Kuruvila, Albert - Final PHD Thesis

Management of Non-Profit Social Service Organisations in
Aotearoa New Zealand
__________________________________________________________________________________
A thesis submitted in partial fulfilment of the requirements for the
Degree of
Doctor of Philosophy in Social Work
at the
University of Canterbury
Christchurch, Aotearoa New Zealand
by
Albert Kuruvila
Department of Human Services & Social Work
School of Language, Social and Political Sciences
2017
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Abstract
Non-profit social service organisations make a significant economic and social contribution to
Aotearoa New Zealand societies. Despite their growing significance and reach, non-profit
organisations (NPOs) have been facing significant operational challenges over the past decade
as a result of the contract model of funding for service delivery that is informed by a
neoliberal ideology and new public management techniques. These operational challenges are
mainly related to their finance, service delivery, governance boards and human resources.
Additionally, there is uncertainty around how NPOs manage their commitment to te Tiriti o
Waitangi / the Treaty of Waitangi. Although these concerns have remained the same over the
past decade and are still growing, there is still no research evidence available on how NPOs
manage these challenges. Due to the dearth of research, it is also not clear whether these
organisations face these challenges due to a lack of proper management of these
organisational elements. The survival of NPOs depends on how well they are managed, and
the need for competent management of NPOs has never been greater in the midst of funding
uncertainties. However, how NPOs in Aotearoa New Zealand manage their board, service
delivery, human resources and finance remains a mystery because of the lack of research in
this area. Therefore, the overall purpose of this research is to develop an understanding of
how well non-profit social service organisations manage their board, service delivery, human
resources and finance, and their commitment to te Tiriti o Waitangi.
A quantitative research methodology using a cross-sectional survey design informed by
positivist epistemology and objectivist ontology was adopted as the overarching research
strategy for this project. Data were collected from 65 NPOs in Aotearoa New Zealand through
a cross-sectional anonymous survey that assessed their management of the board, service
delivery, human resources and finance. Using systems thinking as a conceptual framework,
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this research also investigated the relationship between the management of organisational
elements. The results indicated that the NPOs demonstrated a borderline practice in all four
areas of management, resulting in the organisations carrying a medium risk. The non-Māori
NPOs also struggled with maintaining their commitment to te Tiriti o Waitangi. The results
also suggested that the relationship between the management of various organisational
elements is a matter of comparison rather than given because of their organisational identity.
The discussion shows that NPOs need to engage in assessing their management practices and
being critically reflective learning organisations to improve their management practices. A
non-profit management self-assessment tool was developed for NPOs to use as a potential
self-assessment tool. Because the results also demonstrated that the relationship between
organisational elements is a matter of comparison due to the stark differences found between
Māori and non-Māori organisations, a reconceptualisation of systems thinking is necessary to
consider these differences and the complex multilayered environmental context in which NPO
management takes place. Accordingly, an ecosystem management model was recommended
for practitioners and researchers as a conceptual framework to further the enquiries on non-
profit management.
Key Words: non-profit management; systems thinking; board; service delivery; human
resources; finance; ecosystem management; non-profit social service organisation

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Table of Contents
Abstract ..................................................................................................................................... ii
List of Tables........................................................................................................................... vii
List of Figures ........................................................................................................................ viii
Glossary of Māori Terms ........................................................................................................ ix
List of Abbreviations ............................................................................................................... xi
Preface ..................................................................................................................................... xii
Acknowledgements ................................................................................................................. xv
CHAPTER 1: INTRODUCTION ........................................................................................... 1
1.1 Overview of the Chapter .......................................................................................................... 1
1.2 Social Work and Management ................................................................................................. 1
1.3 Context of the Study ................................................................................................................ 3
1.4 Statement of the Problem ....................................................................................................... 15
1.5 Statement of Purpose and Research Questions ...................................................................... 17
1.6 Significance of Study ............................................................................................................. 18
1.7 Scope of Study ....................................................................................................................... 20
1.8 Overview of the Thesis .......................................................................................................... 21
1.9 Summary of the Chapter ........................................................................................................ 21
CHAPTER 2: NON-PROFIT MANAGEMENT: A CONCEPTUAL REVIEW............. 23
2.1 Overview of the Chapter ........................................................................................................ 23
2.2 Three Sectors of Society ........................................................................................................ 23
2.3 Terminological Issues ............................................................................................................ 27
2.4 Theoretical Approaches to Non-Profit Organisations ............................................................ 30
2.5 Definitional Aspects of Non-Profit Organisations ................................................................. 40
2.6 Management........................................................................................................................... 46
2.7 The Distinctive Nature of Non-Profit Management............................................................... 48
2.8 A Comprehensive View of Non-Profit Organisation Management ....................................... 56
2.9 Conceptual Framework .......................................................................................................... 61
2.10 Operational Definitions of Key Terms................................................................................... 73
2.11 Summary of the Chapter ........................................................................................................ 75
CHAPTER 3: THE NON-PROFIT SECTOR IN AOTEAROA NEW ZEALAND ........ 76
3.1 Overview of the Chapter ........................................................................................................ 76
3.2 Historical Development of the Non-Profit Organisation Sector in Aotearoa New
Zealand................................................................................................................................... 76
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3.3 Contemporary Issues Confronting the Non-Profit Organisation Sector in Aotearoa

New Zealand .......................................................................................................................... 98
3.4 Summary of the Chapter ...................................................................................................... 107
CHAPTER 4: RESEARCH METHODOLOGY ............................................................... 109
4.1 Overview of the Chapter ...................................................................................................... 109
4.2 Pilot Study............................................................................................................................ 109
4.3 Overall Research Strategy.................................................................................................... 111
4.4 Ontological Considerations .................................................................................................. 111
4.5 Epistemological Considerations........................................................................................... 112
4.6 Methodological Considerations ........................................................................................... 113
4.7 Research Design................................................................................................................... 114
4.8 Participant Selection: Decision Framework ......................................................................... 115
4.9 Unit of Analysis ................................................................................................................... 119
4.10 Population ............................................................................................................................ 121
4.11 Sampling Frame ................................................................................................................... 122
4.12 Sampling Technique ............................................................................................................ 124
