the leadership of the nonprofit organizations. Despite many of the

challenges that the nonprofit-governmental partnership or donor relationship

can pose, the benefit of having a large and consistent resource stream

outweighs the challenges.

Corporate donors are also an integral consideration for many nonprofit

organizations.

Large corporations and other for-profit organizations will donate to

nonprofit organizations to fulfill their corporate social responsibility.

Corporate social responsibility is a foundational element that has been

incorporated by many organizations where leaders consider what the

organization can do to give back to society while meeting the organization’s

stakeholder obligations and commitment (Agudelo et al., 2019; Zhou et al.,

2018). Also, corporations will donate to registered nonprofit and charitable

organizations to benefit from the tax benefits that can be ascertained.

Developing goodwill, gaining publicity for brand promotion and increased

customer support, and establishing an inclusive corporate culture are other

major reasons that corporations donate to charitable and nonprofit

organizations. Finley et al. (2021) explained that the support of corporate

donors has had a positive influence on the nonprofit’s performance because

corporations not only provide financial support for mission accomplishment,

but many of the corporate sponsors will offer support related to professional

expertise for the implementation of effective governance practices,

management policies, financial acumen, and operational best practices.

Attracting and Retaining Donors. Leaders have found innovative

ways to attract and retain donors because of heightened dependency and

increased competition for resources (Lacruz et al., 2019). Researchers

conduct studies that have focused on innovative strategies that nonprofit

leaders have implemented to give the organization a competitive edge in

attracting and retaining donors. The literature that was reviewed highlighted

innovative strategies that focused on specialized marketing campaigns,

technology that facilitates secure and trusted methods for donating,

ascertaining certification and compliance measures, and utilizing efficient

donor engagement. Goenka and van Osselaer (2019) explained that different

emotional appeals should be used in the marketing campaign to match the

objectives of the organization, also using specialized emotional appeals that

evoke emotions such as compassion, gratefulness, and fairness, are more

likely to encourage positive donor behavior resulting in increased donations.

Tsiros and Irmak (2020) investigated the benefits of setting donation frames

as a part of marketing campaigns that aimed to encourage support for

nonprofit or charitable organizations; the authors revealed that consumers

would be more likely to donate when there are the specified minimum and

maximum donation frames outlined in marketing campaigns. Logic theory

highlighting the social impact that the nonprofit’s service standards have

contributed to society is another innovative marketing strategy used by

nonprofit leaders. Klafke et al. (2021) explored 11 foundational elements of

the SD-Logic focusing on relationship service exchange as an effective

marketing campaign to encourage positive donor behavior.

Customer relationship management is a key element of a nonprofit

organization’s operational efficiency that can predict donor commitment

behavior. Schetgen et al.

(2021) said that nonprofit leaders can use social media data mining

platforms, such as Facebook, to predict the behavior of potential donors, and

can be an efficient and effective tool to attract and retain donors because the

data mining tools categories the age, education, location, interests, and

consumption behaviors. which are key predictors for identifying potential

donors. While many nonprofit leaders focus primarily on fundraising for

monetary contributions, consumer satisfaction surveys have revealed that

while individuals would be willing to give monetary contributions to the

mission, they also desire to use other means of adding value to the

organization and mission accomplishment. Faulkner and Romaniuk (2019)

explained that while monetary donations help to tangibly sustain the

organization, other support activities illustrate that the donor values the

mission of the organization and will be retained as a supporter. Also, those

donors would be committed to the nonprofit organization’s mission and will

continue to give not only time but money.

The reputation, financial efficiency, media visibility, and accreditation

status of a nonprofit organization are other factors that influence donor

retention and attraction

(Peng et al., 2019). Organizational reputation is defined as the organization’s

perceived integrity, usefulness, effect, and efficiency (Katz, 2018). If the

reputation of the organization is marred by negative media, it can negatively

affect the perception of a donor and result in decreased donor support, or a

loss of donations to the organization (Jones et al., 2019). The public image

or reputation of a nonprofit organization impacts fundraising efforts.

Conversely, a nonprofit’s organizational reputation can encourage trust from

supporters but does not guarantee donations; however, a good reputation is a

mitigating factor that positively influences donor behavior (Schultz et al.,

2019). The authors explained that though the organization’s reputation only

may not be the dominant predictive factor, reputation does contribute to an

individual’s cognitive perception resulting in value attachment. Value

attachment is a positive determinant of donor behavior, along with shared

social values between public agencies and nonprofit organizations improved

client orientation and transition, communication, and capacity building

(Coupet et al., 2020). A key element for building relationships is fostering a

culture of trust and transparency. Hutagaol-Martowidjojo (2019) explained

that building trust with key stakeholders, by gaining stakeholder

involvement, is the key to increasing donor contributions, retention, and

attracting potential donors. The authors suggested that some of the strategies

that can be used to gain trust and build donor relationships may include

gaining government involvement, continued and intentional communication

of the organization’s mission and vision to key partners, and maintaining

support from other firms and individual donors. Flexibility is another

mitigating element for attracting and retaining donors.

Many nonprofits do not offer donors the flexibility to express their

altruism in the way that they would prefer because the organizations usually

have one standard method for donations, which would hinder their

fundraising capacity. Kim et al. (2021) stated that understanding donor

behavior has the potential to strengthen the organization’s capability to

fundraise appropriately and benefit from donor participation over persuasive

efforts underlining a specific amount for donations. The authors suggested

that managers and leaders should focus their fundraising efforts on (a)

providing donors multiple options for giving, (b) promoting active

participation and not amounts for giving, (c) donors that have lapsed in

giving should be viewed as new prospects, and (d) optimize on seasons of

donation. Over the past 20 years, there have been increasing technological

advances that have changed the way donors can contribute to charitable

organizations, which can present other flexible options for contributing.

Digital fundraising is an effective tool for increasing the pool of potential

donors that would not have the opportunity to be introduced to the mission

of the nonprofit organization (Zhou & Ye, 2021). Technological options

have presented convenient options for donor giving; however, many donors

have been victims of fraud and cyber abuse. Farsya et al. (2020) stated that

many nonprofit organizations have implemented and provided access to

successful technology-based systems that have been used to influence a

donor's trust or distrust of online donations. The authors reported that the

convenience and advantages of donating online for both the donor and the

donor-recipient resulted in a trust-based relationship that fostered a greater

influence on the variable of positively influencing donations submitted

online.

Nonprofit organizations have invested time, money, and intangible

efforts to develop innovative strategies to promote their missions to attract

and retain donors. One such strategy is pricing promotions. There have been

several studies conducted where the authors have reported that there is a

positive relationship between fundraising efforts that promote pricing

promotions as an effective strategy for encouraging individuals to donate

(Jegers, 2019; Zhang et al., 2021). Higher promotion pricing incentives, such

as 10% or 50% off, can boost a consumer’s perception that they are saving

and will have more disposable revenue which can equate to the consumer’s

ability to donate. Many nonprofit organizations use direct mail appeal as

their primary marketing fundraising campaign efforts. These direct mail

fundraising campaigns usually include monetary and nonmonetary pre-

giving incentives (PGI). Yin et al. (2020) expounded on the return on

investment that direct mail marketing campaigns will deliver, also

addressing donor responses when monetary PGI versus nonmonetary PGI

are utilized for fundraising initiatives. Using PGI can be a worthwhile

fundraising campaign; however, factors such as the goal and objective of the

campaign should be fundamental consideration; if the donor perceives that

the campaign is in alignment with their goals then they are more likely to

give to the effort (Yin et al., 2020). Interestingly, the authors explained that

monetary PGI is likely to have a greater response rate than nonmonetary PGI

marketing campaigns. Charitable organizations conduct appeals for

fundraising initiatives. These appeals can be characterized as negative or

positive. Negative appeals would depict adverse consequences for an

individual not donating to a worthy cause, while positive appeals depict

good consequences that will occur when an individual donates to a cause.

Erlandsson et al. (2018) explained that negative appeals usually evoke

negative emotions such as guilt and empathy, which would motivate donor

giving, however, positive appeals tend to evoke positive emotions of

altruism and would result in a donor being willing to give more to the

organization, which would give a more favorable attitude towards the

individual’s willingness to donate. Paxton et al. (2020) agreed with the

sentiment that emotional appeals are effective in getting the attention of

potential donors, however, the authors have concluded that the use of both

negative and positive emotional appeals will have a positive effect on

donation levels. Donors are unique individuals, therefore, there is no way to

evaluate which method of emotional appeal will equate to positively

affecting the decision to donate.

Potential donors seek to find assurances that their funds will be

utilized for the purpose that it was given; donors depend on charity

evaluators to decide whether to give to one organization over another based

on the accreditation or certification seal (Hao & Neely, 2019). In the study

presented by Hao and Neely (2019), the authors explored the factors that

would influence a nonprofit organization to pay external evaluators to get a

seal that advertises their accreditation status. Nonprofit leaders that were the

focus of the study reported that they would be willing to pay the license fee

to have their certification status advertised because there were recognized

benefits of being certified, such as increased observability, fundraising

engagement, survival rate, and positive donor behavior. The fundamental

purpose of accreditation and certification of the nonprofit organization is to

protect the public and the stakeholders (Kurland & Mercer, 2020). Also,

certification or accreditation is a mechanism that provides a viable indication

to donors that the nonprofit leaders have implemented governance practices

that encourage accountability and will usually dictate positive donor

behavior (Feng et al., 2019). Consequently, nonprofit leaders have

acknowledged the benefits of seeking and getting accreditation; however, the

time, capacity, and cost of getting the accreditation may be the biggest

deterrent for many organizations not getting accreditation. Accreditation and

certification cannot guarantee increased donations or donor confidence

(Dougherty, 2019); however, the benefits that gaining accreditation and

certification brings to the organization outweigh some of the major

challenges that can be identified. Accreditation facilitates the identification

of organizational strengths and weaknesses of the operations, sharpens

operational deficiencies, and heightens donor confidence (Heffernan et al.,

2018). Another factor that potential donors are keen on is the perception of

how the funds that they have contributed will be used.

Online financial disclosures have a positive relationship with the

donor’s response to charitable giving (Rossi et al., 2020). If the financial

ratios reported are not favorable, it can influence the decision to donate,

when low overhead expenditures are reported, the organization received

higher donations than those that reported higher overhead expenditures (Qu

& Daniel, 2021). Donors and key stakeholders focus on the financial

performance of the organization as a fundamental determinant for

maintaining support, through donations, while others are keen on other

operational issues that are of personal interest (Jimenez et al., 2021). Donors

support the nonprofit’s mission and may not be aware of the administrative

costs that are associated with mission accomplishment, as such, those donors

may withdraw their support because the financial disclosure represents a

higher ratio of spending on administrative costs instead of direct mission-

related expenditures (Dang & Owens, 2020). While financial disclosures are

an integral element that influences donor confidence and impacts the

decision to donate, ensuring that the organization’s financial disclosures

represent a viable and compliant organization is the responsibility of the

leaders.

Strategies for Sustainability and Financial Viability

The main source of revenue or income for many nonprofit

organizations is donations, however, with the increased competition for

donors, there has been a need for leadership to find other viable strategies to

mitigate the resource dependency that exist within the structure of the

nonprofit industry. Many nonprofit organizations collect fees for products

and services offered (Heger et al., 2021; Johnson et al., 2020). It is important

to note that fees, referred to as earned income, contribute to approximately

56% of the total revenue for several classes of nonprofit organizations, such

as education and healthcare, within the industry in the United States of

America (National Council of Nonprofits, 2019). Researchers have specified

that the proportion of earned revenue, 56% of total revenue, is specific to

those nonprofits that have a larger market share, based on annual revenue

reported to the IRS, and would not apply to those nonprofits that are smaller.

Leaders of nonprofit organizations that report earned income from fees have

reported that there are still challenges that hinder revenue sustainability

(Johnson et al., 2020); stating that the major challenge was the volatility in

consumer demand for the goods and services (Faulkner & Romaniuk, 2019).

Revenue diversification has been another viable strategy that nonprofit

leaders can consider for mitigating the challenges of resource dependence.

Revenue diversification has been a viable strategy that nonprofit

leaders have used to minimize the adverse effects that low or decreasing

donations can have on the sustainability of the organization. Berrett and

Holliday (2018) asserted that revenue diversification can contribute to a

lessened state of operational uncertainty and dependence on external sources

for resources. Shon et al. (2019) endorsed the notion that revenue

diversification is a strategy that organizations have used to ensure that they

have ample resources to fund the expenditures arising from operational

activities. Leaders who consider revenue diversification are at an advantage

to ensure sustainability and will provide the organization with alternatives to

combat the adverse effects of resource dependence. Revenue diversification

can also ensure that there are enough income sources to cover administrative

and operational costs that would be unavailable because of the classification

of donor restricted funds.

The primary source of the funding that is received from donations can

be classified as restricted or unrestricted. Nonprofit leaders rely on funding

from several sources to fund administrative needs and other operational

expenditures. The primary source of funding usually comes from private and

corporate donations, governmental grants, service fees, and investment

income, most of which have been designated for use in the missions of the

organization and classified as restricted funds/income (Klafke et al., 2021;

Moreno-Albarracín et al., 2020). Other funds are designated as unrestricted

funds/income for use in the operational and administrative costs of the

organization. Unrestricted funds, though relevant to the operations of the

organization, can be highly scrutinized by donors because they view the use

of these funds to be indirectly related to the mission of the organization. It is

also likely that the allocated unrestricted funds are not adequate to cover the

operational and administrative costs. Shon et al. (2019) agreed with Pfeffer

and Salancik’s (1978) RDT explaining that the nonprofit leader’s

dependence on restrictive funds can result in the organization not having

adequate funding for sustainability. The authors suggested that if the

organization can implement strategies that will allow leaders to utilize

unrestricted funds in revenue diversification instruments, it may assure that

adequate funding will be available for allocations for operational,

administrative, and other organizational costs. Other sustainable strategies

that have been employed by many nonprofit organizations have been

summarised in the management and operational practices that are present

within the organizational structure.

Internationalization has been a strategy that many organizations use to

expand their revenue streams and promote the expansion of the

organization’s market share.

Internationalization has been found to increase an organization’s ability to

enhance social responsibility; however, it can also lessen the amount being

donated because the focus is for the organization to contribute to developing

countries and not to the local country. Liu et al. (2018) presented a study that

examined the relationship between internationalization and local donations

to organizations in China. Liu et al. used Pfeffer and Salancik’s RDT to

ground the study, explaining that organizations are not autonomous and will

be dependent on external resources for the sustainability of the organization,

the level of dependency depends on the organization's asset holdings and its

ability to conjure alternative funding. Liu et al. concluded that when

organizations expand internationally it is likely that they will depend more

on the international market for funding and would therefore lessen the

donations they would normally provide to the local economy. While

internationalization is a viable option to ensure financial viability and lessen

resource dependency, many nonprofit organizations may not have the

resources or experience to expand internationally; leaders have focused on

other alternatives to deal with the challenges that arise from resource

dependence.

Researchers have admonished nonprofit leaders to adapt the

management and operational practices, along with the organizational

structures that exist within for-profit organizations to enhance sustainability.

Suykens et al. (2019) outlined literature that supports the fact that nonprofits

should focus on mission accomplishment, creating opportunities to generate

income from non-traditional methods, enhancing governance, and improving

management practices. The authors proposed a hybrid approach to the

structure, focus, and operation of nonprofit organizations to increase

sustainability. Management practices inclusive of an effective business

model are essential, descriptive, communicative, and analytical tools to aid

in the strategic plan of the organization. The business model implemented by

a nonprofit organization should include value proposition, organizational

activities, organizational resources, mission, vision, donor relationships,

financial accountabilities, and partnership engagement strategies. Sanderse et

al. (2020) expounded on existing literature on business model strategies that

have been successful in enhancing sustainability and improving the financial

health of a nonprofit organization. Understanding the key components and

objectives of a business model will be beneficial to the sustainability and

effective management practices of a nonprofit organization.

Researchers have suggested that another viable sustainability strategy

is the use of economic or other performance models to help measure that

tracks the performance and use of financial resources, operational mandates,

governance practices implementation, and costing mechanisms (Jegers,

2019). Business models have been identified as one of the key tools in

describing the strategies that the business has used to remain sustainable,

consumer value propositions, and stakeholder engagement. Business models

are usually evident in for-profit organizations but are usually lacking in

nonprofit organizations. Nonprofit leaders should ensure that business

models are included in their strategic plans as a performance measure. Perić

et al. (2020) stated that instead of using community impact and mission

accomplishment as the major measurement tool, nonprofit organizations

should consider incorporating a viable business model as a part of the

established performance measurement tool. The authors identified several

characteristics of a business model that can be incorporated to identify

consumer value propositions, competitive advantage, and sustainability

strategies.

Strategic planning is an integral part of an organization's foundational

operations. Having a plan in place in case of uncertainties and unexpected

economic eventualities is a process that should be a part of strategic

initiatives. The COVID-19 pandemic has proven that many nonprofit

organizations were not adequately equipped to manage the adverse effects.

