Non-Profit Institutions: a delicate balance between values, business orientation and accountability. Evidence from Italy

Basic theories and literature review The Non-Profit phenomenon is a topic conceptually much debated by scholars, both at national and international context (DiMaggio & Anheier, 1990; Salamon & Anheier, 1996; Giddens, 1998; Anheier & Kendall, 2001; Powell & Steinberg, 2006; Bronzetti, 2007; Gidron & Bar, 2010; Ishkanian & Szreter, 2012; Salamon, 2012; Anheier, 2014): “Non-Profit sector”, “third sector”, “voluntary sector”, “social economy” or “social enterprise” are just a few examples of the wide range of terms that can be used to describe a diversity regarding: - its real manifestations, - subjects involved, - objectives pursued. Of course, no one of these terms and correlative definitions is exhaustive to a universal description of the theme but, at the same time, each one of them may be potentially usefulness regarding the part of reality to describe (Anheier, 2014, p. 61). In this sense, according the purpose of this research work, we can start from a structural- operational approach (Salamon & Anheier, 1992) which is focused on basic structure and operation of Non-Profit Institutions (NPIs). More specifically, this definition is based on five characteristics of NPIs, of which the most important one for this study is Non-Profit-distributing criterion: ‘[...] nonprofits ensure that whatever surplus revenue might be generated is devoted to their mission and activities and is not distributed to their owners, members, founders, or governing board. [...] Thus, nonprofits organizations, unlike private businesses, do not exist primarily to generate profits, either directly or indirectly, and are not primarily guided by commercial goals and considerations’ (Anheier, 2014, p. 73). The high dynamism of the phenomenon we are trying to describe is demonstrated by many recently and new concepts which seems to be useful to do this, like “civil society” and “social capital”: in this respect, some Author underlines that “civil society” (Gramsci, 1971; Etzioni, 1993; Gellner, 1994; Putnam, 2000; Anheier, 2001; Keane, 2009) represents the macro- infrastructure where NPI operate; while “social capital” (Coleman, 1990) refers to specific characteristics and actions of them: ‘In other words, these concepts are the pillars of an approach that tries to go beyond the state versus market perspective that dominated the social science thinking and policymaking for much of the twentieth century’ (Anheier, 2014, p. 94). In this sense, the explanation of why the organizations exist lies in many theories most of which are relatively recent (DiMaggio & Anheier, 1990; Ben Ner & Gui, 1993; Hansmann, 1996; Rose- Ackerman, 1996; Salamon et al., 1999). Concerning the objectives of this research, particularly relevant are the Trust-related theories (Arrow, 1963; Nelson & Krashinsky, 1973; Hansmann, 1987; Ortmann & Schlesinger, 2003) and the Entrepreneurship theories (James, 1987; Rose- Ackerman, 1996; Dees et al., 2001) which seems to pose a crucial question: whether market economies are aimed at profit, why are there some organizations that decide not to foresee profit as a priority of their system of values? Trying to answer this question, we need to point out that NPIs are “Non-Profit-distributing” organizations (although, not “Non-Profit-making”) (Anheier, 2014, p. 196) and, mainly, they are built on a very deep value system which necessarily influences their organization and performance. These two features imply that NPIs appear to be organizational entities that must coexist in a conceptual space that is intermediate between business and public government; furthermore, their value system imply a very complex performance behavior because the achievement of their goals is conditioned by values pursued within their mission and vision (Kramer, 1981, 1987; Najam, 1996; Zimmer, 1996; Toepler & Anheier, 2004): politics, religion, ethics, voluntarism, philanthropy, compassion are just some example. Given the above brief considerations, it is clear how complex the management of NPIs can be. Furthermore, in this perspective, Non-Profit literature has highlighted the need for NPIs to be more “business-like” oriented: many recent writings (Dart, 2004; Austin, 2000; Brinckerhoff, 2000; Frumkin & Andre-Clark, 2000; Moore, 2000; Weisbrod, 1998) ask for almost a necessity of a social entrepreneurship (Emerson & Twersky, 1996) or to employ for-profit tools and strategies to gain success in Non-Profit Sector (Kearns, 2000), although without declining the specific characteristics of that orientation. Undoubtedly, NPIs