4.13 Sample Size.......................................................................................................................... 125
4.14 Profile of the Participant Organisations ............................................................................... 125
4.15 Data Collection Instrument .................................................................................................. 127
4.16 Reliability of the Instrument ................................................................................................ 130
4.17 Validity of the Instrument .................................................................................................... 131
4.18 Pre-Test ................................................................................................................................ 131
4.19 Sources of Data .................................................................................................................... 132
4.20 Process of Data Collection ................................................................................................... 132
4.21 Data Analysis and Interpretation.......................................................................................... 133
4.22 Axiology Considerations ..................................................................................................... 134
4.23 Ethical Considerations ......................................................................................................... 135
CHAPTER 5: RESULTS ..................................................................................................... 138
5.2 General Characteristics of Organisations ............................................................................. 139
5.3 Board Management .............................................................................................................. 142
5.4 Service Delivery Management ............................................................................................. 150
5.5 Human Resource Management ............................................................................................ 154
5.6 Financial Management ......................................................................................................... 164
5.7 Overall Management Practice Level and Risk ..................................................................... 170
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5.8 Commitment to te Tiriti o Waitangi ..................................................................................... 173

5.9 Relationship between the Management of the Board, Human Resources, Service
Delivery and Finance ........................................................................................................... 174
5.10 Difference in Management between Māori and Non-Māori Non-Profit Organisations ...... 178
CHAPTER 6: DISCUSSION............................................................................................... 186
6.2 Research Question 1 ............................................................................................................ 186
6.5 Ecosystem Model of Non-Profit Organisation Management ............................................... 202
6.6 Limitations of the Study....................................................................................................... 208
CHAPTER 7: CONCLUSION ............................................................................................ 212
7.1 Implications for Theory and Research ................................................................................. 214
7.2 Implications for Practice ...................................................................................................... 214
7.3 Implications for Policy ......................................................................................................... 215
7.4 Implications for Education ................................................................................................... 216
7.5 Recommendations for Future Research ............................................................................... 217
7.6 Final Reflection.................................................................................................................... 219
References ............................................................................................................................. 220
Appendices ............................................................................................................................ 246
Appendix 1: NPO Management: Self-Assessment Tool ................................................................. 246
Appendix 2: Ethics Approval Letter ............................................................................................... 257
Appendix 3: Research Information Sheet........................................................................................ 258
Appendix 4: Data Collection Instrument- Questionnaire ................................................................ 260
Appendix 5: Charities Register-Screenshot..................................................................................... 277
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List of Tables
Table 1-1. Value of the non-profit sector ................................................................................................ 6

Table 2-1. Three sectors of society ....................................................................................................... 27
Table 3-1. Operational challenges faced by NPOs: A summary of sector surveys ............................. 100
Table 3-2. Operational challenges as identified in Aotearoa New Zealand non-profit sectoral surveys
between 2006 and 2016 ....................................................................................................................... 101
Table 4-1. Fields of practice ................................................................................................................ 127
Table 4-2. Management practice and risk level matrix ....................................................................... 129
Table 4-3. Management rating scales score ranges according to the levels of performance ............... 130
Table 4-4. Scales: Internal consistency values .................................................................................... 131
Table 5-1. Year of establishment ........................................................................................................ 140
Table 5-2. Gender distribution of staff in NPOs ................................................................................. 141
Table 5-3. Volunteering characteristics............................................................................................... 142
Table 5-4. Number and percentage of males and females on board.................................................... 143
Table 5-5. Board management practice and risk level matrix ............................................................. 149
Table 5-6. Service delivery risk assessment characteristics ................................................................ 150
Table 5-7. Service delivery management: Practice and risk level matrix ........................................... 153
Table 5-8. Job advertisement process.................................................................................................. 155
Table 5-9. Frequency and percentage of NPOs: Staff management practice and risk level ............... 159
Table 5-10. Frequency and percentage of NPOs: Volunteer management practice and risk level ..... 162
Table 5-11. Human resource management: Practice level and risk level matrix ................................ 163
Table 5-12. Number and percentage of NPOs: Sources of income ..................................................... 164
Table 5-13. Frequency and percentage of NPOs: Finance management practice and risk level ......... 169
Table 5-14. Overall management practice and risk level .................................................................... 171
Table 5-15. Spearman’s rho correlation matrix ................................................................................... 177
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List of Figures
Figure 4.1. Participant organisations according to the regional areas ................................................. 126
Figure 5.1. Annual income: Percentage of organisations ($NZ) ......................................................... 140
Figure 5.2. Percentage of NPOs following board management practices ........................................... 145
Figure 5.3. Percentage of NPOs following board management practices II ....................................... 146
Figure 5.4. Percentage of NPOs following board management practices III ...................................... 147
Figure 5.5. Percentage of NPOs following board management practices IV ...................................... 148
Figure 5.6. Percentage of NPOs following service delivery management practices I ........................ 151
Figure 5.7. Percentage of NPOs following service delivery management practices II ....................... 152
Figure 5.8. Percent of NPOs following staff management practices I ................................................ 157
Figure 5.9. Number of NPOs following staff management practices II .............................................. 158
Figure 5.10. Percentage of NPOs following volunteer management practices I ................................. 160
Figure 5.11. Percentage of NPOs following volunteer management practices II ............................... 161
Figure 5.12. Percentage of NPOs following financial management practices I .................................. 166
Figure 5.13. Percentage of NPOs following financial management practices II................................. 167
Figure 5.14. Percentage of NPOs following financial management practices II................................. 168
Figure 5.15. NPO management risks: Summary ................................................................................. 172
Figure 5.16. Management satisfaction and sector difference: NPO responses.................................... 172
Figure 6.1. Ecosystems model of NPO management .......................................................................... 205
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Glossary of Māori Terms
(The glossary is arranged in alphabetical order. Brief translations are given, so it should be
noted that fuller and multiple meanings may be attributed to words depending on the context
in which they are used.)