Rottkamp (2021) proposed a realignment of a nonprofit’s mission, vision,

and strategic planning initiatives, before adverse or changing economic

eventualities hit and disrupt the organizational structure and sustainability.

The author highlighted several steps that can be incorporated, including (a)

realigning programmatic strategies, (b) embracing technology, (c)

identifying new revenue streams, (d) partnering with other organizations,

and (e) embracing data analytics. These strategies are some integral tools

that nonprofits can incorporate as a part of their strategic planning initiatives.

Strategic planning is an integral part of the organization's survival, some

challenges can arise from changes made to enhance donor behavior and

encourage sustainability. HutagaolMartowidjojo (2019) stated that changes

in leadership, product and service offerings, and major policy changes can

create challenges with donor support and levels of contributions because

they may not agree with changes in the organization's strategic plan.

Literature Summary

Governance practices and the effects on donor behavior have

extensive literature that supports and explore varied segments of the topic.

Pfeffer and Salancik’s (1978) RDT has been explored in many of the studies

that focused on a nonprofit’s dependence on external support, relating to

donor behavior and governance practices, which makes it an appropriate

conceptual framework for exploring strategies that a nonprofit can use to

improve governance practice to increase donations. Literature that has

explained how an understanding of the elements that contribute to positive

donor behavior; specifically, why individuals and entities donate, and how to

attract and retain donors, have reported positive results in increased and

consistent donations (Faulkner & Romaniuk, 2019; Schetgen et al., 2021;

Zhou & Ye, 2021). The role and function of governance practices on

positive donor confidence have been another area that has been explored,

resulting in positive donor outcomes (Adena et al., 2019; Farwell et al.,

2019; Qu & Daniel, 2021). Consequently, a critique of both theoretical and

empirical literature has led to the conclusion that there are still unanswered

questions regarding the role of governance practices in encouraging donor

confidence, resulting in increased levels of donation.

Transition

In Section 1, I established the foundation of the study, expounded on

the background of the problem of how and why nonprofit leaders need to

improve governance processes and encourage donor confidence to increase

the levels of donations. I described the population and sampling techniques

that were utilized for this qualitative single case study. I introduced RDT,

which formed the conceptual framework and framed the answer to the

research question for this study. The comprehensive review of professional

and academic literature explored four major external environment elements

that contribute to dependence reduction within RDT. Related and contrasting

theories were explained, highlighting the major similarities and differences

for key elements of RDT. I illustrated how governance processes such as

accountability and transparency, ethical standards, responsiveness,

independence, equity and inclusion, affect donor behavior and confidence.

In Section 2, I explain the purpose of the study; provided detail of the

context of the study; described the role of the researcher; highlighted the

study’s participants; explained the research method and design; and

expounded on the plan used to collect, analyze, and validate the data used in

the study. In Section 3, I elaborate and expound on specific aspects of the

client organization through the lens of RDT, with a discussion of my

findings and recommendations.

Section 2: The Project

The literature review in Section 1 focused on relevant strategies that

nonprofit leaders have used to improve governance processes and encourage

donor confidence, to increase the levels of donations. In Section 2, I

recapitulate the purpose of the study, describe my role as the researcher,

highlight the study’s participants, explain the research method and design,

and expound on the plan used to collect, analyze, and validate the data used

in the study.

Purpose Statement

The purpose of this qualitative single case study was to explore

strategies that nonprofit leaders use to improve governance processes and

encourage donor confidence, to increase the levels of donations. The target

population consisted of four senior executive members of a donor–nonprofit

amalgamation nonprofit organization in the Midwestern United States, who

participated in semistructured interviews designed to gather the successful

strategies that the organization’s leaders had implemented to improve

governance processes and encourage donor confidence to increase the levels

of donations. The findings of this study have the potential to promote

efficiency within the nonprofit organization’s governance practices, which

can improve donor confidence, resulting in increased levels of donations and

stimulating positive social change in the region.

Role of the Researcher

The role of a researcher conducting a qualitative study is to maintain

the integrity of the collected and analyzed data, and impartially communicate

the conclusion of the study (Karagiozis, 2018; Saunders et al., 2016).

Researchers need to maintain confidentiality, remain unbiased, conduct

interviews following established protocols, and exhibit relevant competence

(Saunders et al., 2016; Yin, 2018). This study explored the successful

strategies that the leaders have implemented to improve governance

processes and encourage donor confidence to increase the levels of

donations. I believe that my experience as a vice president of finance for a

nonprofit organization has equipped me to execute my role as a researcher

effectively. I have had experience establishing governance practices and

donor relationships and interacting with external resource providers. These

experiences have given me a fundamental advantage in understanding

interview protocols, the importance of governance practices to donor

confidence, and the elements of resource dependence.

Researchers should uphold ethical principles while conducting

research. The Belmont Report was established to ensure that researchers

adhere to ethical principles and guidelines, considering the rights and

protection of the research participants. The Belmont Ethical Principles are

the foundations for the Common Rule (45 CFR 46); they comprise three

elements during the research process: respect for persons, beneficence, and

justice (National Commission for the Protection of Human Subjects of

Biomedical and Behavioral Research, 1979). I upheld ethical research

principles by ensuring that (a) each participant voluntarily signed a consent

form indicating their willingness to participate in the study; (b) the client

nonprofit leader signed the Walden Doctor of Business Administration

(DBA) Research Agreement, which outlined adequate information about the

scope, responsibility, and objectives of the study; and (c) the selection of

each participant complied with Institutional Review Board (IRB) guidelines,

which ensured respect, autonomy, consent, and equitability.

Research bias is a major challenge to ethical research compliance.

Bias can lead to errors in judgment and findings, and misinterpretation of

data (Karagiozis, 2018; Saunders et al., 2016). Researchers need to first be

aware of personal biases and then find effective strategies to avoid and

mitigate biases during the process. Establishing interview protocols,

evaluating acceptance of evidence that may be contrary to personal

assumptions or beliefs, and assessing the researcher’s objectivity are

effective strategies for reducing research biases (Shaw & Satalkar, 2018;

Yin, 2018). I employed member checking to manage research bias. The

member checking process dictates that the data collection interpretation is

verified by the participants. I ensured that data interpretation was sent to

each participant and confirmation of their interpretation was represented. I

identified my personal bias and ensured that my viewpoints were eliminated

during the data collection and analysis process, therefore attaining

objectivity and minimizing research bias.

I conducted semistructured interviews and developed questions that

aligned with the research question: What strategies do nonprofit leaders use

to improve governance processes and encourage donor confidence to

increase the levels of donations? Yin (2018) stated that structuring interview

protocols and interview questions that align with the focus and objectives of

a study are an effective strategy for mitigating researcher and participant

bias. The semistructured interviews that I conducted were done through

Zoom communication technology, whereby each interview was recorded,

and the transcripts were uploaded in a file. I ensured that each participant

was asked the same open-ended questions and that their responses were

member checked and verified. The process of using an interview protocol,

open-ended questions, and recordings satisfied effective strategies to

minimize researcher biases.

Participants

The participants of this qualitative single case study included four

senior executive members of a donor-amalgamation nonprofit organization,

in the Midwestern United States, who were experienced in successfully

implementing strategies that improved governance processes and encouraged

donor confidence to increase the levels of donations received. Walden

University’s consulting capstone program, in compliance with the Walden

IRB requirements, selected and assigned the client organization that is the

focus of this study. The selection process for each research participant

should include an evaluation of the individual’s knowledge and expertise

that aligns with the research’s focus (Allen et al., 2018; Yin, 2018). The

study participants had knowledge and expertise that allowed them to give

relevant information containing details of specific strategies that nonprofit

leaders use to improve governance processes and encourage donor

confidence, to increase the levels of donations. The four participating senior

executive leaders had facilitated and implemented governance processes, as

well as executed and managed donor engagement for my assigned client

organization. Each of the four executive leaders had been integral in

conducting fundraising initiatives and donor engagement projects, qualifying

them to give relevant information to answer the study’s research question

and explain additional strategies that had been employed to ensure that

governance practices were implemented to facilitate and encourage donor

confidence, to increase the levels of donations that had been received. Each

participant had more than 10 years of experience in a donor-amalgamated

nonprofit organization, which qualified them to provide information relevant

to the scope of the study.

The success of the client–consultant relationship is dependent on

building a positive relationship. After the selection process was completed,

the Walden University capstone administration sent an email to the client

organization with a professional profile bio along with an overview of the

Walden University consulting capstone program. I followed up on that

introductory email requesting a phone call to establish a communication plan

for all the participants and a review of the service order agreement, and other

program engagement details. Once the consulting relationship and research

agreement were established, there was weekly Zoom communication with

the client's executive director (ED), during which I facilitated discussions to

establish details for the service order agreement, foundational concepts for

building trust and respect, and direct question-and-answer sessions for

clarification relating to the scope, method, and design of the research study.

Research Method and Design

Research Method

The qualitative methodology was chosen for this study to explore the

strategies that have been used to improve governance processes and

encourage donor confidence to increase the levels of donations. Researchers

use the qualitative methodology to explore a phenomenon in a naturalistic

and social environment, focusing on answering the whys and hows of the

phenomenon, using nonnumerical data (Saunders et al., 2016). The

qualitative methodology, widely referred to as an investigative or

interpretive philosophy, allows the researcher to investigate and provide an

in-depth exploration of a social or naturalistic phenomenon (Chauhan &

Sehgal, 2022). The qualitative research methodology allows the researcher to

gather information from participants’ lived experiences relating to the focus

of the research topic; the researcher can identify themes ascertained from the

responses given and provide a subjective analysis of behavioral norms

(Mitchell & Rich, 2021).

A researcher can choose to use the qualitative, quantitative, or mixed

methods methodology for a study. A researcher using a quantitative

methodology will examine relationships among variables, using statistical or

numerical data (Marshall et al., 2022). Additionally, researchers may opt to

use the mixed method for a study, in which they use measurements and

analytical components of the qualitative and quantitative methodologies

(Saunders et al., 2016). Neither the quantitative method nor the mixed

method would have been appropriate for this study because the purpose of

the study did not include examining variables’ characteristics or

relationships or testing hypotheses for examining relationships. The

qualitative methodology was the most appropriate method because I

explored strategies that nonprofit leaders use to improve governance

practices to encourage confidence and increase levels of donations.

Research Design

Researchers utilizing a qualitative research design can employ a case

study, phenomenology, ethnography, or narrative design (Yin, 2018). I used

a single case study design for this study because I explored a business

problem within the context of a unique phenomenon for a particular

organization. Researchers use a case study design to develop and explore in-

depth data in a real-life setting (Saunders et al., 2016). Additionally, case

studies have been widely used by researchers for the specific purpose of

exploring in-depth knowledge on bounded subject matters relating to groups,

events, organizations, and a phenomenon with a real-world focus (Rashid et

al., 2019). Case studies can be used to explore one specific subject matter, or

there can be a multiplicious approach resulting in a comparative and

illuminative conclusion. There are several ways to explore real-life bounded

subject matters.

A phenomenological design is used to explore the commonalities of a

group’s experiences (Yin, 2018). The primary purpose of a

phenomenological design is to illuminate specific phenomena from the

perspective of individuals, eliminating the normative assumption, focusing

mainly on the individual’s subjective interpretation, and using a descriptive

and not exploratory approach to understanding a phenomenon

(Churchill, 2018). Conversely, an ethnographical design is used to explore a

group’s cultural narrative, as a representation of a larger group’s narrative

(Guha et al., 2021). Researchers conducting a study utilizing an

ethnographical design usually immerse themselves in the community of the

study participants to observe the research subject matter in a natural and

nonmanipulated environment (Bass & Milosevic, 2016). A narrative design

is used to interpret a personal story, or a biography of an individual

(Saunders et al., 2016). Researchers have used the narrative design to

explore the human experience in a texturally rich format, deducing a

conceptual narrative of the study’s focus (Mertova & Webster, 2019). The

purpose of this study was to explore a business problem within the context

of a unique phenomenon for a particular organization’s strategies that the

leaders used to improve governance practices to encourage confidence to

increase the levels of donations.

A phenomenological design would not have been appropriate because

it is used to explore a business problem through the lens of the participants’

lived experiences. An ethnographical design would not have been

appropriate because I did not explore a group's cultural commonalities. A

narrative design would not have been appropriate because I did not explore

an individual’s personal story. A single case study design was the design that

I chose. A single case study design was most appropriate for this study

because I identified and explored strategies that the participating nonprofit

organization leaders had used to implement governance to increase

donations.

Population and Sampling

The purposeful sampling technique, known as purposive and selective

sampling, was utilized for the selection of the target population for this

qualitative single case study (Saunders et al., 2016). I employed the

techniques of purposive sampling to identify and select the four senior

executive members of the donor-amalgamation nonprofit organization in the

Midwestern United States. The four senior executive leaders had the

characteristics and expertise to successfully implement strategies that

improved governance processes and encouraged donor confidence to

increase the levels of donations. Purposive sampling is intentional selection

of participants who possess qualities, knowledge, and experience that will

add value to the data (Campbell et al., 2020). Etikan et al. (2016) explained

that purposive sampling can be conducted heterogeneously, homogeneously,

typically, critically, totally, and expertly.

Utilizing the heterogeneous method of purposive sampling, I selected

senior executive leaders who possessed the acumen to provide

comprehensive data relevant to governance practices, donor relations, and

other strategies relating to the focus of this study (Etikan et al., 2016). The

ED of the client organization provided a list of the senior leaders who would

participate in semistructured interviews geared toward ascertaining

information about the organization’s successful strategies that the leaders

had implemented to improve governance processes and encourage donor

confidence and increase the levels of donations received. In addition to the

ED, I contacted the senior executives responsible for operations and donor

relations, along with the chairman of the board of directors, to confirm their

willingness to participate in the research study and to outline the details of

the semistructured interviews that would be conducted with each of the four

senior executive leaders.

Semistructured interviews were conducted as specified in the service

order agreement, utilizing the outlined research interview questions. I

conducted individual interviews using Zoom video conferencing technology.

The Zoom video conferencing technology, though a virtual tool, facilitated

an “in-person” atmosphere during the interview process. I was able to see the

participants and identify nonverbal cues that would facilitate gathering the

information needed to answer the research question: What strategies do

nonprofit leaders use to improve governance processes and encourage donor

confidence to increase the levels of donations? Additionally, using the Zoom

conferencing video technology, I employed the established interview

protocol (see Appendix) and fulfilled the Belmont Ethical Principles of

respect for persons, beneficence, and justice (National Commission for the

Protection of Human Subjects of Biomedical and Behavioral Research,

1979). I asked each of the four executive leaders the same research questions

for the study and respectfully exchanged cordial conversations. I allowed

each participant the time they needed to adequately answer the interview

questions and asked follow-up questions to ensure that adequate data were

collected. I activated the transcription feature of the Zoom video

conferencing technology for each interview that was conducted; the

transcription feature ensured that each interview session was recorded

verbatim. After the interview process was completed, I accessed both the

video recording and the transcription data file. I saved each file to the

designated folders on my computer and labeled each P1, P2, P3, and P4; I

held subsequent discussions with each participant for interpretive

verification and accuracy confirmation.

To help ensure data saturation for this study, I collected data from the

four senior executive leaders during the interview process and applied the

member checking technique. Data saturation in a qualitative study is used as

an essential criterion to determine when data collected by the researcher can

be ceased (Saunders et al., 2018). Daher (2023) explained that the quality

and content validity of a study is negatively impacted if data saturation is not

attained. Candela (2019) explained that the member checking technique is

widely used to ascertain data saturation by authenticating the data and

confirming accuracy in interpretation. I ensured that the details for the

member checking technique were achieved, thereby establishing data

saturation.

Ethical Research

Ethical research is guided by norms and standards of conduct that

consider the rights and obligations of the participants and the behavior of the

researcher (Burles & Bally, 2018). The major components of ethical research

are the informed consent of the participants and the ethical responsibility of

the researcher (Saunders et al., 2016). Informed consent is attained when the

research provides the participants with full information regarding their rights

and choices, inclusive of an opportunity for questions, leading to knowledge

and understanding of the participant’s role, along with the purpose and

objective of the study (Yin, 2018). Ethical responsibility facilitates values

that encourage collaborative work, privacy and confidentiality, protection of

vulnerable groups, equitability, deception avoidance, and compliance with

ethical and legal standards (Guillén & Borkowski, 2020). Ethical review and

compliance are achieved when research ethics committees are established

and functional at all stages of the research process.

Walden University has an IRB that is responsible for reviewing each

DBA student’s ethical responsibility at each stage of the study’s process.