are currently facing increasing uncertainty, especially in financial matters (Deakin, 1995; Bowman, 2011). Consequently, these types of organizations manifest a great need for managerial techniques (Drucker, 1990): despite for-profit organization, in Non-Profit Sector measuring of performance could be very hard. Thus, the real question could be: NPIs may face an obvious confusion because of the absence of traditional for-profit price mechanisms that are usually helpful to balance revenues and expenditures, supply and demand, or goals with their activities as in other sectors (Anheier, 2000). This confusion, together with the heterogeneous nature of NPIs (DiMaggio & Anheier, 1990; Skelcher & Smith, 2015), may lead to an “overload” of managerial schemes, each potentially useful depending on the specificities of different organizations. This could be somewhat dangerous because adaptation of managerial approaches could have serious organizational and managerial consequences (Downe et al., 2010; Kislov et al., 2017). NPIs are currently facing increasing uncertainty, especially in financial matters (Deakin, 1995). Consequently, they manifest a great need for managerial techniques (Drucker, 1990): despite for- profit organization, in Non-Profit Sector measuring of performance could be very hard. Thus, the real question could be: NPIs may face an obvious confusion because of the absence of traditional for-profit price mechanisms that are usually helpful to balance revenues and expenditures, supply and demand, or goals with their activities as in other sectors (Anheier, 2000). This confusion, together with the heterogeneous nature of NPIs (DiMaggio & Anheier, 1990), may lead to an “overload” of managerial schemes, each potentially useful depending on the specificities of different organizations. This could be somewhat dangerous because adaptation of managerial approaches could have serious organizational and managerial consequences (Downe et al., 2010; Kislov et al., 2017). In this perspective, this work tries to deal with NPIs management challenges, addressing a potential response to the need of managerial approaches and schemes for a better understanding of phenomenon. In particular, this research aims to identify the main trajectories on which to build a potential managerial model useful also for a better understanding of the management and performance of NPIs. This especially because NPIs performance and accountability systems and levels are tightly linked with service delivery (Poister, 2004; Pettijohn & Boris, 2013; Fyffe et al., 2017): performance measurement represents the main tool for accountability (Behn, 2001; Ricci, 2016), particularly for NPIs (Wholey, 2001; Hatry et al., 2005; Moynihan, 2007). Research questions NPIs are currently facing increasing uncertainty, especially in financial matters (Bowman, 2011). Consequently, they manifest a great need for managerial techniques (Drucker, 1990). NPIs may face an obvious confusion because of the absence of traditional for-profit price mechanisms that are usually helpful in measuring performance (Anheier, 2000). This confusion, together with the heterogeneous nature of NPIs (Skelcher & Smith, 2015), may lead to an “overload” of managerial schemes. This research aims to identify the main trajectories on which to build a potential managerial model for a better understanding of the management and performance of NPIs. Performance and accountability systems (Behn, 2001; Ricci, 2016) are tightly linked with service delivery (Pettijohn & Boris, 2013; Fyffe et al., 2017): the first represents the main tool for the latter (Hatry et al., 2005; Moynihan, 2007). Methodology After the analysis of the main literature on NPIs, the research will deal with the analysis of key elements of their management, to identify the most critical aspects. In the second section, the work will explore a case study represented by a sample of small- medium NPIs. We will treat this part within the framework of structural equations modeling (SEM) in order to investigate the connection between the performance and the organizational aspects of the NPIs. The study will cover a specific sample of NPIs rather than a wider context: its goals is to develop concepts and viewpoints for a potential theoretical model rather than an analytical description of a national or cross-national phenomenon (Yin, 1994). The statistical analysis will allow to test the coherence of theoretical insights and to draft trajectories and dimensions of a possible multifaceted management model for NPIs into which coproduction may play a very important role for service delivery (Nabatchi et al., 2017).