Aotearoa Māori name for New Zealand
Āwhinatanga Empathy
Hapū Subtribe
Hui Meeting
Iwi Tribe/Nation
Karakia Prayer
Kaumatua Elder
Kaumātua Elders
Kaupapa Māori Māori philosophy
Kawa Protocol
Kāwanatanga Government
Kōhanga Reo Māori language nest
Koha tuku rua atu Redistribution
Mahi aroha Volunteering/unpaid work
Mana Status/prestige/integrity
Mātauranga Māori Māori knowledge
Mihi whakatau Official welcome speech
Noa Non-sacred/unrestricted
Rangatiratanga Leadership
Tangata whenua People of the land
Tapu Sacred/restricted
Tau utuutu Reciprocity
Tautoko Support
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Tauiwi Others who came to New Zealand after Māori
Te Ao Māori Māori world view
Te reo Māori Māori language
Tikanga Customs
Tino rangatiratanga Self-determination/autonomy
Tirohanga Māori Māori world view
Whakahaere Māori Māori management practices
Waiata Song
Whakapapa Genealogy
Whānau Extended family
Whanaungatanga Relationship/kinship
Whenua Land
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List of Abbreviations
ANGOA Association of Non-Governmental Organisations of Aotearoa

ANOVA Analysis of variance
ANZASW Aotearoa New Zealand Association of Social Workers
CBO Community-based organisations
CEO Chief executive officer
DIA Department of Internal Affairs
FTE Full-time equivalent
GDP Gross domestic product
GRO Grass roots organisations
ICNPO International Classification of Nonprofit Organisations
IFSW International Federation of Social Work
MSD Ministry of Social Development
NFPO Not-for-profit organisation
NGO Non-governmental organisation
NPM New public management
NPO Non-profit organisation
NPSSO Non-profit social service organisation
NZSCNPO New Zealand Standard Classification of Non-Profit Organisations
OCVS Office for the Community and Voluntary Sector
RBA Results-based accountability
RMF Results Measurement Framework
SO Support organisation
SOGI Statement of Government Intentions for an Improved Community-
Government Relationship
SPSS Statistical Package for Social Sciences
UN United Nations
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Preface
This research is an outcome of the fourfold aspects of my social work career as an educator,
researcher, trainer and consultant. Throughout my professional experience as a social worker,
I have been involved with non-profit organisations (NPOs) in many different ways. My
interest in NPOs was sparked when I was a master’s student (2003–2005) in social work in
India.1 I initially learned about the role of NPOs in social work practice as one of the essential
organisational contexts in which social workers practice. I then learned more about the nature,
purposes and role of NPOs through the courses I attended, the field visits to various non-profit
social work organisations and the mandatory social work field practicums in these
organisations. Through these exposures, I came to know about the value of the vast array of
services these organisations were providing to individuals, families, groups and communities
amidst all the challenges they had to face as alternative social welfare and social action agents
to government organisations. This interest in NPOs was reignited when I started working as a
lecturer in a social work school in India. My research interest in NPOs widened when I started
teaching social welfare management to social work students as a secondary method of social
work practice in India. I soon realised that NPOs are different from government and
commercial organisations and their management needs are different from those of other
organisations. I then started working with some NPOs in India on a voluntary basis, offering
training for their staff on management of their organisations. This also led to offering some
consultancy services on NPO management. I did not see the processes of teaching, research,
training and consultancy as different; instead, I considered them to be complementing
activities in developing my knowledge about NPOs.
1India is my home country, where I was born, studied and worked until I started my PhD in Social Work at the University of
Canterbury, Christchurch, Aotearoa New Zealand.
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During my teaching and association with the NPOs in India, I observed both social work
students and NPO professionals cringing when they heard the term management. I also found
that professionally trained NPO staff such as social workers tried to avoid becoming
competent in management out of fear that they might somehow be turning their backs on their
clients or losing their identity as professional helpers if they were to be involved in the
management of NPOs. This tempted me to do further research on the management of NPOs as
I always viewed and still view management of NPOs as a function, process and method
essential to professional social work practice. Anecdotal evidence suggests that most NPOs
are managed by professionally qualified social workers, and becoming a manager of a non-
profit social service organisation is a typical career prospect for many professional social
workers. As non-profit organisations are one of the major organisational contexts where
social workers practice, the ways NPOs are being managed have a significant influence on
social work profession. However, in my experience as a social work educator, I have
observed that non-profit management does not receive enough attention in social work
education and research. At the same time, NPO management has become a discipline in its
own right and has received considerable attention in other disciplines such as management
and human services. This lack of attention to NPO management in social work education and
research motivated me to undertake a doctoral study in this area.
I decided to undertake my doctoral study on NPO management among the non-profit social
service organisations in Aotearoa New Zealand2 as it is viewed as the social laboratory of the
world in many respects due to its small size, bicultural foundation and development and
growth of the non-profit sector. Because of the subject of this research and my status as a
2 Aotearoa is the most widely used Māori name for New Zealand and the most popular and authoritative meaning usually
given is “the land of long white cloud” (An Encyclopaedia of Aotearoa New Zealand, edited by A. H. McLintock, 1966). In
this research, the term Aotearoa New Zealand is used instead of New Zealand to acknowledge the bicultural foundation of
Aotearoa New Zealand and the indigenous people (Māori) of Aotearoa New Zealand. I acknowledge the bicultural nature of
Aotearoa New Zealand as laid out in its founding document, te Tiriti O Waitangi (the Treaty of Waitangi), which was signed
between Māori and the British Crown on 6 February 1840.
xiv
registered social worker and social work academic, undertaking this study in the discipline of
social work became a natural choice. Two professionally qualified and registered social
workers supervised this project. While this thesis is intended to make a knowledge
contribution to social work, I also hope that it will make a knowledge contribution to the
wider non-profit sector studies.