The Walden University IRB requires that all scholar-consultants

participating in the consulting capstone receive IRB approval before

collecting data from the client organization that is the focus of the study

(Walden University, 2021). Walden University’s IRB has an established

procedure for the selection and partnership of client organizations, which

includes a DBA Research Agreement (Walden University, 2021). The DBA

Research Agreement outlines mutual promises and covenants for (1)

confidentiality and compliance, (2) ethical conduct for the consulting

relationship, (3) termination of the agreement, (4) scholar-consultant ethical

responsibilities, and (5) mutual responsibilities (FERPA – Family

Educational Rights and Privacy Act of 1974 and HIPAA – Health

Insurance Portability and Accountability Act of 1996). I attained IRB

approval (Approval # 06-09-21-1012245), along with the participants'

informed consent before data collection began.

The DBA Research Agreement was established before my partnership

with the client organization began. Once the Walden University DBA

consulting capstone administrators facilitated introductions, I ensured that a

consent form and service order agreement were sent to the four senior

executive leaders of the client organization, and that consent was received

from each participant before data collection began. The consent form and

service order agreement outline details of the scope and purpose of the study,

the voluntary nature of the study, the terms of confidentiality and

compliance, and the ethical responsibility of the consulting relationship. I

contacted each of the four participants of the study after I received IRB

approval, and the initial introduction was completed. During the phone calls

with each of the senior executive leaders of the client organization, I

discussed the scope and purpose of the study. I explained the process and

importance of attaining consent from each of the participants, and the

decision to participate in the study. The right of the participant to withdraw,

ethical protections, data security, and voluntary participation are some of the

elements within the rights and protection of the participants for the research

study (Burles & Bally, 2018). I also explained to each of the four senior

executive leaders, the right to withdraw from participation in the study at

any time without fear or intimidation. I explained to each of the four senior

executive leaders that they would not be compensated for their participation

in the study. The rights and protection of research participants are essential

elements of ethical research guidelines. The participants were provided with

the consent forms and the service order agreement for which they returned

approval via email confirmation. Also, a discussion was conducted with each

participant via Zoom communications, which facilitated open discussions on

the details and procedures for each element of the participant's rights and

protection. The IRB approval by-laws that outlined the appropriate data

collection procedure, surrounding the confidentiality and security of data

were upheld. The participants were not compensated nor were there any

other incentives provided for contributing to this study. The client

organization was assigned the pseudonym, “DARC,” in compliance with

ethical protections, and the labels P1, P2, P3, and P4 were given to each of

the four senior executive leaders. Additionally, the data security that I have

employed will facilitate safe storage for at least 5 years following the

publication of this study, a redaction of identifying information, and data

disposal procedures after the 5-year holding period.

Data Collection Instruments

In a qualitative research study, the researcher is the primary data collection

instrument. I was the primary collection instrument for this qualitative

research. Primary data collected by the researcher for a specific purpose

consists of observation, interviews, and documentation analysis (Yin, 2018).

In this qualitative single case study, I used semistructured interviews as the

primary data collection technique and internal archival records/documents

and public data reports as the secondary data collection technique to explore

the strategies that the senior executive leaders have used to improve

governance processes and encourage donor confidence, to increase the

levels of donations. The interview protocol (see Appendix) was used for

each of the four participants during the interview process, where each of the

interview questions contributed to answering the research question: What

strategies do nonprofit leaders use to improve governance processes and

encourage donor confidence to increase the levels of donations?

Semistructured interviews require flexibility, rationale, and

facilitation. DeJonckheere and Vaughn (2019) explained that semistructured

interviews are used to facilitate dialogue between the researcher and

participants to focus on the purpose and scope of the study, comply with

ethical standards, and adhere to interview protocols. During the interview

process, I used an established interview protocol (see Appendix) and asked

the participants six interview questions related to the study’s research focus,

the central research question, and the conceptual framework. Researchers

have used interview protocols to ensure consistency and alignment with the

research questions (Yeong et al., 2018). While semistructured interviews are

the primary data collection technique for a qualitative study, the researcher

will use other data collection techniques to validate the findings of the study.

I used internal archival records/documents and public data reports as

sources of additional data and information. Secondary data in a qualitative

study enhances understanding and interpretation, revealing valuable

information relevant to the scope of the study (Corti, 2022). The secondary

data collected supported the validation of the interview information on

strategies that nonprofit leaders have used to improve governance practices

for encouraging confidence to increase the levels of donations. Reliability

and validity are essential during the data collection process and the quality of

the research study. Researchers have used member checking, or participant

feedback regarding the data interpretation, to enhance the trustworthiness

and validity of the study’s findings (Motulsky, 2021; Zairul, 2021). After

each interview, I reviewed the transcripts against the recorded sessions, then

for member checking purposes, I sent the analysis was sent to each

participant to verify that I had captured and interpreted their responses

accurately.

Data Collection Technique

Interviews are a major and primary component of data collection for a

single case study research design (Yin, 2018). A qualitative research single

case study research design’s main objective is to investigate in-depth real-

life inquiry, through multiple data collection techniques, using triangulation

to explore a research question (Stake, 1995; Tomaszewski et al., 2020; Yin,

2018). In this qualitative single case study, I used semistructured interviews,

utilizing an established interview protocol (see Appendix) for each of the

four participants during the interview process, where each of the interview

questions contributed to answering the research question: What strategies do

nonprofit leaders use to improve governance processes and encourage donor

confidence to increase the levels of donations? I collected internal archival

records/documents, and public data reports from the ED of the client

organization and ensured that member checking procedures satisfied the

criteria for exploring the strategies that the senior executive leaders have

used to improve governance processes and encourage donor confidence to

increase the levels of donations.

Documentation, archival records, interviews, direct observations,

participant observation, and artifacts are the six main sources of data

collection for a qualitative case study. Yin (2018) explained that using

multiple sources of evidence, creating a database of data collection,

maintaining a chain of evidence, and exercising care are the four key

principles that govern data collection; these principles will enhance,

encapsulate, and boost the quality of the research study. In the application of

multiple sources of evidence, I conducted semistructured interviews with

four senior executive leaders and reviewed documentation and archival

records, enhancing stronger, contextually valid findings, over that of a study

that only utilized one source of evidence. I created a database that included

the raw, unfiltered, or unanalyzed data collected, providing evidence to

support the study’s research question. The chain of evidence spanned from

the establishment of the research question to confirmed agreements for data

collection and storage and the developed strategy for monitoring the time

spent on data collection, through to information verification.

Member checking technique is widely used to ascertain data saturation

by authenticating the data and confirming accuracy in interpretation, also

enhancing the trustworthiness and validity of the study’s findings (Candela,

2019; Motulsky, 2021; Zairul, 2021). To ensure data saturation for this

study, I collected data from the four senior executive leaders during the

interview process and applied the member checking technique.

Documentation and other secondary data sources enhance the understanding

and interpretation, revealing valuable information relevant to the scope of

the study (Corti, 2022), which is convenient for minimizing the resources

allocation needed; however secondary data sources do not allow for

autonomy and information focus, therefore leaving room for reliability and

validity concerns (Weston et al., 2019).

Data Organization Techniques

Data organization in research is important for ethical consideration,

analysis, and resource efficiency. In this study, I ensured that all documents

were named and organized using the Microsoft OneNote software. Files

were named and categorized according to the specific area of emphasis. I

created and named each folder using the Baldrige Performance Excellence

Framework (Baldrige Performance Excellence Program, 2023) categories of

leadership; strategy; customers; workforce; operations; measurement,

analysis, knowledge management; and results. Qualitative data provides rich

content and can be overwhelming; utilizing codes and themes are effective

ways to organize data for analysis and interpretation (Yin, 2018). I filed the

collected data in the respective category folders.

I exported interview transcripts from the Zoom communications

technology and saved transcripts in folders in the Microsoft OneNote

interviews files representing each participant with pseudonym subfolders P1,

P2, P3, and P4. Maintaining ethical research standards, I ensured the

secondary data collected was limited to the relevance and scope of the

research study. I used a Microsoft Word file as a reflective journal to

identify thematic codes, and note my observations during the interview

process, which were then analyzed to manage and identify emerging biases,

and for ease of reference and organization of themes for coding. Shaw and

Satalkar (2018) explained that while research integrity is paramount,

objectivity through documentation and coding is integral for reducing or

managing research biases that can arise during the data collection and

analysis process. The Walden University IRB requires that research data be

securely stored and saved for 5 years. All data collected will be stored in a

secure external digital drive that will be locked in a safety box in my home

office for 5 years, then after the 5year tenure, the external drive and all other

study-related data will be destroyed.

Data Analysis

Data analysis is an essential process in a qualitative case study.

Researchers collect data, then analyze and interpret the data to reflect the

phenomena through the lens of the participant, incorporate theory and

identify themes, and report findings (Miles et al., 2018; Saunders et al.,

2016). The researcher organizes and sorts the raw data in a method that leads

to findings that are measurable and quantifiable for qualitative research data

collection that is nonnumeric, textual data, often subjective with rich

contextual volumes. Due to the nonstatistical characteristics of the case

study research design, it would require analytical, interpretive, and critical

skills that may be underdeveloped by the researcher (Yin, 2018). Saunders et

al. (2016) suggested several data analysis methods, such as thematic,

template, explanation building and testing, grounded theory, narrative,

discourse, and content analysis, which can be used to interpret data collected

in a qualitative study. There are several computer-assisted qualitative data

analysis software (CAQDAS) tools that organize and analyze data using

codes; however, the inputs and outputs of CAQDAS tools still require

human analysis (Yin, 2018).

The data analysis process that I employed to explore the strategies that

nonprofit leaders have used to improve governance practices to increase

donations is methodological triangulation, in which data coding and themes

were applied to the data collected. I recorded the semistructured interviews

and created transcripts through Zoom communications technology. I

downloaded the files created through Zoom communications technology,

reviewed the files against the audio and visual files, and prepared a summary

of the data. I then sent the data summary to each participant for verification

according to member checking and data validation criteria (Candela, 2019;

Motulsky, 2021; Zairul, 2021). Effective data analysis is achieved when data

saturation, reliability, and validity are evident. Miles et al. (2018) argued that

methodological triangulation is an effective measurement tool for a

qualitative study’s data analysis.

Methodological triangulation provides comprehensive, multiple

source data, which will enhance validity, and establish themes during the

data analysis process. With the data that were collected and analyzed, I

sought to answer and align the data with the research question: What

strategies do nonprofit leaders use to improve governance processes and

encourage donor confidence to increase the levels of donations? I identified

themes, codes, and patterns related to the research question. Yin’s (2018)

fivestep analytic techniques were the primary qualitative analysis tool

utilized to address this study’s research question. Yin’s (2018) five analytic

techniques include (1) compiling the data, (2) disassembling the data, (3)

reassembling the data, (4) interpreting the meaning

of the data, and (5) concluding the data. I coupled Yin’s (2018) five-step

data analytical technique with the NVivo, a CAQDAS, to interpret the

findings from the data analysis.

Reliability and Validity

Reliability and validity are the two elements that are the cornerstones

that authenticate the quality of a qualitative research study (Korstjensa &

Moser, 2018; Yin, 2018). Because reliability and validity are critical to the

credibility of the research study, it is paramount that logical tests are

conducted throughout the data collection and analysis process. Yin (2018)

explained that credibility, dependability, confirmability, and transferability

are the elements that should be present within the qualitative research study

to enhance reliability and validity. Some of the strategies that the researcher

should employ include (1) using multiple sources of data, (2) establishing a

chain of evidence, (3) ascertaining peer reviews, (4) conducting pattern

matching; (5) using consistency protocols; (6) developing a database, and (7)

maintaining the research design protocol to satisfy reliability and validity

(Hayashi et al., 2019).

Reliability

Reliability is satisfied when consistency is evident throughout the data

collection and analysis process (Korstjensa & Moser, 2018). I achieved

reliability in this qualitative study by using the same interview protocol with

the four participants. I conducted all interviews using the Zoom

communications technology; I exported transcripts and recordings for secure

retention. Member checking supports trustworthiness and creditability and

enhances reliability. I confirmed each summary's interview analysis with the

participant to authenticate accuracy and credibility. In addition, I used

methodological triangulation to help ensure that there were multiple data

sources, such as internal board minutes, incorporation documentation, and

data obtained from GuideStar to endorse the reliability of the study’s scope

and objectives (Miles et al., 2018).

Validity

Validity is the measurement of the appropriateness of the instruments

used (Saunders et al., 2016). When validity is violated, a research study loses

the quality criteria; therefore, validity needs to be satisfied because the

appropriate interpretation of analyzed data is paramount to fulfilling the

purpose of a research study (Sürücü & Maslakçi, 2020). Validity is

measured by the researcher’s ability to represent data credibility,

transferability, dependability, and confirmability. Data saturation is another

determinant in support of the study’s validity. I achieved validity in this

qualitative study by ensuring that the participant’s viewpoints were

accurately captured during the interview process. I recorded and retrieved

verbatim transcripts from the Zoom communications technology, then I

emailed a summary analysis of the interviews to each participant requesting

confirmation that the interpretation was accurately captured, therefore

fulfilling member checking criteria (Candela, 2019). Also, I collected data

from internal documentation, and public reports, thus fulfilling

methodological triangulation (Abdalla et al., 2018).

Credibility. Credibility is the representation or interpretation of data

from the participant’s perspective or viewpoint. Credibility is assured when

member checking and methodological triangulation are applied throughout

the data analysis process (Liao & Hitchock, 2018). I ensured that member

checking and methodological triangulation techniques were applied during

the data analysis process.

Transferability. Transferability is the degree to which the findings of

the study can be transferred or applied to other groups (Korstjensa & Moser,

2018; Maxwell, 2021). Transferability is achieved when the researcher has

thoroughly stated the nature of the study, assumptions, objectives, and the

findings of the study, through the lens of the participant. The researcher does

not determine whether the study is transferable. Transferability is determined

by the user of the study’s findings (Zhu et al., 2023). My study’s findings

may be transferable to other organizations if they determine that the

conclusions outlined are relevant.

Confirmability. Confirmability focuses on neutrality, where other

researchers would be able to confirm the researcher’s interpretations and

findings from the data presented (Nassaji, 2020). When a researcher uses

data collection and analysis tools such as methodological triangulation, they

can satisfy confirmability. Abdalla et al. (2018) likened confirmability to the

practice of establishing an audit trail where all transactions can be traced

back to raw data collection, confirmation, and authorization. I used member

checking and methodological triangulation as strategies to achieve

confirmability.

Data Saturation. Data saturation is data redundancy or the point

where no added information or themes are attained from the data (Braun &

Clarke, 2021; Saunders et al., 2018). Candela (2019) explained that the

member checking technique is widely used to ascertain data saturation by

authenticating the data and confirming accuracy in interpretation. To ensure

data saturation for this study, I collected data from the four senior executive

leaders during the interview process and applied the member checking

technique. I ensured that the details for the member checking technique were

achieved, therefore establishing data saturation, where data redundancy was

evident from the data analyzed.

Transition and Summary

In Section 2, I recapitulated the purpose of the study, providing detail

of the context of the study, describing the role of the researcher, highlighting

the study’s participants, explaining the research method and design, and

expounding on the plan used to collect, analyze, validate, and satisfy

reliability of the data used in the study. In Section 3, I will detail the specific

aspects of the client organization through the lens of RDT, with a discussion

of my findings and recommendations.

Section 3: Organizational Profile

DARC is the pseudonym I used to refer to the client organization in

this study. DARC was incorporated in 1946 with the main objective of being

a consumer advocate, protecting the interest of donors in the Midwestern

United States. Over the next 70 years, the organization evolved from having

a singular focus on donor advocacy by coupling that important role with the

role of serving as an independent resource for facilitating an environment

that fosters the improvement and strengthening of the donor–nonprofit

relationship. DARC provides tools and resources that educate and equip

charities on governance, regulatory, and accountability standards, also

providing donors with informed and relevant information that aids in

encouraging donor confidence. DARC was incorporated as a charitable

organization, offering education-related services, adhering to

Section 501(c)(3) of the U.S. Internal Revenue Code of 1986.

The board of directors (BOD) is the governing body that is responsible

for establishing, managing, and achieving the mission, vision, and objectives

of DARC. The BOD is also the governing body that ensures that effective

governance practices are in place to contribute to public confidence and

organizational sustainability. DARC’s BOD bylaws outlined that the BOD

should comprise at least 10 members, but no more than 17 members.

Currently, DARC’s BOD comprises 10 board members, a chairperson, past

chairperson, vice chairperson, secretary, treasurer, and other members who

have the required skills and expertise that will aid in achieving DARC’s

organizational goals.

DARC has a team of staff members, consultants, and contractors, who

support the mission, vision, and objectives of the organization. DARC has

three staff members, the ED, a project manager, and a donor and nonprofit

relations coordinator. The ED is appointed by the BOD and is a member of

the governing board, reporting crucial operational accountabilities to the

chairperson of the BOD. The other two staff members report directly to the

ED. The three staff members are supported by a 12-member team of

consultants and contractors, consisting of nonprofit services associates;

financial advisors; an attorney; a diversity, equity, and inclusion (DEI)

partner; strategic planning; communications and development; accounting;

writing; human resources; and graphic design consultants.

