A contingency approach to nonprofit governance

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Abstract

A number of contingency factors may be relevant for effective nonprofit organizations and their boards. Although all boards must fulfill certain critical roles and responsibilities, strategic choices can be made about adopting different governance configurations or patterns. These choices can be meaningfully informed by understanding organizational contingencies such as age, size, structure, and strategy—and, even more important, by external contingencies and environmental dimensions such as degree of stability and complexity. This article extends or layers contingency thinking beyond its traditional focus on an alignment between the external environment and the organization's structure to focus as well on the alignment of the organization's governance configuration with its structure and environment. Structural contingency theory in general, and specifically within nonprofits, is reviewed. Two cases are presented of organizations that used an approach based on contingency theory in an action research process to examine and change their governance configurations. The steps they followed may help other nonprofits adapt their governance structures and practices and fulfill their responsibilities for board assessment and reflection.

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