*Unit 5: Leadership in the NFP Sector

Question 1

How are the activities in the NFP sector different from those in the public and private sectors? Where do you see overlap or blurring of boundaries?

Answer 1

NFP, voluntary, or third sector activities are intended to serve their stakeholder community through services and advocacy. This is similar to the public sector except that it usually involves citizens serving their own communities/groups rather than the public with the range of considerations that entails. And differs from the private sector in that they do not consider profitability or products/entertainment rather they focus on societal needs. Any earnings are cycled back into the organization unlike in a private-sector corporation where earnings or profit benefit owners and investors.

This line between NFPs and the private sector are becoming unclear due to increasingly fewer competitive and restrictive funding opportunities. They are relying more on user-pay principles which put pressure on stakeholders to fund and use the goods and services the NFP provides.

NFPs also have to compete with private corporations and the public sector for qualified candidates. They also must rely on donations, grants, and sponsorships to operate which are precarious financial streams and can come with stipulations which may or may not align with the NFPs mission and current focus. For example, as NFPs are often reliant on government funding, there has been a common mission drift as NFPs align future projects with current government platforms. The NFP sector has come to deliver public services for the public sector while receiving less and more competitive funding. This has caused some NFP organizations to adopt blended sector strategies such a user-pay models seen in PPPs to remain viable.

Question 2

Discuss 2 of the emerging trends in the NFP sector with reference to the behaviour of leadership and the role of organizational culture.

Answer 2

Cave (2016) 5 trends in NFP sector.
1. Investment in leadership capacity
2. emphasis on decent work and best practices in HR
3. social finance and social innovation tipping pt.
4. shared platforms and admin outsourcing
5. new frontiers for tech and data management

1. Academic institutions are increasingly providing NFP management courses and leadership training opportunities for young professionals. Becoming more accessible for those in rural areas (e.g. AU, Northern Lakes, and Portege in AB, and other online/satellite institutions). This supports leadership development in current and future leaders who are currently working in their field and may support diversifying leadership in this sector. Typically leadership has been aging, white, females in NFPs.
2. In the modern paradigm of leadership attention is being directed at the idea of decent work particularly in the NFP sector where client outcomes for well-being aren’t extended to employees. “Organization culture should reflect the values that are promoted to stakeholders” (course content). There is a prevalence for temporary, contract, and other precarious work with the reliance on unstable funding streams. Minimum wage increases also factor into an investment in decent work as many NFPs struggle to pay much above minimum wage to begin with.

“Effective culture includes having skilled leaders and managers that place value on
employees and work to create the conditions that will support them in achieving greater impact.” (Van… p. 10)

Question 3

Describe the challenges of leadership in the NFP sector as they relate to innovation and the recruitment and development of [the?] same

Answer 3

This sector has precarious funding streams and does not have the financial capability to draw in highly qualified candidates and promote innovation and technology. The technological advancement afforded to the private sector (and the public sector often by way of PPPs) is not accessible for the tight budget of NFPs. In this way these organizations may lag behind private and public sectors in streamlining work through technological innovation or in attracting highly qualified and experienced workers.

Question 4

Why is social enterprise grassroots phenomenon? What are three factors that contribute to its success and describe their impact.

Answer 4

because it is created with the intent to solve a specific issue. The purpose of the business serves a specific purpose in the community and returns funds to support that purpose in a circular fashion directly by and for the people who need it.
Erosion of the welfare state and promotion of self-sufficient communities has meant an increasing focus on social enterprise to fulfill the social needs of society.

Question 5

What role does legislation play in supporting innovation and sustainability in the NFP sector?

Answer 5

Legislation can support innovation and sustainability in NFPs by providing more funding streams with the intent of improving these areas.

Question 6

Stakeholders

Answer 6

1. Stakeholders are any people who are impacted by the operations of a governance system - whether this is a government, institution, or corporation. They include citizens, workers, clients, consumers, investors, and more. In the globalized and digital world, stakeholders also extend to local and Indigenous people directly affected by the actions and operations of an entity as well as those who demonstrate an interest in these operations and outcomes including social media followers, activists, and the media.
2. Stakeholders in the modern paradigm of leadership and governance wield more power than ever before.
3. Leaders who intentionally engage with stakeholders, collaborate and consult with them to improve decision-making are more effective.

Question 7

Social enterprise

Answer 7

1. Social enterprises fulfill a business purpose and solve societal needs through their commercial activities. Business activities contribute to the revenue while also achieving benefits to a particular community.
   Unlike CSR because they define a specific issue to resolve with their business rather than considering their impact after/alongside a separate intent of the business.
   Goods and services are directly linked to the values and mission of the host NFP (e.g. thrift shops, stores that employ persons with disabilities, etc.)
2. 3.

“While the target customer is attracted to the goods and services provided, these goods and services have a direct link to the values and mission of the host NPR. Thrift shops and furniture stores that employ people with developmental disabilities are examples of this kind of enterprise.”

Question 8

Social entrepreneurship

Answer 8

1. Social entrepreneurs are guided by values and seek innovative ways to drive change. They use business techniques to develop, fund, and operationalize solutions to defined problems.
2. 3.

Question 9

Social capital

Answer 9

1. the relationships between those within an organization and/or an organization and their stakeholders or other external resources that can provide opportunities for collaboration and consultation
2. The modern paradigm of leadership focuses on behaviours that improve these relationships and the benefits of this
   3.

Question 10

Decent work

Answer 10

1. Decent work refers to valuing individuals who work in the sector by offering benefits, training and development opportunities, and a commitment to a good work/life balance. “Opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity” (Van Ymeren & Lalande, 2015).
2. Issues with unemployment and growing rate of temporary and contract employment may be addressed through the concept of decent work.
3. NFPs mission focuses on outcomes for clients without consideration for these same conditions for employees. This causes the turnover and precarious work seen in the NFP sector and provides setbacks for the overall impact of organizations. By focusing on decent work the outcomes for employees and the organization are improved.

“From a values-based leadership perspective, however, a commitment by employees to the organization’s vision and mission must be reciprocated by an organizational commitment to employees. If that commitment is not reciprocal, organizational sustainability is difficult” (course content).

Question 11

Capacity building

Answer 11

1. fostering knowledge, skills, and behaviours in all employees at all levels to support collaboration, leadership development, and succession planning
2. important part of leadership behaviours and actions in the modern paradigm of leadership in all sectors
3. there has been limited abilities for capacity building with a high turnover of staff and a lack of formal development opportunities in rural areas or for those currently working full time as well as continued homogeneity of NFP boards.