DARC has a primary goal of fostering strong foundational donor–

nonprofit relationships and building transformative philanthropy through

effective governance practices that will encourage donor confidence. The

purpose of this qualitative single case study was to explore strategies that

nonprofit leaders use to improve governance processes and encourage donor

confidence to increase the levels of donations. DARC senior leaders have

delivered on the organization's mission by offering key programs that

improve governance practices for nonprofits, provide services that foster

donor confidence, and increase the levels of donations. Details of the

organization, leadership, and results are expounded.

Key Factors Worksheet

Organizational Description

DARC was incorporated as a charitable organization offering

education-related services, adhering to Section 501(c)(3) of the U.S. Internal

Revenue Code of 1986. DARC’s 70 years of building the donor–nonprofit

relationship have evolved into a catalyst of products and programs that

encourage strong, inclusive, accountable, and vibrant communities within

the Midwestern United States. DARC’s mission and business prepositioning

evolved from having a singular focus on donor advocacy by coupling that

important role with the role of serving as an independent resource for

facilitating an environment that fosters the improvement and strengthening

of the donor–nonprofit relationship.

Organizational Environment

Product Offerings. DARC provides three main programs or services:

(a) donor– nonprofit relationship amalgamation, (b) general donor services,

and (c) general nonprofit services. The goals of each program align with

DARC’s mission, vision, and values. For each of DARC’s three programs,

clients can choose one or more of the products that will provide the

following information for regulatory compliance; tools and resources that

encourage donor–nonprofit engagement; and online capacity-building tools

for sustainability, compliance, and effective governance.

Mission, Vision, and Values. DARC leadership’s focus is on

serving. DARC advocates for the interest of donors and serves as an

independent resource for cultivating an environment that fosters the

improvement and strengthening of the donor–nonprofit relationship, which

is the foundational core factor that embodies the mission, vision, and values

of the organization. DARC leaders are committed to empowering donors in

making informed giving decisions and educating nonprofits on

accountability standards to encourage trustworthiness. DARC senior leaders

are committed to ensuring that donors in the Midwestern United States have

the appropriate information to make effective giving decisions, which will

help build stronger donor–nonprofit relationships, improving vibrant and

inclusive communities.

Workforce Profile. The DARC workforce, at the time of the study,

consisted of a BOD and a team of staff members, consultants, and

contractors. DARC has four staff members: the ED, a project manager, a

program services specialist, and a donor and nonprofit relations coordinator.

The ED is appointed by the BOD, while the other three staff members report

directly to the ED. There is a 12-member team of consultants and

contractors, consisting of nonprofit services associates; financial advisors; an

attorney; a DEI partner; strategic planning; communications and

development; accounting; writing; human resources; and graphic design

consultants, which supports the three-member staff team.

The BOD has bylaws that govern composition, terms of tenure,

frequency and structure of meetings, and the roles and functions of each

member. DARC’s BOD can have between 10 and 17 members. DARC’s

current BOD has 10 members. Each BOD member should have expertise,

skills, and commitment that align with the mission of

DARC. Currently, DARC’s BOD comprises 10 board members, a

chairperson, past chairperson, vice chairperson, secretary, treasurer, and

other members who have the required skills and expertise that will aid in

achieving DARC’s organizational goals. The current chair is a director of a

charitable organization and is responsible for community partnerships and

charitable giving. The chair has over 20 years of experience in community

engagement initiatives as well as a dual master’s degree in social work and

business administration, with a fiery passion for community and nonprofit

sustainability and positive social impact. The other members of the BOD

have similar academic accolades, social passions, and professional expertise.

Each member of the BOD has a vested interest in ensuring that DARC’s

mission is accomplished.

DARC’s ED is appointed by and reports directly to the BOD. The ED

is the responsible officer of the organization, with direct responsibility for

the day-to-day operations of DARC, inclusive of hiring, supervision and

oversight, and financial accountability. The ED has a Bachelor of Arts (BA)

in sociology and anthropology and has served in various industries, carrying

out responsibilities in philanthropy, human resources, and finance. The ED’s

passion and commitment are evident through participating in continued

community enrichment campaigns, serving on other nonprofit boards, and

being recognized through corporate community nominations. The program

manager and donor and nonprofit relations coordinator report directly to the

ED. The program manager’s main responsibility is to review the practices

and policies of the nonprofit's clients, providing technical and educational

support geared towards the fulfillment of their missions and regulatory

responsibilities. The donor and nonprofit relations coordinator promotes the

donor–nonprofit relationship amalgamation program that DARC offers, in

addition to ensuring that donor and nonprofit engagement programs are

managed effectively. The staff has the expertise and comprehensive

knowledge of the role; additionally, they remain committed to the fulfillment

of DARC’s mission, values, and vision.

DARC has consultants and contractors who serve to enhance the

programs that the organization offers. There are currently three nonprofit

services associates, who support mainly the governance and compliance

programs. Six consultants serve to enhance the strategic planning, financial,

human resource, marketing, regulatory, and communications functions

within the organization. DARC has one main contractor that partners with

the organization to offer DEI resources and services to their clients. The

organization that DARC has partnered/contracted with has over 20 years of

experience within the industry and has a diverse consumer network, global

affiliations, and a vast network of affiliate partners that enhances the

program's validity and success.

Assets. The tangible and intangible asset components for DARC

include human resources, goodwill, cash, investments, equipment, and the

DARC’s online capacitybuilding tool, which will be referred to by a

pseudonym “OCBT,” which is directly related to the organization’s mission

accomplishment. DARC operated from a rented space located in the

Midwest region of the United States; however, during the COVID-19

pandemic, the senior leadership decided to give up the rental space as a cost-

saving initiative because the staff worked remotely. In 2021, they acquired

an office space that met the changing economic and technological needs.

DARC’s mission of building donor and nonprofit relationships and

fostering the improvement and strengthening of the donor–nonprofit

relationship is accomplished by serving as an independent resource by

offering educational services. A service offering of the OCBT, referred to by

the pseudonym “OCBS,” has been the asset used as the primary source for

accomplishing the mission of DARC. The senior management stated that the

OCBS has been used to cultivate a culture of philanthropy, ensuring donors

and nonprofit partnerships. The OCBS toolkit introduces nonprofits to the

fundamental benchmarks for governance practices that balance the

expectation of public and donor expectations, nonprofit sector best practices,

and regulatory requirements.

Regulatory Requirements. DARC was incorporated as a charitable

organization offering education-related services, adhering to Section 501(c)

(3) of the U.S. Internal Revenue Code of 1986. The leaders of DARC ensure

that they conduct business in compliance with the Internal Revenue Code of

1986. Under the Internal Revenue Code, charitable organizations are tax-

exempt; however, the charitable organization is required to file IRS Form

990. The IRS Form 990 is an annual return that outlines specific governance

practices of the charitable organization, which is publicly available. The

leaders of DARC ensure that IRS Form 990 is specific to asset value and

annual revenue composition.

In addition, the federal government requires that charitable

organizations have articles of incorporation, bylaws, and documentation

outlining the appointment and existence of a BOD. DARC has fulfilled all of

the additional governmental requirements; the Articles of Incorporation were

completed in 1946, and there are active bylaws and a functioning BOD. The

leadership of DARC has an employee handbook that outlines organizational

policies and procedures inclusive of regulatory health and safety practices.

The Midwestern state in which DARC was incorporated also has a

council of nonprofits that developed a set of accountability practices and

standards that the state encourages registered nonprofits to comply with.

These accountability practices and principles were developed in 1994 as a

regulatory guide to educate the key stakeholders on their roles and

responsibilities within the nonprofit organization. The council outlined 11

guiding principles for regulatory compliance in the Midwestern state in

support of the established federal Internal Revenue Code of 1986.

Governance, transparency and accountability, financial management,

fundraising, evaluation, planning, civic engagement and public policy,

strategic alliances, human resources, volunteer management, and leadership

and organizational culture are outlined and explained in the council’s

accountability practices and principles guide.

Organizational Relationships

Organizational Structure. DARC’s organizational structure consists of an

11-member

BOD, an ED, three staff members, and a 12-member team of consultants and

contractors. The ED reports directly to the BOD, while the program

manager, program services specialist, and donor and nonprofit relations

coordinator report directly to the ED. The

12-member team of consultants and contractors supports the three-staff-

member team.

The BOD is the governance body of DARC, and it is supported by the

executive and program committees. The executive committee consists of the

BOD chair, vice chair, secretary, treasurer, DARC’s ED, and other senior

officers of DARC. The main function of the executive committee is to

support, serve, and exercise the power and authority of the BOD leaders. The

program committee comprises members of the BOD and key community

partners. The main function of the program committee is to support and

encourage strong relationships between donors and nonprofits. The ED has

oversight over the governance committee, which functions as a nominating

committee and aims to enhance the organization's capacity for mission

advancement through effective governance practices.

Customers and Stakeholders. DARC is an amalgamation

organization that serves nonprofit organizations and donors by providing

tools and resources that educate and equip nonprofit organizations on

governance, regulatory, and accountability standards, as well as providing

donors with informed and relevant information that aids in encouraging

donor confidence. DARC’s customers are nonprofit organizations in the

Midwestern states and donors in the region who use the products and

services to make informed decisions for giving. DARC also promotes

partnerships with corporations and foundations that support community

enrichment by providing grants and other educational tools and materials to

educate both nonprofit organizations and donors. The major stakeholders are

community collaborators, grantmaker organizations, donors, the workforce,

nonprofit partners, and government and state regulators.

Donors are those individuals or entities who support the mission of a

charity or nonprofit organization through monetary and nonmonetary

contributions (Alhidari et al., 2018). Donors are the major customer for

DARC. DARC provides educational services and provides a seal for

nonprofits who have gone through the view process and have taken the steps

to meet the 25 accountability standards. Donors can access a list of those

nonprofits that have met the accountability standards, highlighting

governance practices and other accountability standards that would give

them a platform to make positive giving decisions. Other customers for

DARC are the nonprofit organizations that they serve by providing them

with the educational tools required to become compliant and trustworthy.

Nonprofit organizations benefit from educational resources that allow for a

thorough review of the governance, financial, management, regulatory, and

other social aspects of the operations of the organization. The nonprofit

group of DARC’s customer base is provided with the OCBT review process;

the OCBS, the DEI toolkit; other relevant resources; and a seal that signals

to potential donors that the nonprofit organization can be supported with

their monetary and nonmonetary support.

The stakeholder groups comprising community collaborators, grant

funder organizations, donors, the workforce, nonprofit partners, and

government and state regulators depend on DARC to uphold the standards,

and key governance principles and practices, that they offer as a service to

their customers. DARC offers an innovative program that enables grant

funders, community collaborators, donors, the internal workforce, nonprofit

partners, and the government and state regulators to amalgamate their

resources to strengthen nonprofits' mission accomplishment to fortify and

enrich the communities that they serve. They accomplish this by engaging

each of these stakeholder groups to provide information to aid nonprofits to

foster healthy cultural experiences, encouraging collaboration, and

leveraging technology.

Suppliers and Partners. DARC senior leaders utilize contractors,

consultants, and other key partners to realize the mission of fortifying and

enriching the communities that they serve through education (Table 1).

There is a 12-member team of consultants and contractors supporting the

three staff member team of DARC. These contractors and consultants serve

to enhance the programs and are integral to DARC’s mission

accomplishment. There are three nonprofit services associates, who support

mainly the governance and compliance programs. Six operational

consultants serve to enhance the strategic planning, financial, human

resource, marketing, regulatory, and communications functions within the

organization. There are also contract reviewers who provide both first and

second-level reviews of the information nonprofits provide in the OCBT that

aim to grant those nonprofit organizations with a OCBS certification.

DARC has one main contractor that partners with the organization to

offer DEI resources and services to their clients. The organization that

DARC has partnered and contracted with has over 20 years of experience

within the industry and has a diverse consumer network, global affiliations,

and a vast network of affiliate partners that enhances the program's validity

and success. DARC also has community, organizational, civic, and

governmental partners that provide support through service on the BOD and

other program initiatives that contribute to the mission of empowering

donors in making informed giving decisions and educating nonprofits on

accountability standards to encourage trustworthiness.

Table 1

DARC’s Key Supplier and Partner Requirements

Key suppliers Key requirements Alignment

Consultants/Contractors Support and enhance the

service of DARC by

providing financial,

strategic, HR, marketing,

and communications

services.

DARC senior leaders

contract with

contractors and

consultants to

enhance and fulfill

the mission

objectives.

Key partners Key requirements Alignment

Partner organizations

Local government and

civic

organizations

Local businesses and

nonprofit affiliates

Support DARC’s

program offering with a

DEI toolkit, and other

educational resources.

Support DARC by

providing oversight,

compliance, regulatory,

and funding resources.

Support DARC’s

program initiatives to

improve governance,

operational, community,

knowledge, and resource

expertise.

DARC senior

leaders ensure

programs and

services align with

the needs of the

customers and

interest of

community

members.

DARC senior

leaders work with

local government

and civic agencies to

ensure that

programs align with

governmental

governance

regulations.

DARC senior leaders

work with other

nonprofit affiliates,

volunteers, and

community leaders

who share resources

and expertise to

enhance program

offerings and

community

enrichment

initiatives.

Organizational Situation

The purpose of this qualitative single case study was to explore

strategies that nonprofit leaders use to improve governance processes and

encourage donor confidence to increase the levels of donations. DARC’s

senior leaders have developed a unique service offering and business model

in which the established mission of building donor and nonprofit

relationships and fostering the improvement and strengthening of the donor–

nonprofit relationship is accomplished by serving as an independent resource

by offering educational services. The competitive market environment for

the educational classes of nonprofits within the industry is varied, ranging

from small to large organizations. The benchmark for the classification of

the size of a nonprofit organization is usually measured by revenue, while

the identification of existing competitors, within a specific class, would be

measured by the product or service offerings.

While DARC’s leaders provide an essential service to nonprofit

organizations and donors in the Midwestern USA, the organization is a

nonprofit as well and depends on external resources to sustain and realize

mission accomplishment. Competition for resources within the nonprofit

industry has increased significantly. The main source of revenue or income

for many nonprofit organizations is donations, however, with the increased

competition for donors, there has been a need for leadership to find other

viable strategies to mitigate the resource dependency that exist within the

structure of the nonprofit industry. The collection of fees for products and

services offered has become one of the major strategies that leaders have

used to mitigate the competition for donations (Heger et al., 2021; Johnson

et al., 2020). National Council of Nonprofits (2019) reported that fees

collected from the services offered by nonprofits account for approximately

56% of the total revenue within specific classes of nonprofits in the United

States of America.

Competitive Environment

Competitive Position. Section 501(c)(3) of the United States Internal

Revenue

Code of 1986 defines midsized nonprofit organizations as those with assets

ranging from $100,000 to $500,000. DARC is a midsized educational

service nonprofit with assets under $500,000.00. DARC is the only nonprofit

organization that offers educational services for both donors and nonprofits

in the Midwestern region of the United States, which aim to build a positive

relationship between both classes of clientele. DARC serves locally in the

Midwestern region of the USA; however, other larger nonprofits provide

similar educational resource services nationally in the USA and provide a

rating or certification services to nonprofit organizations, while indirectly

affording donors a platform to do their due diligence before contributing to

the mission of those nonprofits.

DARC leaders have a competitive advantage in the Midwestern region

of the United States because they are the only nonprofit that offers

educational services that benefit both donors and other nonprofit

organizations. There are about seven local nonprofit organizations that have

similar missions of providing educational resources and support to donors or

nonprofits; however, there are no nonprofits that have the exact or closely

related missions to that of DARC. Nationally, five larger nonprofit

organizations have a similar mission to that of DARC. These five larger

nonprofit national organizations evaluate, review governance, and provide

information to donors about nonprofit compliance, governance, and

accountability standards. The competitive advantage that DARC has is its

interactive and relational approach to nonprofit-donor relationships that

encourages collaboration for the wealth and sustainability of the

communities they serve. One of the major competitive threats that DARC

leaders contend with is their reliance on external resources to sustain the

operations of the organization.

DARC’s leadership has successfully mitigated the competition for resources

by implementing fees for some of the services they offer, ensuring that they

are certified and have effective governance practices in place, as well as,

maintaining governmental, community, and organizational partnerships.

Competitiveness Changes. DARC has product and service offerings

that are aimed at building a culture of consistent altruism among donors and

improving governance and regulatory compliance in nonprofit organizations.

Many of the educational services that were offered in the earlier years since

DARC’s inception in the 1940s were transactional. DARC’s leaders

recognized the importance of changing the service standards to meet the

need of their clients and of improving their competitive advantage in the

region. DARC’s leaders shifted the transaction-framed service to focus on

authentic engagement. Also, implementing online and technologically

relevant options became an integral factor in competitive advantage

considerations.