xv
Acknowledgements
Ehara taku toa, he takitahi, he toa takitini
My success should not be bestowed onto me alone, as it was not individual success but
success of a collective [Māori Proverb]
As the above proverb states, completion of this thesis was not just a work of mine, but of
many. This thesis has been a journey of resilience as it has faced some significant challenges
during its journey. This thesis has survived major earthquakes, significant health issues, loss
of a baby, unexpected loss of dear friends and the pressures of a full-time academic job. I also
became a father for the first time during this journey. It was not at all an easy journey, but I
made it to the finish line with the immense support of many who wanted me to cross it.
First, I would like to thank my supervisors, Dr Annabel Taylor and Dr Andrew Frost, for
unconditionally supporting me through all these years of the thesis journey. If it were not for
both of you, I would not have completed this thesis. Annabel, right from the very first day
when I arrived at the University as a very confused and scared international student, you made
me feel comfortable and looked after. Andrew, I cannot thank you enough for the phone calls
you made “just to check in with me”. The knowledge and expertise of both of you were
invaluable and I learned so much from you. You both have demonstrated to me what a thesis
supervisor should be. You have been very patient, understanding and empathetic about all the
troubles I have had. You both have also demonstrated what wonderful social workers you are.
I cannot thank you enough for the pastoral care you gave me on top of the academic
supervision. I am grateful for your insightful questions and keeping me going when times
were tough. I aspire to be a social worker and supervisor like you one day.
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I also would like to thank the people from the 65 wonderful non-profit organisations who
participated in this study by taking a few hours of their valuable time to reflect on their
organisational management and answering the survey. Your interest in my research is much
appreciated.
Special thanks to Matua Jim Anglem (Ngāi Tahu) and tuahine Leisa Moorhouse (Ngā Puhi)
for their cultural advice for this research. Your advice and suggestions helped me to ensure
the cultural appropriateness of this research for Māori.
I appreciate the financial support given by Education New Zealand in the form of the New
Zealand International Doctoral Research Scholarship for three years to help me with the
study. I also would like to acknowledge the small scholarship extension I received from the
University of Canterbury, and the small research funds provided by the Tangata Whenua
Community and Voluntary Research Centre (New and Emerging Researcher Award) and the
BRCSS Network that enabled me to attend various conferences and trainings during this PhD.
I also would like to thank Dr Lyn Lavery (Academic Consulting) for introducing me to SPSS
and statistical testing through her excellent online training. Also special thanks to Dr Rebecca
Sargisson (School of Psychology, University of Waikato) and Dr.Surej P John (Waikato
Management School) for answering my random questions related to SPSS and statistics.
I also would to thank Andrew Lavery (Academic Consulting) for his meticulous proof reading
of the thesis.
I also would like to express my sincere thanks to Yolande Ruiters for her friendship and the
administrative support she provided for the project.

xvii
Special thanks to Dr Kate van Heugten, Dr Cindy Zeiher and Dr Jane Maidment for their
support as the postgraduate coordinators of the Department of Social Work and Human
Services.
I also would like to acknowledge the support from the postgraduate office team and enrolment
team at the University of Canterbury during this thesis journey. You people have been very
patient and empathetic to me all these years. I really appreciate it.
Special thanks to my colleagues at the University of Waikato: Simon, Sonya, Kelly, Emma,
Leisa, Patrick, Michael, Allison and Rebecca for their support and encouragement.
I also would like to acknowledge the knowledge contributions made by the scholars who have
researched and published in the area of non-profit organisations and their management. Your
contributions challenged my thinking, widened my views and developed my understanding.
Special thanks to my father- in- law George, who supported me in this journey financially and
emotionally. Also, thanks to my extended family in India for their encouragement to be the
first person in the family with a PhD.
Last, but not least, I would like to thank my wife, Neethu, and my daughter, Abigail, who was
born during this journey, for their unconditional support, encouragement and love, without
which I would not have come this far. Neethu, I can now do the dishes, and Abigail, I can
now read all the books you wanted me to read and watch Peppa Pig with you.
1
CHAPTER 1: INTRODUCTION
1.1 Overview of the Chapter

This research sought to develop an understanding of how non-profit social service
organisations (NPSSOs) in Aotearoa New Zealand manage their board, service delivery,
human resources and finance. It was anticipated that the knowledge generated from this
enquiry will afford new insights and so inform the management of NPSSOs. As the study was
undertaken within the subject discipline of social work and the research is focused on the
management of social service organisations, this chapter begins with a brief discussion on the
relevance of management to social work. This is followed by an overview of the context of
non-profit organisations (NPOs) that frames the study. The context specifically addresses the
non-profit sector in general and social service organisations in particular in Aotearoa New
Zealand to set the stage for the study. Following this is the problem statement, the statement
of purpose and accompanying research questions, and definitions of key terms. Also included
in this chapter is a discussion on the significance and scope of the study. The chapter
concludes with an overview of how the thesis is organised.
