The Construct of Organizational Effectiveness

Abstract

Scholars have long debated how best to define organizational effectiveness in the nonprofit sector. Throughout the academic literature on this topic various “models of organizational effectiveness” have been proposed. These models are often derived from conceptual analyses or empirical studies of stakeholder judgments. I instead take a descriptive approach by directly asking a large sample of nonprofit leaders how their organizations define effectiveness. A mixed-method analysis of in-depth, face-to-face interviews with top leaders of international nonprofits across the United States identifies two distinct definitions of organizational effectiveness. Most leaders define effectiveness as “outcome accountability,” whereas a smaller number define effectiveness as “overhead minimization.” I conclude by discussing the implications of these findings for academic scholarship about nonprofit effectiveness as well as for popular efforts aimed at improving the overall accountability and efficiency of the U.S. nonprofit sector.