DARC’s leaders accomplished the change of shifting to authentic

engagement between donors and nonprofit by creating an interactive website

that outlines governance and accountability standards that certifies the

legitimacy of a nonprofit organization and provides a list of those nonprofits

that have gone through the OCBS review process and have gained a seal.

Also, DARC’s leaders recognized the importance of having technological or

online options for their clients to utilize the service and product offering. The

other larger competitors provide technological and online options; however,

their strategy has been self-reported and algorithmic based. DARC’s leaders

decided to offer authentic engagement within the technological and online

offerings by ensuring that the review process has a direct and rational

approach.

Comparative Data. The sustainability of a nonprofit organization is

dependent on an industry evaluation of competitors. Having benchmark

comparative data to evaluate the nonprofit’s threats and weaknesses is

essential to maintaining competitive advance within the industry that it

serves. DARC does not currently have any direct competitors in the region

that it serves; however, DARC leaders rely on comparative data to enhance

the services that it offers to nonprofit customers. The main source of

competitive data that DARC’s leaders use is ascertained from online sources

such as Charity Navigator, BBB Wise Giving Alliance, CharityWatch, and

Guidestar. DARC’s leaders can use the data gathered from these rating

organizations to update the accountability standards and governance

practices that are required to educate both the nonprofit clients and the

donors that rely on the services that DARC offers. Also, DARC’s leaders

ascertain governmental and competitive data to ensure that they remain

abreast of changing government requirements, industry governance

practices, and regulatory compliance.

Strategic Context

DARC’s leaders had a three-year strategic plan for 2018 to 2020,

however, with the emergence of the COVID-19 pandemic, the leaders

decided to extend the existing plan into 2021 (see Figure 2). DARC’s current

key strategic challenges and advantages became more evident as the

COVID-19 pandemic persisted into 2022. Table 2 outlines a summary of

DARC’s primary strategic challenges and advantages. A fundamental

strategic challenge arose during the COVID-19 pandemic, which required a

revision of the existing business model. There were changes in DARC’s

permanent staff complement, resulting in historical and expertise knowledge

emigration. Declining donor support negatively impacted the financial and

operational results for DARC. DARC’s leaders' decision to offer authentic

engagement, using a direct and rational approach, as a part of the service

standards, through technological and online programs lead the leaders to

make a significant technological investment. The decision to invest in a

website meant that they would discontinue the arrangement with the

program developer and instead partner with a tech vendor. The fundamental

strategic advantages of investing in technology meant that donors now had a

convenient platform to access information and source for giving. The

technological investment provided an opportunity for strategic relationships

and partnerships which created a platform for collaboration, growth

prospects, and an opportunity for alternative revenue streams. DARC’s

smaller workforce meant that the employees were able to exercise their

expertise and be able to form relevant community partnerships which

support DARC’s mission statements.

Table 2

DARC’s Key Strategic Challenges and Advantages

Primary strategic area Primary challenges Primary advantages

Operations

Declining donor support

created a need to align

internal resources to

meet external demands.

A revised business

model that is framed for

growth, partnerships,

and sustainability.

Workforce

Programs and services

The COVID-19

pandemic created

knowledge and expertise

emigration.

Transitioning to the new

website would require

training, new staff

responsibilities, and a

significant financial

investment.

Small staff complement

encourages innovation,

expertise, and

creativity, while

project-based

consultation supported

concentrated financial

management.

Customers' demands are

met, while DARC’s

expand

reach is facilitated with

a convenient and

userfriendly online

platform that supports

authentic engagement

service standards.

Performance Improvement System

DARC’s executive team has established bylaws, an employee

handbook, committee charter documents, and other governance documents

which outline the policies and procedures for performance evaluation and

improvement standards. DARC’s employees have consistent feedback from

the clients through the authentic engagement service standards, where each

client is asked to complete a customer satisfaction survey.

After the surveys are completed, they are then evaluated by a team of

experts, and improvement recommendations are discussed quarterly by the

program committee. The program committee’s recommendations are

submitted to the executive committee for discussion and consideration at the

yearly strategic planning meetings.

DARC’s bylaws are extensive, outlining articles for (a) specific board

meeting policies, (b) officer composition and tenure, (c) committee authority

and composition, and (d) an article for improvement or amendment of the

bylaws as needed. DARC’s leaders created an employee handbook that gives

extensive information on personnel policies and procedures, and health and

safety procedures. DARC’s employee handbook outlines improvement and

evaluation policies and includes specific standards for corrective action.

There is a formal process for the evaluation and improvement standards for

the programs and service that is offered. DARC’s leaders have an annual

planning session where customer surveys are evaluated and improvement

procedures are implemented in the strategic planning sessions.

Leadership Triad: Leadership, Strategy, and Customers

Leadership

Senior Leadership

DARC’s senior leaders comprise the ED, the BOD, and the program

manager. DARC’s leaders developed a vision statement that focuses on

developing and creating a transformative culture of altruism in the

Midwestern United States. The value standards of the organization are aimed

at forging trust, striving for excellence, creating innovative solutions, and

modeling integrity. DARC’s leadership has established and implemented

several governance, corporate, and regulatory documents that outline the

mission, vision, and value standards of the organization. The bylaws, board

governance guidelines, employee handbook, committee charter, and strategic

framework documentation are just a few of the tools that have been created,

reviewed, and implemented by DARC’s leaders to ensure that they remain

compliant and steadfast in their commitment to upholding the mission,

value, and vision of the organization.

The board governance guidelines expound on effective standards and

governance practices that will contribute to public confidence, as well as

provides a framework for the roles and responsibility of the senior leaders.

Some of the roles and responsibilities of the BOD include (1) the parameters

for effective communication with DARC’s shareholders, media, donors, and

other external parties; (2) compliance with the established ethics policies; (3)

BOD orientation, evaluation, and selection; (4) BOD meeting structure and

conduct; (5) conflict of interest statements and rules. The senior leaders

ensured that each employee, volunteer, consultant, and contractor has access

to the employee handbook which outlines DARC’s commitment to creating

a positive work environment that exhibits trust, excellence, innovative

solutions, and integrity. The employee handbook includes elements for equal

opportunity, workplace health and safety, salary and compensation,

workplace harassment policies, and whistle-blower policies. DARC’s

leadership ensures that there is an onboarding seminar and a provision for

each of the workforce categories to seek clarification on any of the policies

outlined in the handbook.

DARC’s leaders have a wealth of knowledge and expertise in the

nonprofit industry and other industries. There is a conscious effort to ensure

that the selection of BOD members and other leadership roles are

characterized by values that align with the mission, values, and vision of

DARC. The board member expectation document highlights that each Board

member should exhibit traits such as respect, commitment, candor, integrity,

and consciousness for diversity and inclusion. The ED of DARC has

exhibited these character traits and so much more. During the interview

segment, many of the participants mentioned their admiration for the ED’s

leadership standards, care, and commitment to creating a work environment

that supports trust, excellence, innovative solutions, integrity, and equal

opportunity. The ED ensured that the program and services offered by

DARC also included DEI, by launching the DEI toolkit in 2017, as a part of

the review process. DARC’s ED has a passion for philanthropy, sociology,

and anthropology; and has served in different volunteer positions in the

Midwestern United States.

DARC’s leaders are passionate about fostering healthy, strong, and

vibrant relationships between nonprofit organizations and donors. DARC’s

leaders have accomplished and created a platform that encourages and has

achieved this passion. “The

Forum” is one initiative that is organized and hosted by the DARC’s leaders

to support the engagement of community leaders, partners, customers, and

the workforce. During

“The Forum” sessions, participants have the opportunity to learn about

DARC’s commitment to achieving the mission, vision, and values of the

organization, while empowering staff, stakeholders, and customers.

Governance and Societal Responsibilities

The Midwestern local government council has an established set of

principles and practices for nonprofit organizations and the governing board

of directors and a benchmark for governance practices and societal

responsibilities. The principles and practices document provide by this

governmental council also highlights the regional and federal compliance

mandates. DARC offers three programs that align with the mission, values,

and vision of the organization. The programs provide the information,

education, and training for regulatory compliance, tools and resources that

encourage donor– nonprofit engagement; and online capacity-building tools

for sustainability, compliance, and effective governance. DARC’s leaders

provide the tools for other nonprofits to succeed and be regulatory

compliant; they also believe that they have to also ensure that they are

leading the charge in these areas. DARC’s leaders have established and

implemented several governance, corporate, and regulatory documents that

ensure that effective governance practices are in place, and also that they

champion the standards that result in remarkable societal responsibilities.

The BOD is the governance body of DARC, and they are supported by the

executive and program committees.

Executive Committee. The executive committee exercises the

powers and authority of the board. The executive committee consists of the

board chair, vice-chair, secretary, treasurer, ED, and any other board

member that has been duly appointed to sit on the committee. The strategic

charge of the executive committee is to recommend financial policies,

approve budgets, evaluate the performance of the board, lead and monitor

strategic planning sessions, and promote engagement opportunities for

DARC and other key strategic partnerships that support the mission and

strategic goals of the organization.

Governance Committee. The governance committee supports the

organizational capacity of DARC. The governance committee functions as

the nominating committee, the members provide training, development, and

evaluation of the BOD; and ensure compliance with the board governance

guidelines. The strategic charge entails board orientation, education, and

engagement; evaluation of DARC’s governance structures; and evaluates

and plans for board nominations and recruitment.

Program Committee. The program committee supports the programs

and service offers of DARC. The program committee consists of members of

the BOD, the program manager, and other key community volunteers that

have specialization and expertise for the program offerings at DARC. The

program committee members support efforts of the program service

standards that align with DARC’s mission by identifying new collaborative

opportunities in the community. Also, the committee members support

DARC’s leaders by ensuring that the programs build operational capacity

and sustainability.

The Midwestern local government council’s principles and practices

for nonprofit organizations and the governing board of directors outline 11

accountability principles for effective governance and regulatory

compliance; while the 192 management practices provide a guide for leaders

to evaluate and improve the operational competencies.

DARC’s leaders are members of the Midwestern local government council,

and they have established a strategic alliance with this organization to

support the programs that DARC offers to their customers. In addition to the

strategic alliance, DARC’s leaders ensure that all the governance, corporate,

and regulatory documents that are implemented within the organization

comply with the council’s principles and practices for nonprofit

organizations and the governing board.

DARC’s mission is grounded in the principles of building

relationships between nonprofit organizations and donors. Both of these

categories of customers that DARC serves are a major part of society.

DARC’s foundational value standards of forging trust, striving for

excellence, creating innovative solutions, and modeling integrity; and the

mission of building strong and vibrant relationships, have encouraged

healthy community relationships. DARC’s leaders ensure that the programs

they have initiated to encourage business leaders to be more socially

responsible are the same principles that guide the social programs they lead.

In 2022, DARC developed an educational series that helps donors to identify

nonprofit organizations that comply with regulatory guidelines and uphold

effective governance practices. The educational series was published in the

local media. DARC’s leaders are passionate about creating healthy societies

through education.

Strategy

Strategy Development

Strategic management is an integral part of an organization’s

sustainability and involves formulating a plan for allocating resources to

achieve and maintain competitive advantage (Kurland & Mercer, 2020).

DARC’s leaders ensure that a strategic planning session is conducted each

year. The members of the program committee, governance committee,

executive committees, ED, and BOD are instrumental in the strategic

planning, revision, and development process. DARC’s leaders finalize a

strategic plan every 3 to 5 years; however, there is a strategic session once

per year. DARC’s ED employs the expertise of a strategist contractor to help

in the strategic development process. The executive committee, along with

the strategist contractor representative, has a planning session to develop and

review the outgoing strategic plan results annually.

During the strategic development meeting, the members of the

executive committee analyze and evaluate completed internal and external

assessments. The internal assessments include donor, staff, BOD, and client

surveys, also historical financial and operational results. The external

assessments include the annual independent sector report, comparative

industry reports, and other relevant state regulatory data. These documents

are all compiled and presented at this session, after which a SWOT (strength,

weakness, opportunities, and strengths) analysis is compiled to be presented

to the BOD. This session is usually held before the end of the fiscal/calendar

year. The session's objective is to review and discuss the strategist

contractor’s recommendation for the strategic approach for DARC and to

prepare the process and timeline report, along with other strategic

recommendations for the BOD. The plan begins with the key components of

DARC’s strategic plan that will be explored and developed. One of the

major components of the strategic development process entails a review of

DARC’s purpose, by discussing the relevance of the existing mission,

vision, values, and current strategic priorities. The executive committee

creates a draft of the process and timeline report recommendation that will

be presented to the BOD for approval or further discussions and

amendments (see Figure 3). Also, the executive committee will develop a

plan for DARC’s key personnel, outlining the roles and responsibilities of

each personnel or body, to facilitate the strategic development for each phase

of the process (see Figure 4).

DARC’s leaders ensure that each of the internal and external

assessments is analyzed thoroughly. Each member of the committee has an

opportunity to identify, highlight and discuss SWOT elements in each of the

documentation that is reviewed. At the strategic planning sessions, each

member of the committees, key staff, and the BOD are afforded intellectual

considerations. This interactive approach is facilitated using technology that

can be shared in real-time with each member, this approach encourages

engagement and innovation. Some of the questions that are discussed and

considered during the strategic development process are as follows:

•In what ways has the previously approved and implemented

strategic plan been used to guide decision-making, priorities,

activities, and programs?

•What has been successful and what has not been successful with

the previous strategic plan(s)?

•Why is it important to conduct a new strategic plan now?

•What are the major strategic issues facing the organization?

•Who are the organization’s current key stakeholders?

•Is the organization meeting the needs of the key stakeholders?

•Is the organization’s mission still relevant?

•Is the organization’s vision statement aligned with the mission

statement?

•Is the organization’s values representative of culture, mission, and

vision?

•What other comments or thoughts would you recommend for the

strategic planning and development process?

After the initial meeting, DARC’s executive committee proceeds with

the established process and timeline recommendations (see Figure 3). The

next step is for the key role recommendations to be materialized. The BOD

and key staff are invited to provide their understanding of the external and

internal assessments and engage in the other questions and considerations for

the strategic development process. During the subsequent sessions, the

executive committee, BOD, and key staff members engage in the process of

identifying the key strategic option and agree on those options that will be

implemented. Some of the questions that are asked to guide the strategic

planning process include:

•In the current economic environment, is the organization’s mission

still

relevant?

•In the current economic environment, what aspects of the

organization’s mission that is not relevant?

•What is the organization’s competitive advantage?

•What are the strategies that the organization will implement to

ensure that donations are consistent?

•What plans or ideas can the organization consider to create new

revenue streams for sustainability?

Strategy Implementation

During the strategic development process, DARC’s executive

committee established a process and timeline framework which include a

section called “move from vision to action” which outlines the process of

establishing the strategic priorities, goals, strategies, and annual work plans.

The executive committee recommends the final version of the strategic plan,

the BOD approves it, and the ED and key staff members provide input for

each of the elements of the strategic development process. The BOD

approved annual plan outlines the major strategic goals/priorities, explains

the strategy that will be used to achieve these goals, highlights the

objectives, and summarizes the tactics that will be implemented to achieve

the objectives (see Figure 5). The strategic plan is approved by the BOD and

the ED, with the expertise of the strategist and marketing contractors, and

establishes a graphic that will be posted to DARC’s website. The ED

communicates the strategic plan to key stakeholders through DARC’s

newsletters and other social media platforms. The ED has a session with

each of the key parties outlining the details of the strategic plan and the roles

that each committee, key staff, and the BOD has to fulfill to achieve the

goals and objectives of the strategic plan. Throughout the fiscal year, the

executive committee hosts meetings to review or monitor different elements

of the strategic plan; subsequently the ED periodically updates the

BOD on the process of the current strategic plan.

Customers

Customer Expectations

DARC is an amalgamation organization whose customers are

nonprofit organizations and donors. Nonprofit organizational leaders or key

employees can access

DARC’s three product offerings, while donors are served by accessing the

provided list of nonprofits that have met the accountability standards through

DARC’s product offering. DARC’s leaders understand the importance of

meeting their customer’s needs.

A part of the strategic development process focuses on the needs of their

customers.

The product offerings that are available to nonprofit customers have a

pre-review and post-review evaluation as a part of the service requirements.

Survey monkey technology is the technological tool that is used to create

and evaluate the evaluations for each product offering. The program

committee spends valuable time crafting the questionnaires to ascertain

product satisfaction and allows clients to provide feedback on improvements

that they would like to incorporate into the product offerings. Also, the

leadership team hosts a monthly virtual meeting forum that facilitates a

question-andanswer segment for the customers of DARC’s products.

DARC’s donor customers are encouraged to provide feedback using a donor

survey that can be accessed conveniently, on the organization’s website.

Also, DARC established an annual forum that donors and other key

stakeholders attend with the main objective of providing feedback on the

organization's performance and answering questions surrounding donors’

needs.