1.2 Social Work and Management

Social work is a profession primarily practised in the confines of an organisation, and almost
all social workers are organisation-based practitioners. What social workers do on a day-to-
day basis is bound by the organisations that employ them. Social workers are accountable for
the work they do administratively and professionally, and they are always part of the
management process (Coulshed, Mullender, Jones, & Thompson, 2006). Social workers’
career progression typically involves moving on from frontline positions to management roles
that include supervising and managing teams and organisations as a whole (Coulshed et al.,
2006; Sewpaul & Jones, 2005). However, social workers do not always receive appropriate
2
training or support when they move from a frontline position to a management position
(Coulshed et al., 2006). Furthermore, social workers tend to hold negative attitudes towards
administrative and managerial aspects of their organisations and often argue that these are
distractions from the real work of social workers (Coulshed et al., 2006). It is also argued that
experienced social workers may not make the automatic transition to managers because the
specific tasks of management are varied (Coulshed et al., 2006). As a result, organisational
skills and understanding of the internal functioning of the workplace is a critical aspect of
social service management (Sewpaul & Jones, 2005). Reinforcing the importance of
management to social work, Coulshed et al. (2006) argued that all social workers are
managers because they manage themselves, others and the systems. Moreover, Hughes and
Wearing (2013) proposed that although not always apparent, organisational management
always play an essential role in social work practice and it is necessary to be an effective
organisational operator if the social worker wants to be an effective practitioner.
Much of social work practice is organisational in nature, making the organisations vital to
achieving social work’s virtues and ideals as a profession (Chenoweth & McAuliffe, 2017;
Hughes & Wearing, 2013). Social work promotes social change, social development, social
cohesion and the empowerment and liberation of people through practices of human rights,
social justice, collective responsibility and respect for diversities (International Federation of
Social Work [IFSW], 2014). The extent to which social workers carry out these core
mandates of their profession depends on the nature and values of the organisations they work
with, and it is vital to effective professional practice that they understand the organisational
context (Beddoe & Maidment, 2009; Gardner, 2016; Hughes & Wearing, 2013). Management
could liberate social work to pursue values such as equality, justice and the highest standards
of services for the marginalised groups in society (Coulshed et al., 2006). The importance of
the organisational context and its management to social work practice was formally
3
recognised when the IFSW designated management as one of social work’s 13 “core
purposes” in 2004 (Sewpaul & Jones, 2005). According to the IFSW, the core purpose of
management is to plan, organise, administer and manage programmes and organisations
dedicated to any of the other 12 purposes, such as facilitating the inclusion of marginalised,
socially excluded, disposed, vulnerable and at-risk groups of people (Sewpaul & Jones, 2005,
p. 229). Social workers have an ethical responsibility to challenge organisational management
practices that violate social work values with their identity, values and knowledge. The
practice of management in social service organisations should be ethical within a broader
anti-oppressive agenda for the promotion of human rights and social justice to ensure the
well-being of individuals and communities (Coulshed et al., 2006). The non-profit sector has
re-emerged as the main site for social service delivery and a vehicle for social work practice
in recent times (Hughes & Wearing, 2013), and understanding the management of NPOs is
critical for social workers in realising their goals of social justice, human rights and the well-
being of individuals and communities. The following section sets this context of NPOs.
1.3 Context of the Study

The past three decades have seen a significant growth in the numbers and scope of a set of
organisations that are different from commercial and government organisations around the
globe. Variously known as non-profit organisations (NPOs), not-for-profit organisations
(NFPOs), the voluntary sector, civil society, the third sector, the social economy, non-
governmental organisations (NGOs) and the charitable sector, they participate in a “global
associational revolution” (Salamon, Sokolowski, & List, 2003, p. 1) along with the state and
the market in public policy formulation and service delivery. The existence of these
organisations is by no means a new phenomenon. Salamon et al. (1999) explained that they
have a long history, characterised by religious ideologies, social movements and the global
crisis of the state, and they have become increasingly visible since the Second World War.
4
Salamon et al. (2003) argued that the failure of the state and the market to represent the wide
variety of human needs has resulted in fears about a decline, or general insufficiency, and has
triggered an interest in these organisations as a way to find a solution for this failure.
Increased knowledge in information technology, a high level of literacy among the
population, increased interest in human rights, and environmental and gender consciousness
have also contributed to the recognition of these organisations (Anheier, 2005; Lewis, 2006b;
Rahman, 2003; Salamon et al., 2003).
NPOs3 are now a growing feature of societies all over the world and have an increasing
profile because societies are increasingly dependent on them for delivery of various services
irrespective of their function, for example, as service providers or promoters of values or
public concerns (Lewis, 2006b; Salamon et al., 2003; Stansfield, 2001). These organisations
are mainly involved in either service functions, which involve the delivery of direct services
such as education, health, housing, community development, social services and the like, or
expressive functions, which involve activities that provide avenues for the expression of
cultural, religious, professional or policy values and interests (Salamon et al., 2003, p. 22;
Sanders, O’Brien, Tennant, Sokolowski, & Salamon, 2008, p. 7). While some NPOs may
engage in both, the International Classification of Nonprofit Organizations (ICNPO) has
classified them into 12 categories4 based on their primary activities, demonstrating the vast
array of activities NPOs undertake in our societies (Salamon & Anheier, 1996; Salamon et al.,
2003). Despite the differences in their primary activity, all NPOs share a set of common
characteristics, such as organised, private, not-for-profit distributing, self-governing and
3 The term non-profit organisations (NPOs) is used in this study because of its wider recognition in the international and
national official statistics such as the Statistics New Zealand satellite account. The International Classification of Nonprofit
Organizations (ICNPO) and national classification systems (New Zealand Standard Classification of Non-Profit
Organisations [NZSCNPO]) use this term to officially recognise and estimate their contribution to national economies. They
are commonly known as NPOs as they do not distribute or return profits to the owners of the organisation (Salamon et al.,
2003).
4 The 12 categories are culture and recreation; education and research; health; social services; environment, development and
housing; law, advocacy and politics; philanthropic intermediaries and volunteerism promotion; international, religion;
business and professional associations, unions; and not elsewhere classified.
5
voluntary (Salamon & Anheier, 1996; Salamon & Anheier, 1997; Sanders et al., 2008), that
make them different from government and commercial organisations (Ahmed, 2013).
