Nonprofit Organization Governance

Organizational governance has become a popular and important topic in the nonprofit sector literature. This review focuses on the governance of non-membership, paid-staff nonprofit organizations (also called nonprofit agencies), which are characterized by a hierarchical structure, where the board has the ultimate power and the responsibility to ensure that governance functions are carried out. Such agency boards are usually self-perpetuating, unlike the situation in voluntary membership associations, where the members usually elect the board. We contribute to the literature on the governance of nonprofit organizations in three major ways. First, we discuss research themes identified by previous review articles, analyze empirical and conceptual contributions from the recent nonprofit organization governance literature, and identify a number of governance challenges for nonprofit organizations. Second, we present a wide array of theoretical perspectives from different disciplines that may be useful when studying the governance of nonprofit organizations. From a practical viewpoint this is important, as it may assist researchers in the theoretical framing of their papers and help them in the formulation of theory-based hypotheses. Third, we integrate a number of theoretical perspectives by using a paradox perspective. We focus on four important contemporary governance challenges in nonprofit organizations: (1) stakeholder accountability, (2) environmental dependence, (3) volunteer reliability, and (4) board group dynamics. By using a multi-theoretical approach to analyze the ambiguities, paradoxes, and dilemmas associated with these governance challenges, we provide more general theory-based frameworks for the governance of nonprofit organizations than currently available in the literature.