Customer Engagement

DARC’s competitive change analysis lead the leaders of the

organization to shift from a transaction-framed service focus to an authentic-

engagement focus for the customers they serve. DARC’s leaders decided to

implement tools that had online and technologically relevant options that

aligned with the authentic engagement service focus. DARC’s leaders

created an interactive website that supports the engagement of customers.

DARC’s leaders recognize that effective customer engagement equates to

effective communication; subsequently, DARC’s leaders publish a monthly

e-newsletter and a semi-annual organizational newsletter which are sent

directly to the customers.

Also, DARC’s leaders have established a platform that gives periodic

updates on products, social responsibility initiatives, and other relevant

updates, using a blog that is accessed through the organization’s website.

DARC’s leadership established a culture of customer engagement.

Customers are encouraged to send emails with queries during the review

process. DARC’s service standard dictates that general email and phone

inquiries are answered within 24 hours, or the same business day. Many of

DARC’s existing donor customers have been with the organization for many

years and they are used to having communication mediums that they prefer.

DARC’s leaders have decided to meet the needs of this class of donor

customers by ensuring that printed versions of our semi-annual newsletter

are mailed to them. Many donor customers prefer to call the office to ask

direct questions related to nonprofit information. The staff at DARC ensures

that there is a representative that answers those calls and spends the time

needed to give those customers the information they require.

Results Triad: Workforce, Operations, and Results

This section of the study highlights DARC’s workforce and

operational processes along with performance results. The information for

each section was derived from the data collected and the analysis performed.

The evidence presented will provide DARC’s leaders with potent

information about the effective processes and those processes that may result

in challenges for governance implementation and mission accomplishment.

Workforce

The ED has direct responsibility for the day-to-day operations of

DARC which includes asserting the hiring needs of the organization. The

ED is also responsible for establishing and supporting the workforce.

DARC’s workforce has changed throughout the over 70 years of existence in

the Midwestern United States. At the time of the study, the workforce was

affected by the COVID-19 environment. The primary categories of DARC’s

workforce consisted of the 10-member board of directors, 4-member staff,

and a

12-member team of consultants and contractors.

Workforce Environment

DARC’s ED evaluates the staffing needs based on the mission of the

organization. The evaluation process is usually ascertained from customer

feedback and discussed at the program committee meetings throughout the

year. The ED post available jobs on DARC’s website and other sector hubs,

social media, and university job posting platforms. Organizational leaders

who understand the importance of the onboarding process to the employee

and organizational success ensure that effective measures are in place to

facilitate a new employee’s orientation.

DARC’s ED facilitates the onboarding of each workforce member that

is employed, whether they are staff members, board members, consultants,

or contractors. Each workforce member has a signed employment contract

and is orientated on the employee expectation, through training and

documentation relevant to the employee’s category of employment. The ED

has a personality that is warm and welcoming. The feedback ascertained

from the selected participants of DARC revealed that they all admire and

respect the current ED as a flexible leader in supporting a positive, inclusive,

and healthy workforce. Along with the ED´s academic accolades in

sociology and anthropology, the ED also has extensive experience in human

resources, which has been an asset for DARCs positive workforce. The ED’s

passion and commitment are evident through involvement in community

enrichment campaigns, being awarded corporate community recognitions,

and the success of each of the workforce members.

DARC has had a positive reputation, in the Midwestern United States,

as a positive workplace. Since DARCs inception in the mid-1940s, the staff

retention rate has averaged 90%, which is high for the nonprofit sector.

However, due to economic, social, and mental issues directly related to the

COVID-19 pandemic environment, DARC experienced staff turnover during

the years 2020 to 2022. One of the mitigating responses to the changing

workforce complement, DARC’s executive leadership team decided to

change the workforce environment to a permanent hybrid workforce

environment. The leadership team also took the necessary steps to make the

hybrid workforce adjustments seamless and nondisruptive to the operations

of the organization. The Charity Navigator, a charity rating agency, awarded

DARC with the highest ratings, under the leadership and adaptability

category, for the decision to move the workforce environment from the

traditional in-person work environment to a hybrid workforce environment.

DARC’s employee handbook outlines extensive information on

personnel policies and procedures; health and safety procedures;

improvement and evaluation policies; and includes specific standards for

corrective action. DARC’s employee handbook also expounds on the formal

process for program evaluation and improvement standards. All employees

are considered for posting through an equal employment opportunity and

hiring policy and an at-will condition. Both policies comply with positive

governance, legal, and ethical requirements. The equal employment

opportunity policy dictates that each employee is considered without regard

to race, creed, color, religion, age, sex, marital and familial status, among

other discriminatory considerations. The at-will condition stated that each

employee can resign at any time, and DARC’s leaders can terminate the

contractual relationship at any time. Employees are hired on a full-time, part-

time, or temporary employment tenure. Compensation for each employee

classification is decided by the BOD and the ED. Compensation is at fair

market value and complies with federal and industry standards. The health

and safety procedures are comprehensive; each employee has formal training

sessions on the standards, also, continuous improvement policies are in place

to review and update these policies accordingly. DARC’s employee

handbook outlines the policies and procedures for corrective actions against

instances of harassment, grievances, intellectual property, and

whistleblower. The employee benefits include: (a) reimbursement for

training and education; (b) compensatory time; (c) personal time off; (d)

floating holidays; (e) wellness leave; and (f) health and insurance plans.

Workforce Engagement

DARC’s leadership has cultivated an open-door policy for all employees.

DARC’s leaders have outlined detailed policies and procedures for specific

leadership personnel regarding their concerns. During the interview,

participant 2 explained that the ED has facilitated a work environment that is

conducive to effective communications, frequent scheduled or impromptu

meetings, and care for the employee's personal and professional concerns.

DARC’s leaders have ensured that the core mission of being an

amalgamated focused organization that facilitates strong relationships

between donors and nonprofits is also evident in the engagement practices

for its workforce. Diversity, equity, and inclusiveness standards, equal

employment opportunity, and whistleblower policies are some of the

strategies that have been put in place to encourage workforce engagement.

The ED has frequent meetings with staff members, BOD, consultants, and

contractors. The annual work planning meeting is another opportunity to

encourage workforce engagement, also, the annual staff satisfaction survey

provides an opportunity for DARCs leaders to implement additional

strategies for workforce engagement.

Operations

Work Processes

Donor–nonprofit relationship amalgamation, general donor services,

and general nonprofit services are the three main programs that DARC

offers. Each of the program offerings is aligned with DARC’s mission,

vision, and values. The program committee supports the programs offered by

DARC. The program committee members support efforts for the alignment

of the program offering standards with DARC’s mission and they identify

new collaborative opportunities in the community. The program manager

has a training webinar for registered customers for program offerings at a

scheduled systematic time throughout the year. During the training webinar,

the program manager highlights the program’s priorities, outlines an

overview of the resources that will be provided, and facilitates a question-

and-answer session. DARC’s leaders have documented and provided

information to staff members on the protocol for calls related to a variety of

different queries that clients or donors may have. The Microsoft 365

OneNote is the platform that DARC’s leaders have established to outline the

protocol and procedures detailing the work processes for all program

offerings and other day-to-day operational standards. The employees are

given access to those protocols that are relevant to their job functions.

DARC’s website also has relevant information for work processes that can

be accessed by current and prospective clients and donors.

The work process for the orientation webinars that are conducted, for

example, has the following protocol:

1. Six months before the scheduled webinar the responsible facilitator

should set up multiple tentative dates to be sent out to attendees.

2. Two weeks before the webinar the responsible facilitator should be

sent an invitation to the attendees and set up automatic emails to

invitees along with webinar confirmation emails (a template is also

referenced).

3. The orientation email list generation should be completed (a

detailed procedure is referenced, and a link is provided).

4. The agenda should include (a) login information; (b) the program

overview information; (c) the program documentation and section

overview; (d) website resources links; and (e) guidance for the

question-and-answer segment.

The existence of detailed and accessible work processes contributes to

DARC’s operational effectiveness.

Operational Effectiveness

DARC’s leaders facilitate strategic and work planning sessions each

year where budgetary evaluation, analysis, and preparations are completed.

In 2021 DARC achieved 71% of the revenue budgeted and utilized 97% of

the budgeted expenditure. Charity Navigator has given a 100% rating for

DARC in the finance and accountability category, stating that under the

Internal Revenue Code, though charitable organizations are taxexempt, they

are required to file the IRS Form 990. DARC’s 2021 filed IRS Form 990

reflected 20.01% in liabilities to asset ratio, which indicates that the DARC

has a healthy solvency or positive indicator of long-term operational

sustainability.

One key operational effective measure that DARC’s leaders have

incorporated has resulted in operational savings for employee cost. DARC’s

leaders decided to utilize the services of contractors and consultants to carry

out professional roles instead of hiring full-time staff. The decision to use

expert contractors and consultants has saved the organization over $500,000

in employee costs, such as salaries, health, and insurance benefits. In 2021,

the professional fee cost was approximately $110,000. The security and

cyber security are outsourced to a reputable contractor that provides the

required levels of protection for the technology. DARC’s internal

technological systems or laptops have McAfee security software installed on

them and other security features to ensure client data protection. Another key

indicator of DARC’s operational effectiveness is the renewal rate of

nonprofits that use the OCBT. DARC’s leaders have reported a 92% renewal

rate in the 2021 annual report.

Measurement, Analysis, and Knowledge Management

The Baldrige Excellence Framework uses a systems-based approach

that explores six fundamental management and leadership quadrants to

measure, analyze, and benchmark knowledge criteria within an organization

(Baldrige Performance Excellence Program, 2023). Leadership; strategy;

customers; workforce; operations; measurement, analysis, and knowledge

management; and results are the Baldrige Excellence

Framework’s foundational management and leadership areas (see Figure 6).

The Baldrige

Excellence Framework was the systems perspective management tool used

to determine how DARC’s leaders measure, analyze, and utilize information

to improve organizational competitiveness for sustainability in alignment

with the DARC’s mission, vision, and values.

Measurement, Analysis, and Improvement of Organizational Performance

DARC’s leaders use several effective measurement tools to evaluate

the organization’s program, product, and service offerings. Customer

evaluation surveys, staff evaluations, and the Sales Force customer

relationship management (CRM) software are some of the tools that have

been used by DARC’s leaders to measure, analyze, and make continuous

improvement decisions to aid in organizational performance. The Sales

Force CRM is one of the major tools for tracking and analyzing the

organization’s performance. This Sales Force CRM has a dashboard that

gives a real-time visual update of the number of sales for DARC’s 3 major

product offerings at any given time. The Sales Force CRM software

generates illustrative grafts and charts that provide integral information for

sales trends, revenue generated for a specific period, and key measures to

ascertain customer satisfaction. During the strategic planning sessions, the

data and reports generated from the Sales Force CRM are the key documents

used to frame the discussion around DARC’s performance results, ascertain

the areas for improvement, and analyze key indicators for change within the

organization.

DARC’s financial performance is evaluated based on the BOD’s

approved budget for the year under view. During the annual planning

meetings, or scheduled BOD meetings, throughout the fiscal year, the

financial personnel provide a financial update that outlines DARC’s

financial performance at a given point during the fiscal year. The financial

personnel give a report which evaluates and measures whether DARC’s

financial performance was aligned to each budget line; variances are

explained. Having financial measurement and analysis allows DARC’s

leaders to evaluate financial goals periodically and the results are used to

make key financial and operational decisions for the next fiscal or strategic

planning process.

Information and Knowledge Management

DARC’s leaders understand the importance of having rich information

and knowledge management systems that facilitate effective organizational

performance. The existence of effective governance practices, such as

transparency and disclosure policies dictate the effective flow of information

to key stakeholders of an organization (Blouin et al., 2018). There are

various strategies that DARC’s leaders have implemented to ensure that

information and knowledge management is disseminated among the key

stakeholders of the organization. Using technology to disseminate

information across different stakeholder groups has been one of the key

strategic focuses of DARC’s leadership team. Using the measurement and

evaluation metrics to ascertain the needs of the customers, staff, and external

stakeholders has been integral to DARC’s performance improvement

initiatives.

Technology, through the use of DARC’s website and other product

and program software, has made it convenient for different categories of

stakeholders to access vital information and knowledge about the operations,

strategic plans, performance rules, and events of DARC’s operations.

Donors, nonprofits, partners, staff members, and other interest groups can

get relevant information and knowledge about the operations, performance,

and industry from DARC’s website. Also, DARC’s website provides access

to other resources and information that each of the stakeholder groups can

access conveniently. DARC’s website and product software incorporates a

section where clients can give feedback about products, programs, or service

offerings. DARC’s program personnel can access the feedback information,

which is then shared with other key personnel to aid in rich knowledge

management acquisition, then the information is shared during scheduled

program committee, BOD, annual, and strategic planning meetings.

DARC introduced a program called “The Forum” which is an in-

person event, organized and hosted by the DARC’s leaders, to support the

engagement of community leaders, partners, customers, and the workforce,

as well as gain rich information and knowledge from each key stakeholder

group. During “The Forum” sessions, information is shared with the

participants, while the information the participants share with the

DARC’s personnel becomes integral knowledge that is utilized during the

strategic planning initiatives.

Collection, Analysis, and Preparation of Results

The purpose of this qualitative single case study was to explore

strategies that nonprofit leaders use to improve governance processes and

encourage donor confidence, to increase the levels of donations. The

research question explored in this study was: What strategies do nonprofit

leaders use to improve governance processes and encourage donor

confidence to increase the levels of donations? Data were collected using

semistructured interviews, internal archival records/documents, and public

data reports. Data were organized using identified themes, codes, and

patterns related to the research question. The analysis of the data identifies

regulatory compliance, internal assessment, and engagement as the three

major themes surrounding the impact of governance practice on donor

confidence and increased levels of donations within nonprofit organizations.

Thematic Findings

Thematic Finding 1: Regulatory Compliance

Compliance is one of the major determinants that positively affect

donor confidence and the decision to support a nonprofit through donations.

The U.S. federal regulations do not have stringent governmental compliance

for nonprofit organizations compared to that of for-profit counterparts (Abu

Khadra & Delen, 2020); however, they do require that nonprofits with

revenue base above $200,000 be required to file IRS Form

990. The 4 participants who were interviewed stated that the key to

improving governance practices is to ensure that regulatory compliance is

upheld in nonprofits. Participant 2 stated that one of the major strategies that

they have used to improve governance practices was for the organization to

endure that there is evidence of adherence to state and federal guidelines for

nonprofit organizations. Each of DARC’s three program offerings includes a

component that provides information and instructions for encouraging

nonprofits to remain regulatory compliant. Pfeffer and Salancik’s (1978)

RDT recommended that one of the strategies that organizations should use to

mitigate resource dependence is for the organization to find strategies to

remain independent by ensuring regulatory compliance. DARC’s leaders

ensure that the IRS Form 990 is filed annually. DARC’s website outlines

IRS Form 990 returns for the years 2016 to 2021.

Thematic Finding 2: Internal Assessment

Internal assessments are integral for nonprofits to remain sustainable.

The major activity that encourages internal assessment is the strategic

planning process. Pfeffer and Salancik (2003), through RDT support the

notation that nonprofit leaders who take active steps to ensure that

interorganizational actions such as board composition, accountability, and

strategic planning will have adequate resources and information to

encourage sustainability (Kurland & Mercer, 2020; Rodríguez-Arias et al.,

2021). Participant 3 responded to the interview question that sought to

ascertain what policies leaders have implemented to encourage

accountability by stating that having a governing board, committees, and

other leadership activities that support continuous internal assessments is

important to an organization’s accountability and sustainability. The other

participants mentioned that DARC’s products and program offerings support

leaders in implementing and conducting internal assessments to encourage

donor confidence; the participants mentioned that using the OCBS to

evaluate DARC’s governance practices is paramount to self-audit. Pfeffer

and Salancik stated in RDT that interorganizational actions, such as internal

assessments supports effective governance practices and satisfies the

demand of stakeholder power excertion. The evidence of over 20 years of

strategic planning documentation is signifies the importance that DARC’s

leaders place on conducting internal assessments.

Thematic Finding 3: Engagement

Customer, employee, stakeholder, and community engagement

equates to building positive relationships. DARC is a donor-amalgamation

nonprofit organization that mission, values, and vision is grounded on the

building of relationships, mainly between nonprofits and donors, however,

they ensure that employees, other key stakeholders, and community partners

have positive and strong relationships. RDT asserts that there is power

gained through relationships while a perceived self-sustainable organization

will take intentional steps to foster direct or indirect relationships with the

external environment (AbouAssi & Bies, 2018; Cuervo et al., 2019).

Freudenreich et al. (2020) stated that donor engagement can be achieved

when nonprofit organizations take active steps to provide them with

information relevant to the organization’s strategic plans. Pfeffer and

Salancik (2003) stated through RDT stated that political action is closely

aligned with engagement initiatives, which can mitigate the effects of power

control influences. DARC’s study participants identified the annual

customer events, different mediums of communications, annual reports,

interactive social media, the website, and compliance as the major strategies

for promoting engagement and building relationships. The increase of social

media click rates, and subscriber rates demonstrated that the implemented

engagement strategies are effective. DARC’s leaders ensure that they

implement activities, systems, programs, and engagement strategies to build

sustainable relationships with customers, employees, stakeholders, and the

community.