NPOs now receive high recognition as a significant social and economic force at the local,
national and international levels, and are an emerging middle way sector between the market
and the state (Anheier, 2005). Based on data from 35 countries, Salamon et al. (2003)
estimated that the NPO sector is the world’s seventh largest economy if the NPO sector in
these countries combined were considered a separate national economy. More recently, based
on the data available from the 15 countries who have implemented the United Nations (UN)
Handbook on Nonprofit Institutions in the System of National Accounts,5 Salamon,
Sokolowski, Haddock and Tice (2012) argued that the non-profit sector is a significant
economic force accounting for 4.5% of the gross domestic product (GDP) of these countries,
including the value of the volunteer work in NPOs. This contribution to the GDP is
approximately equivalent to the construction industry in these countries. According to
Salamon et al. (2012), the non-profit workforce made up 7.4% of the total workforce on
average, including paid staff and volunteers. Employee compensation made up the largest
share (84%) of the non-profit sector’s contribution to GDP. The vast majority of non-profit
value (75%) to GDP was generated through service activities such as social services, health
and education, as opposed to expressive activities such as sports and recreation, arts and
culture, and advocacy. On average, NPOs received 43% of their income from the fees they
charged for their services, 32% from government sources (contracts and grants) and 23%
from philanthropic giving. The NPO sector is growing internationally: the NPO sector’s
contribution to GDP grew at an average rate of 5.8% per year compared with 5.2% of the
5 Developed by the Johns Hopkins Center for Civil Society Studies in cooperation with the United Nations (UN) Statistics
Division and an international technical experts group, issued by the UN in 2003, this handbook calls on national statistical
offices to produce regular “satellite accounts” on non-profit institutions and volunteering for the first time, and provides
detailed guidance on how to do so. The countries include Australia, Belgium, Brazil, Canada, the Czech Republic, France,
Israel, Japan, Kyrgyzstan, Mexico, Aotearoa New Zealand, Norway, Portugal, Thailand and the United States (Salamon et
al., 2012, p. 1).
6
economies as a whole. While the NPO sector is a significant social and economic force in a
range of countries, there are huge variations among the countries, and the average obscures
this variation (Salamon et al., 2012). Table 1-1. Value of the non-profit sector shows this
variation in a group of countries that Anheier (2014) referred to as liberal welfare countries,
where there is a high level of service commodification. This table shows some significant
differences in their contribution to GDP, income, asset base and the percentage of paid and
volunteer workforce in each country. While the number of NPOs in each country is available
in the table, they are not a reliable measure of the impact of NPOs because it is “a notoriously
imprecise measure” (Salamon et al., 2003, p. 10) due to the variation in data collection
procedures used in each country.
Table 1-1. Value of the non-profit sector

Dimensions New Zealand Australia United United Canada
States Kingdom
Number of organisations 114,110 56,894 955,000 167,443 85,600
Contribution to GDP including 5.3 4.9 6.6 Not 8.1
volunteer labour (%) available
Income (in billion) NZ$13.28 A$107.5 US$2,160 £74.43 C$168B
Assets NZ$40B A$176B US$4,840B £235B Not
available
% of workforce (paid) 4.4 8.5 7.7 3.1 8.5
% of workforce (volunteers) 6.2 3.0 2.5 Not Not
available available
(Source: Australian Bureau of Statistics, 2015; Charities Commission for England and Wales, 2017; McLeod, 2017; Salamon
et al., 2012; Statistics New Zealand, 2016).
This study is located in Aotearoa New Zealand, where the non-profit sector makes a
significant contribution to the country’s social and economic fabric. Since a significant
number of Aotearoa New Zealanders are either participating in NPOs as members and
volunteers or receiving services provided by them, McLeod (2017) argued that “the sector is
the glue which holds much of New Zealand society together and allows it to function and
prosper” (p. 7). According to the Aotearoa New Zealand Non-Profit Institutions Satellite
7
Account6 based on database year 2013, there were 114,110 NPOs in 2013, compared with
97,000 in 2005 (Statistics New Zealand, 2016). However, 61% of the NPOs were small
unincorporated organisations functioning with the assistance of volunteers (McLeod, 2017).
Moreover, only 27,188 NPOs were registered as charities under the Charities Act 2005 to
receive tax exemptions in 2013 (Charities Services, 2017). However, McLeod (2017)
estimated that there was a charitable NPO for nearly every 170 people in Aotearoa New
Zealand and one in every 40 Aotearoa New Zealanders would be on a charitable NPO board if
each organisation had four board members. According to the satellite account data, 90% of
NPOs did not employ any staff, and 6.8% had only one to five employees (Statistics New
Zealand, 2016). Only 0.2% of the NPOs had more than 100 employees. Although 90% of the
NPOs did not employ any paid staff, they received a significant level of support from
volunteers since approximately 1.2 million volunteers donated their time to NPOs (Statistics
New Zealand, 2016). While a volunteer did three hours of unpaid work per week on average,
the hours of unpaid work they contributed reduced from 270 million hours in 2004 to 157
million hours in 2013 (Statistics New Zealand, 2016).
According to the satellite data (Statistics New Zealand, 2016), the non-profit sector
contributed NZ$5.96 billion to GDP (2.7% of Aotearoa New Zealand’s total GDP) in 2013,
up from $3.64 billion (2.5% of GDP) in 2004. When the value of voluntary labour ($3.46
billion) was added to the traditional measure of GDP, the contribution of the NPO sector to
GDP significantly increased to 5.3% from 2.7%, compared with 4.9% in 2004. This makes
the total contribution of NPOs to the Aotearoa New Zealand GDP $9.42 billion in 2013. The
6 Satellite accounts reorganise existing information in the national accounts to analyse a particular area of economic or social
importance such as NPOs more closely and are linked to central national accounting frameworks such as the New Zealand
System of National Accounts (Statistics New Zealand, 2016). Non-profit institutions’ satellite accounts are recognised
internationally to organise information about NPOs and are guided by the Handbook on Nonprofit Institutions in the System
of National Accounts (UN, 2003). The Non-Profit Institutions Satellite Account maintained by Statistics New Zealand is the
most comprehensive data source available in Aotearoa New Zealand about the NPOs because it has used a variety of data
sources to develop an accurate picture of the dimensions of Aotearoa New Zealand’s non-profit sector. The first satellite
account, based on 2004 data, became available in 2007, and it was updated in 2016 based on 2013 data.
