Are Nonprofit Organizations Inherently Dysfunctional?

Why nonprofit organizations are vulnerable to bad management and hypocrisy

Posted Sep 26, 2011

  • A large trade association is stung by accusations from staff that it practices racial and sexual bias. Anger and resentment erupt when a senior VP is threatened with a lawsuit.
  • A public interest organization engaged in social justice advocacy is confronted with staff allegations of hostile, abusive management practices. "We're all committed to our mission," its director tells me, "so we shouldn't be having these kinds of problems."
  • A humanitarian organization witnesses increasing dysfunction of a senior staff member. Management time is swallowed up trying to deal with the person's declining performance, absenteeism, and erratic behavior toward coworkers. The CEO doesn't know what to do. Fire the person? Get him help? He asks me "How do we balance compassion for this person with our need to carry out our work?"

All organizations want to be successful, whether for-profit businesses or those in the non-profit world, large and small -- such as trade associations, humanitarian government contractors, advocacy groups or government agencies. All of them grapple with new challenges emerging from our insecure and shifting economic, political and cultural environment. The later also includes growing workplace diversity and changing attitudes about career and leadership. But organizations in the nonprofit realm are especially vulnerable to problems like the examples above. That's partly because their mission is often at odds with the behavior of its employees and leaders. Increasingly, that clash is reflected in an intertwined mixture of personal conflicts and dysfunctional organizational management.

Several new circumstances contribute to the blend of personal and organizational conflicts that nonprofits deal with today. For example, they face intense competition for funding in the new economic climate. Some operate within a political culture that's overtly hostile to their mission, such as the expressed desire of some Republican politicians to abolish the EPA or FDA. They've tried to claim that advocacy groups promoting clean air, clean water, or public safety in food products harm the economy, contrary to fact.

One consequence is that nonprofit organizations recognize the need to become more efficient and focused; and need to apply management and fiscal practices from the for-profit realm. Such strategies are good steps when they work. But they can also create new, confusing conflicts for the organization as well, if new, "business-type" practices appear to contradict the organization's mission and values. That can generate confusion or suspicion among staff regarding the leadership's intent and trustworthiness.

Moreover, a range of career conflicts often occur among employees. For example, many are attracted to an organization's ideals, especially those that with an advocacy or humanitarian mission. But over time, they may become increasingly motivated by career, financial and personal goals that are limited by virtue of working within such organizations, especially those with limited budgets and few opportunities for career advancement. That can create conflicts between personal desires and ideals.

The leadership of nonprofit organizations often makes the mistake of assuming they're immune to any of these conflicts simply because they're committed to missions they believe in. But no organization today is immune to the larger forces impacting our society. One example: People attracted to working for economic or social justice organizations nevertheless want and expect a positive management culture and collaborative work-place. The rising orientation to work and career that I've described as the "4.0" career orientation includes wanting greater meaning and purpose in work, and having more integration between work and personal life. The latter is especially true among the younger generation of workers. Moreover, women and minorities expect that equality and respect will be actually practiced, not just listed as principles in a mission statement.

All of these issues directly affect a person's well-being, work relationships, and creative energy in the workplace; often more so in nonprofit organizations because explicit ideals are embodied in the organization's very purpose and mission.

What Helps?

Successful dealing with problems that impact nonprofit organizations include good fiscal and organizational leadership, and programs that support ongoing learning and development of employees. But especially important is linking the ideals of the organization's mission with positive, supportive management practices. Ironically, what often fails to help is bringing in an organizational consultant to restructure communication and management systems. Or, asking the employee assistant program or human resources office for help when there's an employee or executive of the organization who appears emotionally troubled, dysfunctional or abusive. Either approach may either be ineffective, or even make matters worse.

Here's why: Your typical management and organizational consultants don't necessarily share the same values or ideals with the nonprofit organization that's asking them for help. That's often true for those engaging in advocacy-oriented or ideologically committed causes. Consultants might recommend changes or restructuring in areas that clash with organization's values, mission or image of itself. Charges about "selling out" the mission for the sake of organizational "efficiency" may result. The consultant may not have been tuned-in to this possibility.

When a member of the staff appears out of sync with the culture of the organization, and/or seems to be dealing with personal troubles that undermine working relationships, a different kind of challenge exists. Referral to the employee assistance program or to the organization's wellness center usually miss the mark, in terms of identifying the source of the problem and what could help. An executive coaching program may not address the source of the work-related conflict, either. Consequently, no change results, or the problem may get worse.

The challenges, here, include separating out conflicts that are a situational response to something work-related from those that reflect some disturbance within the person, independent of work; identifying when the two are, in fact intertwined; and knowing how to best deal with any of them.

When I began working with the link between work and behavior issues a few decades ago, confusion around understanding these challenges was the norm. Today, it's better, but not much. Most managers and leaders -- as well as most mental health practitioners and business consultants -- lack sufficient understanding that the management culture, career conflicts and desires, and minority and gender diversity all impact and shape a person's emotional attitudes and behavior. They can exacerbate old vulnerabilities, mask conflicts, or create new ones.

Although nonprofit organizations face unique issues, what does help is a version of what companies in the corporate world need to do for effective dealing with their own people-organization conflicts. An important first step in either world is commitment to self-examination -- self-knowledge, on the part of managers and leaders. In the non-profit world, that means confronting the gaps that may exist between the organization's purpose and mission and those embodied in "real time;" that is, in those reflected in its leaders' actual interaction with and management of employees. Many nonprofits ignore this gap, or think it's irrelevant. And then they're flummoxed when they're accused of contradictions between the organization's actual workplace culture and what it presents to the outside world.

It's also crucial to become aware of and embrace the fact that people want a positive, creative, energized, and learning-oriented workplace culture. Opportunity for growth and development, and for having an impact through work are significant drivers; as are wanting a culture of respect, recognition, teamwork, and creative opportunity. This orientation isn't nullified just because the person works for a mission-driven or service organization.

Today's workers repudiate arrogance, authoritarian behavior and insensitivity on the part of managers -- even though they may share the same ideals or ideology. I witnessed an example of this recently when the young staff and interns of a small nonprofit rebelled against the executive director's old-style "command and control" management, and complained en masse to the Board of Directors. There are many nonprofits whose values and mission are completely at odds with the tyrannical behavior of their leaders, who would easily qualify for a listing in "Worst Bosses in America."

When a consultant is brought in, his or her own perspectives and values need to be in synch with those of the organization. The consultant's experience and savvy dealing with the link between personal and organizational conflicts is relevant; as is the consultant's point of view regarding sustainable practices, social responsibility, transparency and related issues.

The bottom line is that the successful nonprofit organizations -- whether small advocacy groups, large charities or foundations, USAID contractors, trade associations, or professional membership organizations -- give more than lip-service to the developmental needs of staff as well as to current anxieties and uncertainties that affect everyone's work and career. The most successfully functioning nonprofits know they need to practice their own ideals inside the organization, not just in their work within the outside world.

Blog: Progressive Impact

Website: Center for Progressive Development

© 2011 Douglas LaBier