Product and Process Results

DARC provides three main programs or services where clients can

choose one or more of the products that provide educational services geared

toward acquiring knowledge of regulatory compliance, resources that

encourage donor–nonprofit engagement, and online capacity-building tools

for sustainability, compliance, and effective governance. Donor–nonprofit

relationship amalgamation, general donor services, and general nonprofit

services are the three main programs or services that are offered by DARC.

In 2021, the annual report prepared by DARC’s leaders that each of these

products/programs had successes despite the COVID-19 pandemic

environment.

Donor–Nonprofit Relationship Amalgamation

This program is geared toward engagement services between donors

and nonprofits. In 2022, DARC celebrated its 75th anniversary by hosting an

event that brought donors, nonprofits, and funders together to celebrate the

achievements of the organization, review relevant topics on trends and

advancements in philanthropy, and promote the programs that continue to

encourage building strong, authentic relationships between donors and

nonprofits. Also, DARC’s 2021 strategic goal of increasing the number of

donors that use the published list of nonprofits that attained the OCBS

certification seal by 8% was achieved. DARC’s leaders reported that 7,168

individuals accessed the newsletters, while 48,941 individuals accessed the

website to view the lists. These results were an average of 15 to 52%

increase, respectively, over the reported amounts for the 2020 results

reporting. The OCBS are the foundational benchmark elements that DARC

uses to fulfill the mission of building stronger relationships between donors

and nonprofit customers. The OCBS benchmark elements educate both

donors and nonprofits on governance practices, finances, fundraising,

communication, public expectation, legal compliance, and nonprofit sector

expectation.

General Donor Services

DARC’s 2021 strategic goal was to share information about culturally

specific philanthropy and DEI toolkit by ensuring that relevant information,

communication, and resources were made available in 30% of the platform

information provided to donors annually. DARC’s leaders reported that the

following relevant and related information was specific to philanthropy and

DEI was available: 28% on Facebook, 21% on Twitter,

30% on LinkedIn, and 55% in the DARC’s newsletter, email

correspondence, and other correspondences.

General Nonprofit Services

The OCBS are reflected in the programs and products that are geared

toward general donor services. The OCBT is one product that many

nonprofits utilize at DARC. The OCBT is an educational online assessment

tool that supports nonprofit capacitybuilding for the alignment of

governance practices and management policies that encourage sustainability.

DARC’s 2021 strategic goal was to have an 8% increase in new nonprofits

using the OCBT. In 2021, 18 new nonprofits used the OCBT, which was

only 56% of the targeted 32 new nonprofits; however, this was a 5%

increase over 2020. In addition to the OCBT, DARC provides the DEI

toolkit to aid nonprofits in expanding programs that support DEI as a part of

the culture and management policies within the organization. DARC’s 2021

strategic goal was to increase the membership subscription by 12%.

However, they exceeded subscriptions by 187%. Revenue for the use of the

OCBS has remained consistent with minimal variations, even during the

2020 -2021

COVID-19 pandemic environment (Figure 7). The DEI toolkit subscriptions

have seen the highest revenues in 2022 (Figure 8), which supports the results

that there has been a

187% increase in subscriptions over the previous year.

Customer Results

DARC’s unique structure serves two categories of customers. DARC’s two

major groups of customers are nonprofit organizations and donors in the

Midwestern states and other regions within the USA. Nonprofit

organizations that use the products and services that DARC provides have

reported positive feedback from the pre-review and postreview evaluation

included in the program process, through survey monkey technology.

DARC’s leaders reported that in 2021 despite the challenges that the

COVID-19 pandemic environment brought the nonprofit customers

understood the importance of ensuring that their organizations remained

viable by incorporating governance and accountability standards to fulfill the

missions that the leaders have established. DARC’s 2021 annual report

stated that there was a renewal rate of 94% for nonprofit clients that have

used the review process and gained OCBS certification. The 94% renewal

rate indicates the customer’s satisfaction with the programs and products that

DARC offers. The average renewal rate for all the services that DARC offers

was 83%, while the average rate of new reviews for all programs was 13% in

2021 (Figure 9). In 2021, DARC’s leaders, staff, consultants, and contractors

have served over 600 nonprofits through the OCBT and the DEI toolkit. Of

the 600 nonprofits that used DARC’s products and services, 58% achieved

the OCBS certification and reported that the review process has positively

impacted the mission accomplishment, while 90% reported that they have

implemented strategies that have enhanced accountability and transparency

within the organization.

DARC’s leaders have reported that the strategic indicator of increased

click rates on the organization’s communications, and increased social media

engagement, is a positive indication that the donor group of customers is

satisfied with the services that are offered. In 2021, the click rates for

DARC’s e-newsletter increased by 2% to 5.14%. The 5.14% is higher than

the nonprofit industry average of 2.79%.

The social media targets for the 2021 year were also exceeded. (1)

Instagram had 1,073 followers, (2) LinkedIn had a 2.77% click rate, and (3)

Twitter had a 2.04% engagement rate which was almost 88% more than the

previous year. Also, DARC’s leaders reported that they have responded to

more than 1,050 donor support calls and emails, which indicates that donors

are becoming more engaged in informed giving, nonprofit governance,

accountability, and transparency awareness.

DARC’s New Versus Renewal Average Rates 2012–2021

Workforce Results

Since the 1940s, DARC's workforce has remained generally

consistent, with a 90% retention rate. In 2021, DARC’s workforce consists

of three staff members and a 12member team of consultants and contractors.

DARC’s leaders decided to utilize the services of contractors and

consultants to carry out professional roles instead of hiring full-time staff.

The decision to use expert contractors and consultants has saved the

organization over $500,000 in employee costs (Figure 10). In 2021 the

professional fee cost was approximately $110,000. From 2020 to 2021,

during the COVID-19 pandemic environment, DARC ‘s workforce

experienced permanent staff turnover. DARC’s ED responded to the

changing economic, environmental, and social environment by moving to a

permanent hybrid workforce environment. The Charity Navigator awarded

DARC with the highest ratings in the leadership and adaptability category,

for the decision to move the workforce environment from the traditional in-

person work environment to a hybrid workforce environment. Also,

DARC’s leaders have ensured that the work culture

is representative of the DEI standards that they provide for the customers

they serve.

During the interview, each of the participants mentioned that the ED’s

leadership standards, care, and commitment have created a work

environment that supports trust, excellence, innovative solutions, integrity,

and equal opportunity. Documentation collected and analyzed indicates that

workforce selection and onboarding are cohesive with a positive work

environment. The workforce comprises individuals that have expertise and

knowledge that aligns with DARC’s mission, values, and vision. Participant

4 stated that DARC has not experienced staff turnover as it has from 2020 to

2021; however, the COVID-19 environment has impacted the staff’s

decision to leave. The workforce that remained has exhibited resilience and

has ensured that there are no significant operational disruptions. DARC’s

smaller workforce created an opportunity for the leaders to partner with

community entities and other contractual liaisons to fulfill

DARC’s mission.

Leadership and Governance Results

DARC’s senior leaders comprise the ED, the BOD, and the program

manager. The BOD is the governance body of DARC, and they are

supported by the executive and program committees. Each of the

committees ensures that governance practices are implemented, reviewed,

and continuously improved. The BOD along with the ED comprises

DARC’s leadership body; DARC’s leadership body has established and

implemented several governance, corporate, and regulatory documents;

DARC’s leadership has established effective bylaws, board governance

guidelines, employee handbook, committee charters, and strategic

framework documentation that align and uphold the mission, value, and

vision of the organization.

Charity Navigator has given DARC’s governance and leadership the

highest ratings stating that all nonprofit governance and leadership standards

have been implemented and managed effectively. The governance rating

matric that the Charity Navigator listed included: (a) board composition; (b)

conflict of interest policy; (c) board meeting minutes; (d) documentation

retention and destruction; (e) whistleblower policy; (f) having a website for

the organization that provides relevant information. The leadership rating

metrics that the Charity Navigator listed included: (a) the presence of a

mission, vision, and goals; (b) leadership development; and (c) mobilization

of the mission through the utilization of external resources.

Financial and Market Results

Nonprofit leaders are challenged to find innovative ways to source

funding to ensure sustainability. Nonprofit leaders rely on donations, usually

sourced from individual and organizational donors, as the main source of

revenue (Klafke et al., 2021). During uncertainty and market changes,

nonprofit leaders need to create other sources of income so that reliance on

donor contributions is mitigated. The authors of RDT explained that though

external factors are uncertain and unexpected, leaders who understand the

constraints and influence of the organization’s dependence on external

entities will be able to incorporate strategies to mitigate the risk that these

factors can have on the organization (Pfeffer & Salancik, 2003). DARC’s

leaders have understood that they needed to ensure that donor resource

dependency is mitigated.

DARC’s leaders have implemented fee-based educational programs

that help to mitigate dependence on donor contribution as the only source of

revenue. DARC has had a positive relationship with corporate and

individual funders that have supported the programs of the organizations;

however, since 2016 there has been a gradual decline in the corporate

support that the organizations have received (Figure 11). Each of the

participants mentioned that there have been challenges in the economic

environment in the Midwestern USA and other parts of the USA that have

negatively affected corporate social responsibility (CSR) which results in

declining corporate donor support for the nonprofit industry. Donations

from individuals have declined from 2017 to 2019; however, donations

increased slightly in 2020 and remained consistent through 2022

The OCBT and the DEI toolkit are the fees-based educational

programs that DARC has implemented to ensure that there is diversification

in the revenue streams. The technology and services are provided through a

paid contractor. DARC’s leaders have decided to keep the fees charged for

the programs at an affordable rate, however, they faced challenges in

maintaining a cost-benefit advantage (Figure 13). The revenue collected was

not enough to cover the cost of the technology contracted. DARC’s

executive leadership reviewed the challenges and decided to increase the

fees for new nonprofits that would utilize the services. Also, in 2021

DARC’s executive leaders decided to invest in the technology that would

enhance the product offerings for the OCBT and the DEI toolkit, which

meant increased cost, but also increase revenue in the long term. The

decision to invest in new technology resulted in a negative net revenue for

2021 (Figure 14); however, with the increased enrolment, there is potential

for a positive net revenue position over the next 3 to 5 years.in the coming

years.

DARC’s leaders have put other strategies in place to mitigate the

raising costs of operations. One of the strategies DARC’s leaders have

employed is to have the staff move to remote work, which meant that there

was no need for the physical location that they previously maintained. The

leaders have leased a smaller physical location which has saved the

organization 40% of the average operating cost. Also, the decision to keep

the staff composition smaller, but employ consultants and contractors, has

also resulted in operational cost savings. The Charity Navigator, a nonprofit

rating agency, has given

DARC full credit for having an effective program expense and liabilities to

asset ratios. DARC’s leaders file the required IRS Form 990 and have a

healthy solvency and a positive indication of long-term operational and

financial sustainability.

Key Themes

A thematic analysis was conducted of the data I collected from the

semistructured interviews that were conducted, the review of internal

archival records, and public forums. The key thematic themes that emerged

from the analysis included: (a) regulatory compliance, (b) internal

assessment, and (c) engagement. Pfeffer and Salancik's RDT was the

conceptual framework lens utilized to elaborate on the process and results

strengths and opportunities that DARC’s leaders have used to improve

governance processes and encourage donor confidence to increase the levels

of donations.

DARC’s operational processes for each of the three key themes

identified will be evaluated using the Baldrige Performance Excellence

Program (2023) evaluation factors: (a) approach, (b) deployment, (c)

learning, and (d) integration. The Baldrige Performance Excellence Program

defined each of the evaluation factors below:

•Approach refers to the method, appropriateness, effectiveness, and

degree that the applied approach is transferable.

•Deployment refers to whether the approach is relevant, consistent,

and used with the appropriate segments of the organization.

•Learning refers to the continuous application, innovation, and

sharing of approaches to the appropriate segments of the

organization.

•Integration refers to the alignment of the approach to

organizational needs, the measurement and improvement systems

implemented, and the strategic plans that align with the

organization’s mission, vision, and values.

DARC’s operational results for each of the three key themes

identified will be evaluated using the Baldrige Performance Excellence

Program (2023) four evaluation factors: (a) levels, (b) trends, (c)

comparisons, and (d) integration. The Baldrige Performance Excellence

Program defined each of the evaluation factors below:

•Levels refer to current organizational performance metrics.

•Trends refer to the continuous improvement rate of organizational

performance.

•Comparisons refer to organizational performance as a benchmark

with competitors in the industry.

•Integration refers to how organizational performance is applied to

potent business segments, such as customers, programs, and

strategic goals.

Process Strengths

Governance practices are those set of parameters that are one of the

primary responsibilities of organizational leaders to confer and implement in

the organization to ensure accountability, transparency, equity, fairness, and

disclosures (Shahid & Abbas, 2019). Because nonprofit leaders do not have

stringent governmental regulations like that of their for-profit counterparts,

there is a higher demand for governance practices that aligns with the

organization's mission (Adena et al., 2019). At the core of governance

practices is the knowledge that an organization’s mission, vision, and values

set the foundation for the goals and objectives for which the organization

was established. DARC’s mission is to serve nonprofit organizations and

donors by providing educational tools and resources on governance,

regulatory, and accountability standards.

DARC’s leaders have developed effective approaches for the

evaluation and improvement of governance processes that have aided in

improving relationships with key stakeholders and developing derivative

services for contributing to the continued support of the mission of the

organization. Regulatory compliance, continuous internal assessment, and

workforce, customer, and stakeholder engagement are three of the themes

that have emerged during the analysis of the primary and secondary data of

DARC. DARC ‘s leaders have key partnerships with the local government

council that establishes and monitors nonprofit organizations on the

principles and practices that govern compliance and regulatory mandates.

Each of the principles and practices is incorporated with the governance

practices of the organization, also the internal assessments that are

conducted throughout the year review the standards for the nonprofit

industry and DARC’s leaders ensure that standards are reflected in the

programs offered

to customers.

DARC’s BOD, staff, and committee members have scheduled

meetings, which are documented in the committee charter documents,

bylaws, employee handbook, and other governance documents, which

enhance engagement through effective and consistent communication.

Updates on the market, governmental, and operational standards during the

scheduled workforce meetings allow for interactive discussions which

encourage innovative implementation of changes and continuous

improvement of the governance processes.

Process Opportunities

DARC’s leaders have strategic planning and annual planning

meetings each year. During these meetings, key leadership and other

management personnel review all business segments of DARC’s operations

and performance using key indicators. The strategic plan is finalized every 3

to 5 years; leaders facilitate a strategic review session each year. Conducting

yearly strategic planning meetings allows DARC’s leaders to review

performance metrics, which provides an opportunity to consider timely

operational opportunities for competitive advantage. Employing a strategist

contractor has provided DARC with the expertise to ensure that the strategic

planning sessions are effective for enhancing the mission mandates,

evaluating trends, comparing market competitors, and creating a platform

for continuous improvement and integration.

During the last strategic planning meeting, for example, DARC’s

leaders recognized that there needed to be some changes in the fee structure

and the method of conducting reviews through the OCBT program. DARC’s

leaders decided to change from the current partnership agreement and move

to invest in a technological method for providing the service. The decision

to invest in current and relevant technology would result in a higher cost

burden, however, the potential revenue benefit would outweigh the upfront

cost over the short term. Also, the customers reported that the convenience

and interactive approach to the service delivery gives DARC’s service

standard an advantage over other competitors within the market.

Results Strengths

DARC’s leaders have reported successful results in key governance

elements inclusive of financial, engagement, workforce, customer, and

leadership metrics. The nonprofit industry was negatively affected by the

COVID-19 pandemic environment in which donations have been negatively

impacted. DARC’s financial results have shown that donations have

remained consistent and, in some cases, have increased slightly

(Figure 12). Though DARC’s staff composition was impacted negatively,

the decision to employ the services of consultants, on a needs basis, resulted

in savings of over $500,000 in staff costs from 2019-2021. Governance

indicators have reported successes. DARC’s leaders have reported that they

have met or exceeded the following strategic priorities and goals: (a)

increased donor engagement, through increases in social media click rates,

and subscriber rates; (b) increase in new nonprofits using the OCBT and

achieving OCBS certification; (c) achieving a 95% renewal rate for the

programs offered; and (d) an increase in the number of nonprofits

subscribing to the DEI toolkit.

With increased competition for financial resources within the

nonprofit industry, leaders need to find innovative ways to attract and retain

donors (Lacruz et al., 2019; Seo, 2020; Tsiros & Irmak, 2020). The authors

have suggested that some of the innovative ways that nonprofit leaders can

attract and retain donors include: (a) specialized marketing campaigns, (b)

providing multiple secure and trusted methods for donating, (c) efficient

donor engagement strategies, and (d) recognition initiatives. DARC’s

leaders have been successful in creating innovative ways to attract and

retain donors and nonprofit customers who employ the paid programs and

products that DARC offers. DARC’s leaders have created an annual event

that recognizes donors and provides a forum for disseminating industry

information. DARC’s leaders have also enhanced the programs to

encourage engagement, convenience, and additional resources.