8
satellite account data also demonstrated that the NPO sector generated $13.28 billion in
revenues through grants, donations and membership fees from households, philanthropic
institutions, $2.66 billion from other private sources, and $1.44 billion from grants from
central and local governments, and government contracts accounted for $2.66 billion. The
total expenditure was estimated to be $12.03 billion, leaving an overall surplus of $1.25
billion. The compensation of employees accounted for $4.52 billion, and the increase in this
expenditure was underpinned by a 30% increase in paid employees between 2004 and 2013.
This means that although there were no data available, NPOs contributed back to government
income in the form of income taxes from employees and other levies while receiving a
significant portion of their income from the government. However, using the charitable NPOs
data set, McLeod (2017) argued that a limited number of organisations dominated the sector
since the largest 15% of the organisations controlled 85% of assets and 11% of organisations
controlled 89% of the income of the non-profit sector in Aotearoa New Zealand. The largest
organisations dominating the sector remained the same over the years and almost 80% of the
40 largest charitable NPOs had existed for over 20 years (McLeod, 2017).
NPSSOs make a significant contribution to the socio-economic life of Aotearoa New Zealand
and are a significant aspect of the non-profit sector in Aotearoa New Zealand. Social service
organisations vary from small local initiatives established to address one or a small number of
quite specific issues or needs, to large, national organisations providing a diverse range of
services throughout the country (Tennant, Sanders, O’Brien, & Castle, 2006). The social
service organisations include service providers such as emergency and relief services,
institutions providing income support and maintenance, services for the disabled, parents,
young people, different migrant groups and the elderly, food banks, women’s refuges,
addiction services, mental health services, child welfare, youth services, family services, self-
help and other personal social services (Statistics New Zealand, 2016; Tennant et al., 2006).
9
Many of the traditional social services are provided by religious organisations—sometimes as
stand-alone entities and sometimes as part of the ecclesiastical structure or as an informal
activity undertaken through a locally based religious place of worship (Tennant et al., 2006).
Iwi (tribal) social services and other pan-Māori service providers that either work exclusively
with Māori7 or work from a kaupapa Māori (Māori philosophy) base are also an essential part
of social service NPOs (Statistics New Zealand, 2007). However, some social service
organisations may fall under other activity groups such as health as well.
According to Statistics New Zealand (2016), social service organisations contributed the most
to NPOs’ GDP contribution, estimated to be $1.42 billion, or 24% of the total NPO GDP
contribution of the 12 major activity groups. Social services were the second largest activity
group in the Aotearoa New Zealand NPO sector, comprising 14,810 organisations (13%) in
2013 (Statistics New Zealand, 2016). However, the charitable register identified only 2,014
(7% of all registered charities) social service organisations in the year ending 2013 (Charities
Services, 2017). Despite their small size compared with other NPOs, NPSSOs were the
biggest employers among all the activity groups and paid the highest amount of compensation
of employees ($1.36 billion). The Statistics New Zealand data show that only 1,563
organisations (10.5%) employed paid staff out of 14,810 social service NPOs, accounting for
a total of 38,830 employees, averaging approximately 25 paid staff in these organisations
(Statistics New Zealand, 2016). This is well above the NPO sector average of 12, but not as
high as that of health (an average of 39 employees). Although the average staff size was 25,
nearly 55% of the social service organisations that employed paid staff had only between one
and five paid staff. Only 4% of the organisations employed more than 100 paid staff. The
major source of income for social service organisations was government contracts (identified
7Māori are the indigenous people of Aotearoa/Aotearoa New Zealand. As per the 2013 population census, 14.9% (598,605
people) of the total population of Aotearoa New Zealand identified as being Māori (Statistics New Zealand, 2013).
10
as sales income) and government grants. In 2013, government contract payments to social
service providers were estimated to be $557 million. Compensation of employees increased
from $759 million in 2004 to reach $1,355 million in 2013. This reflects the growing number
of paid employees and indicates that a significant amount of funding was spent on employing
staff to deliver services (Statistics New Zealand, 2007, 2016). A wide variety of organisations
now operate in the NPO sector in Aotearoa New Zealand and the majority of them rely on
volunteers for their functioning. Among these diverse organisations, social service
organisations play a significant role because they employ the majority of the paid staff in the
sector and contribute the most to the NPOs’ contribution to GDP.