Results Opportunities

Though DARC has many areas of results success and they have had

an impact on the community that they served for over 70 years, there are

always opportunities to improve on the results. DARC’s leaders have

established a mission for building strong and vibrant relationships between

donors and nonprofits to enhance and empower communities, while the

values are to forge trust, strive for excellence, innovate, exhibit integrity,

and be leaders in the nonprofit industry. DARC’s leaders have strategic

opportunities to expand their service standard reach to donors, funders, and

nonprofits, not only in the Midwestern USA but to expand nationwide. With

DARC’s positive reputation for over 70 years and being the only nonprofit

that provides educational services for both donors and nonprofits, the

leaders have a competitive advantage to capitalize on the resources,

partnerships, and community affiliations to promote philanthropic

advancements for that region and beyond.

The cultural climate in the USA has been changing, and many

compliance regulations have been implemented that require compliance

with the changing landscape.

DARC’s leaders have an opportunity to promote the DEI toolkit to

nonprofits, this strategy will create an opportunity to diversify the revenue

structure, reduce resource dependency, and encourage regulatory

compliance. Consequently, DARC’s leaders can also use this culturally

sensitive platform to reengage corporate and governmental agencies to

support the program through CSR and increased donations. Also, the

opportunity to enhance the technical programs to encourage customer

engagement is available with the positive feedback that DARC’s leaders

have received from those customers who have enjoyed the interactive,

convenient, and engaging service platform.

Project Summary

The main source of a nonprofit organization’s financial resources is

donations.

Many factors influence an individual’s or organization’s decision to donate

to a nonprofit organization. The existence of effective governance practices

in the organization has been identified as one of the main contributors to

positive donation behavior (Becker et al., 2020; Seo, 2020); therefore,

governance practices have been recognized as a mitigating strategy for

combating agency problems, increased instances of fraud, embezzlement,

and financial loss (Abu-Khadra, 2020). Donor confidence has been

negatively affected by reports of financial impropriety among nonprofit

organizations (Blouin et al., 2018), as such, nonprofit leaders have

recognized the importance of developing strategies to ensure that effective

governance practices are implemented to encourage potential and existing

donors to contribute to the nonprofit’s mission accomplishment.

In this single case qualitative study, I analyzed DARC’s data to aid in

answering the research question: What strategies do nonprofit leaders use to

improve governance processes and encourage donor confidence to increase

the levels of donations? Using

Pfeffer and Salancik’s (1978) RDT as the conceptual framework and the

2023-2024 Baldrige Excellence Framework (Baldrige Performance

Excellence Program, 2023) systems-based management and leadership

elements, I analyzed the primary and secondary data collected from

DARC’s leaders to measure, analyze, and benchmark the strategies that

DARC use to improve governance processes and encourage donor

confidence to increase the levels of donations. The key themes that emerged

from the analysis of the data attained from DARC’s four senior leaders’

semistructured interviews, the internal archival records, and public forum

information are (a) regulatory compliance, (b) internal assessment, and (c)

engagement.

Nonprofit organizations depend on external resources to remain

sustainable (Ilyas et al., 2020). Understanding how the improved

effectiveness of governance processes contributes to increased levels of

donations can impact how organizational leaders make decisions (Zhou &

Ye, 2021). When leaders implement strategies to improve the governance

processes of the organization, they will be able to effectively manage the

effects of external dependency and donor confidence on the levels of

donations received. Nonprofit leaders will be able to ascertain effective

approaches to evaluate and improve governance processes, improve

relationships with key stakeholders, and develop derivative services for

contributing to the continued support of the mission of the organization.

Some of the strategies that have been identified to improve

governance practices to improve the levels of donations align with Pfeffer

and Salancik's (2003) RDT recommendation and the key themes derived

from the data analysis conducted. Some of the key strategies include

resource diversification, interorganizational action, organizational growth

action, regulatory compliance, and engagement. The reported findings

derived from the study have the potential to enrich organizations’ positive

social contribution through increased altruistic giving by members of the

community for enabling expansion to benefit communities’ citizens.

Contributions and Recommendations The

nonprofit sector has been plagued with reports of impropriety,

mismanagement, and a lack of strategic direction. This study has provided

relevant and important details regarding effective strategies that can assist

nonprofit leaders in mitigating the adverse effects of external

environmental dependence by implementing governance processes to

encourage donor confidence and increase the levels of donations. The

findings of this study have provided nonprofit leaders and key

stakeholders with three pertinent recommendations that will contribute to

the sustainability and mission accomplishment of the organizations.

Researchers and scholars can use the findings, recommendations, and

information from this study to enhance the body of literature about

governance processes, donor behavior, and resource dependence.

Application to Professional Practice

Nonprofit leaders mainly depend on donors for funding to remain

sustainable and need to identify and adapt effective strategies that can

encourage donor confidence to increase the levels of donations. Nonprofit

organizations are essential to the U.S.

economy, representing 5.7% of the nation’s workforce; individual donors

contribute to over 70% of the $466 billion contributed to charitable

organizations in the U.S. in 2020 (Kamatham et al., 2021). Though the

reported figures seem significant, that amount could be more. Donors are

motivated to contribute to a nonprofit's mission for varied reasons; the

hesitation to contribute resides mainly due to reported impropriety in the

nonprofit industry. To compound the issue the federal government does not

require nonprofit organizations to comply with many of the regulatory

requirements that for-profit organizations have to comply with (Adena et al.,

2019; Nguyen & Soobaroyen, 2019). Governance practices have been

identified as one of the main contributors to donation behavior (Becker et

al., 2020; Seo, 2020), and also a mitigating strategy for combating agency

problems, increased instances of fraud, embezzlement, and perceived

financial impropriety (Abu-Khadra, 2020). Consequently, nonprofit leaders

need to have access to pertinent information that will provide fundamental

tools to ensure that the organization remains viable and contribute to

sustainable economies of scale. Also, nonprofit leaders will have access to

data that outlines and explains how to implement effective strategies that

will contribute to the fulfillment of the essential social services that the

communities need.

The findings and recommendations reported in this study can assist

nonprofit leaders to identify effective governance practices as a mechanism

that encourages potential and existing donors to contribute to the nonprofit’s

mission accomplishment. Many nonprofit organizations are established to

satisfy community needs; however, many nonprofits fail within the first 5

years of operations (Molk & Sokol, 2021). Researchers have identified

governance and managerial incompetence as one of the major reasons for

the nonprofit lack of sustainability. The findings of the study can add value

to nonprofit leaders and provide additional resources to understand the

importance of implementing effective governance practice as a value-added

element for sustainability and to encourage positive donor behavior to

increase the levels of donations they can receive. Also, I explored many of

the mitigating elements of RDT that can aid in educating nonprofit leaders

to utilize strategies that can reduce the instances of resource dependence that

can negatively impact nonprofit sustainability.

Implications for Social Change

This study has significant implications for social change. The findings

and recommendations of this study have the potential to equip nonprofit

leaders with effective strategies to improve governance processes and

encourage donor confidence to increase the levels of donations. Nonprofit

organizations are essential to society and the local communities they serve

(Kamatham et al., 2021). Employees, donors, management, consumers, and

key stakeholders comprise the social influencers of an organization (Amis et

al., 2020; Liu et al., 2021); therefore, the actions, activities, and conduct of

each of these groups contribute to the wealth of the social structure of

society. Each of the social groups contributes to the success and

sustainability of a nonprofit’s contribution to society. Nonprofit leaders that

implement governance practices, engage key stakeholders and ensure

regulatory compliance will affect the social change required to improve the

lives of the people in the communities they serve.

When nonprofit leaders take intentional steps to improve and

implement effective governance practices, they will be able to remain

sustainable, and effectively serve the communities through the mission the

leaders have established, they will be able to add value and meet the needs

of society. Also, the entities and individuals that support the mission of the

nonprofits in the community, cultivate a culture of philanthropy, improve

relationships with key stakeholders, and develop derivative services for

contributing to the continued support of the mission of the organization. The

reported findings derived from the study have the potential to enrich

organizations’ positive social contribution through increased altruistic

giving by members of the community for enabling expansion to benefit

communities’ citizens.

Recommendations for Action

Recommendations for action are integral following the completion of

a research study highlighting the researcher's findings from data analysis.

This section of the study expounds on recommendations that can be

beneficial to the leaders of DARC and other nonprofits in enhancing the

strategies that can be employed to improve governance practices to increase

the level of donations. The recommendations for action is organized using

the thematic analysis of the data collected in this study. The key thematic

themes that emerged from the data analyzed were regulatory compliance,

internal assessment, and engagement.

Regulatory Compliance

One of the key components of governance practices is regulatory

compliance (Lu et al., 2020). Many of the challenges that nonprofits

experience in maintaining and attracting donors are a direct result of

noncompliance with federal and local regulations (Heffernan et al., 2018).

The findings of the study highlighted that one of the effective strategies that

nonprofits can employ to enhance governance practices is to ensure that

regulatory compliance is upheld and incorporated. Nonprofits incorporated

as charitable organizations adhere to Section 501(c)(3) of the US IRS Code

of 1986, requiring an annual filing of Form 990, which is publicly available.

Though nonprofit organizations do not have a stringent regulatory

compliance structure as for-profit organizations, filing Form 990 is an

effective governance practice that demonstrates accountability,

transparency, and trust (Abu-Khadra, 2020). Public financial disclosures

have a positive relationship with the donor’s response to charitable giving

(Rossi et al., 2020). Incorporating the annual filing of Form 990 is one

effective strategy for enhancing governance practices to encourage positive

donor behavior resulting in increased donations.

Nonprofits incorporated to conduct business in a specific state, in the

USA, usually have local governing bodies that regulate the operations and

practices of nonprofits. The findings from this study highlighted that

compliance with state regulations is another effective strategy that

nonprofits can employ to enhance governance practices to encourage donor

confidence and increase the levels of donations. DARC operates in the

Midwestern states that have a governing council that has established a set of

accountability standards and principles that support the federal IRS code for

governance principles for the nonprofit industry. A nonprofit’s reputation

can encourage trust from supporters but does not guarantee donations;

however, a good reputation is an effective mediating factor that positively

influences donor behavior

(Schultz et al., 2019). An organization’s reputation contributes to an

individual’s cognitive perception resulting in value attachment, which is a

positive determinant of donor behavior (Coupet et al., 2020). Nonprofit

leaders that ensure that state regulatory compliance is incorporated within

the internal requirements for management practices are taking practical

steps toward developing a positive public reputation which will add to

effective governance practices and encourage positive donor behavior.

Internal Assessment

Though nonprofit organizations depend on donors to remain

sustainable, resource dependence is one of the major challenges to a

nonprofit’s sustainability. Pfeffer and Salancik's (2003) RDT outlined that

nonprofit organizations that develop strategies, such as interorganizational

actions or internal assessments, can mitigate the adverse risk of external

dependence. The findings of this study highlighted that strategic planning is

an effective and mitigating strategy that enhances governance practices,

which encourages positive donor behavior to increase the levels of

donations. Nonprofit leaders who conduct strategic planning activities, such

as a SWOT analysis; processes and results strength and opportunity

assessments (Baldridge Excellence Framework, 2023); and annual planning

sessions, can signal intentional efforts to ensure sustainability.

Another effective recommendation arising from the findings of this

study highlighted is that nonprofit leaders who develop innovative strategies

to reduce resource dependence, such as resource diversification and growth

actions (Pfeffer & Salancik, 2003) through internal assessments, develop

effective tools for sustainability, growth, competitive advantage, and

engagement. DARC’s leaders have effectively begun the process of

developing programs and products that offer resource diversification,

growth strategies, competitive advantage, and engagements. Other

nonprofits can benefit from the strategies that DARC’s leaders have

employed and are improving, as an effective tool for improving governance

practices that encourage donor confidence to improve the levels of

donations, through the effective practice of conducting continuous internal

assessments.

Engagement

Nonprofit leaders can employ engagement strategies to build

relationships for all interest groups. Donor, customer, workforce,

stakeholder, and community engagement is an effective strategy that

nonprofit leaders can employ to build relationships, encourage donor trust,

and facilitate competitive advantage (Freudenreich et al., 2020). The

findings of this study have supported engagement as an effective strategy

for improving governance practices to encourage donor confidence to

increase the levels of donations. Some of the innovative ways that nonprofit

leaders have implemented to support donor engagement included

specialized marketing campaigns, providing multiple secure and trusted

methods for donating, efficient donor engagement strategies, and

recognition initiatives. DARC’s leaders have incorporated many of these

innovative strategies to encourage donor engagement resulting in increased

donor participation. Nonprofit leaders that also focus on strategies to

encourage effective customer, workforce, community, and stakeholder

engagement have reported positive operational results (Coupet et al., 2020).

Communication, social activities, annual customer events, public reporting,

interactive social media platforms, and an organization's website are some

of the major strategies for promoting engagement across the nonprofit’s

interest groups.

The findings of this study will be used to contribute to the body of

literature about nonprofit organizations, governance processes, donor

confidence, donations, and resource dependence. The recommendations

highlighted in this study will be disseminated as a relevant source for

nonprofit leaders and management personnel to be trained in professional

leadership conferences, internal training opportunities, and coaching

opportunities. The findings in this study are not exhaustive and will require

other research opportunities.

Recommendations for Further Research

This study has limitations, therefore asserting that the findings of this

study may not represent all geographical, classification, structure, or size of

nonprofit organizations in the industry. This doctoral study was a qualitative

single case exclusive to one donoramalgamation nonprofit organization, in

the Midwestern United States. Pfeffer and Salancik’s (1978; 2003) RDT

was the conceptual framework that was used to frame the findings of this

study’s established research question.

The value of this study can be added to the body of research on the

topic of governance practices as an integral factor in donor behavior that

impacts the levels of donations received. Also, considering the element of

Pfeffer and Salancik’s (1978; 2003) RDT can be beneficial for nonprofit

leaders to consider mitigating strategies to counter the adverse effects of

external dependence. Researchers interested in the topic of governance

practices, resource dependence, and donor behavior are welcome to conduct

further research to enhance the body of literature available to nonprofits or

other business leaders that can benefit from additional knowledge for

enhanced tools for encouraging sustainability and competitive advantage.

Reflections

Education is a change in behavior and mindset. Mandela (1994) stated

that education is one of the major drivers for personal growth and

development, which results in a catalyst for positive global change.

Completing this doctoral study has enhanced my growth and changed my

mindset. I have faced several challenges, but I have also had many victories

along the way. The completion of this doctoral journey is not only the

fulfillment of a childhood dream but represents a changing narrative for my

children and future generations.

The Walden University doctoral consulting capstone allowed me to

be a scholarconsultant. I enjoyed working with my client organization and

expanding my consulting skillset. The Walden University doctoral

consulting capstone introduced me to the Baldrige Excellence Framework, a

practical and effective systems-based managerial tool, that encourages

interactive and personalized value-added strategies for enhancing

organizational performance. The structure of the Walden doctoral program,

though online based, was surprisingly personalized. The support that I

received from the faculty, staff, and colleagues was beneficial to my success

in completing this doctoral study. I have become more adamant that success

is possible, and change is inevitable. I am resolved to be a change agent

with the knowledge that can effect positive social and economic change.

Conclusion

This study was aimed at providing comprehensive knowledge of how

governance processes can contribute to positive donor behavior to increase

the levels of donations. Nonprofit organizations provide valuable services

that meet the needs of a community and contribute to over 15% of the U.S.

economy. Nonprofit leaders depend mainly on donors to help support the

organization in fulfilling the mission for which the organization was

established. Nonprofit organizations do not have the same stringent

governmental regulations as their for-profit counterparts do; consequently,

there have been many reports of financial and operational impropriety.

Many nonprofit organizations have struggled to remain sustainable or have

been discontinued because of the lack of donor support due to the negative

reports of misappropriation of funds or operational inefficiencies.

The findings of this study have highlighted the need for nonprofit

leaders to find effective strategies to change the negative perceptions that

donors have had, increase trust and confidence, and engagement, to

encourage continued support of the mission of the organizations. Identifying

strategies to mitigate the adverse effects of resource dependency, and foster

a positive reputation is important to a nonprofit’s sustainability and growth.

Nonprofit leaders can establish and implement effective governance

practices, such as regulatory compliance, transparency, accountability, and

engagement to encourage positive donor behavior to increase levels of

donations. Nonprofit leaders are encouraged to incorporate additional

strategies that can mitigate the adverse effects that external resource

dependence can cause. Also, the findings of this study can be beneficial to

nonprofit leaders, in providing them with major mitigating strategies such as

innovative revenue diversification, internal assessments, and partnerships to

counter the adverse effects of resource dependence.

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