Despite their growing social presence and the significant economic value to the national
economy, NPOs have been facing significant challenges as they have entered an era of fierce
competition for dwindling resources from both the public and private sectors. The competition
for resources has resulted from broader political and economic changes that have happened
(Gardner, 2016). The economic crisis and the rising fiscal debt in the early 1990s forced
governments to reconsider the size and the functions of the state (Cribb, 2006). As a result, a
conservative, neoliberal approach underpinned by free market practices to reduce public
spending on social welfare and the role of government emerged (Alessandrini, 2002; Cribb,
2006; Gardner, 2016; Kenny & Connors, 2017). The neoliberal approach was influenced by
the philosophy of Friedrich Hayek and the economic theory of Milton Friedman, which
emphasised the primacy of individual responsibility rather than state provision and
“maintained that a government’s role was to support the market and to get out of people’s
lives” (Ife, 2016, p. 20). Also known as economic rationalism or neoclassical economics,
neoliberalism considers the free market the answer to reducing welfare spending and an
ineffective use of scarce resources, and emphasises that individuals are responsible for their
welfare (Gardner, 2016; Healy, 2014; Kenny & Connors, 2017). The neoliberal ideology that
11
introduced the controlled markets with public agencies as funders opened up new
opportunities for NPOs to be involved in a “mixed economy of welfare” (Lewis, 2014, p. 46)
and led to the “introduction of purchaser/provider split” and the beginning of a competitive
“contract culture” (Lewis, 2014, p. 48) in public service provision. As a result, the
competitive tendering process to deliver services became the norm and outsourcing and
contractualism gained momentum (Alessandrini, 2002). In this model, the government
became the purchasers from NPOs rather than the primary providers, which resulted in
competition among NPOs for contracts (Healy, 2014; Ife, 2016). Although the government
purchased the services, they were not the end users of the services, thus creating a quasi-
market of NPSSOs (Healy, 2014; Ife, 2016). While neoliberal discourses advocated for
choice, the service users were not able to choose the services; instead, the services were
delivered to them in this contracting environment (Healy, 2014). In this contracting regime,
state agencies defined the service they purchased, stipulated the price and even nominated the
clients according to particular categories, resulting in delivering services in silos
(Alessandrini, 2002; Gardner, 2016). For the efficient implementation of neoliberal policies to
reduce the role of the state and outsourcing the services through a contracting regime,
governments also adopted a business approach widely known as new public management
(NPM). NPM favoured reorganisation of the public sector into corporate units and using
business management techniques such as privatisation, discipline in financial management,
greater use of performance measures, development of management information systems and
an emphasis on outputs rather than inputs (Anheier, 2005; Kenny & Connors, 2017).
NPM focused on evidence-based decision making and measuring outputs and outcomes
defined by the government rather than by those involved in services, resulting in an audit
culture (Healy, 2014). A drive to increase transparency and accountability was an essential
aspect of NPM, and it took the form of formal reporting against specific measures (Reichard,
12
2010). This resulted in less participation from service users and service providers in the
creation of policy and social services as” service delivery was seen as the output of the policy
rather than social policy in action” (Fawcett et al., 2010, as cited in Healy, 2014, p. 55). NPM
also commercialised the relationships between NPOs and the government through competitive
contracts that introduced efficiency-oriented concepts into the internal management of NPOs
(Reichard, 2010). As the government used free market practices to guide contracting out the
services, NPM relied on business management practices to steer NPOs, a practice known as
managerialism (Hughes & Wearing, 2013). This resulted in the view that management is
content free, encouraging people with business management experience to manage NPOs
(Kenny & Connors, 2017). NPM ideas brought forward many ideas to NPO management,
such as concerns about outcomes over inputs, efficiency versus effectiveness, accountability
and performance management (Anheier, 2014). NPM also influenced contracting procedures,
resource development, organisational structure and governance, creating significant
organisational challenges for NPOs.
Contracting as the preferred method of funding has had a significant impact on NPOs in New
Zealand. The contracting model has turned many aspects of social service and other
community activity into “commodities or commercial transactions” (Ministry of Social
Policy, 2001, p. 91). The contract culture has also placed pressure on NPOs to demonstrate
professionalism and mirror the management and organisational practices dictated by the state
funder to optimise opportunities for securing contracts and meeting reporting requirements
(O’Brien, Sanders, & Tennant, 2009; Tennant, 2007). New NPOs have emerged to capitalise
on the opportunity in the new market, and existing organisations have had to professionalise
and adopt the managerialist culture to attract contracts (Aimers & Walker, 2016). Aimers and
Walker (2016) also noted that NPOs that were able to align themselves with the government
policies to receive contracts were able to flourish under neoliberalism. The replacement of
13
voluntarism with corporate management structures and professionalism (Tennant, 2007) has
resulted in two types of NPO groups competing for contracts from the government:
“corporate NPOs” that behave more like businesses and “small NPOs” that “rely more on
individual passion and commitment, and being well connected to the local community”
(Treasury, 2013, p. 8). The competition for contracts has also led to a divide between large,
nationally organised organisations with semi-corporate structures as non-profits and small,
local organisations as community organisations (Cribb, 2005; Tennant, 2007). Because the
large corporate NPOs have resource advantages over small community organisations to meet
funder requirements for contracts, the smaller NPOs are forced to collaborate to attain the
capacity that the corporate NPOs possess to successfully bid for contracts (Aimers & Walker,
2016). This push for corporatisation has led to a widening gap between larger NPOs
providing government-contracted social services and those smaller independent NPOs that are
not part of this partnering process (Aimers & Walker, 2016; Tennant, O’Brien, & Sanders,
2008). Therefore, the centralisation of social service provision and the competitive tendering
has negatively affected NPOs’ relationships with each other and has been reported as leading
to the pitching of larger organisations against smaller ones (ComVoices, 2014). NPOs that
traditionally worked in collaboration and cooperation with each other have been forced into
entering into competitive relationships with each other and this has negatively affected their
ability to work together to address complex social issues (Humpage & Craig, 2008; Tennant,
2007). Also, recent government procurement guidelines have focused almost exclusively on
processes for achieving “value for money”, and this has resulted in national and international
corporates bidding for service delivery contracts in areas traditionally the reserve of the NPO
sector (Neilson, Sedgwick, & Grey, 2015). This competition for funding makes the NPOs
vulnerable and poses significant operational challenges while the demand for services is
increasing from their communities (Neilson et al., 2015).

14
Sanders et al. (2008) identified some funding issues confronting NPOs in New Zealand,
including inadequate funding: partial, short-term and project related; increased competition
for resources; linkage of government funding to extensive government goals rather than
organisational goals; and unpredictable shifts in government priorities and policies. Stansfield
(2001) also noted that the changes in funding arrangements, such as the purchase of service
contracting, has redefined the relationship between the government and NPOs and resulted in
greater competition between NPOs. This competition has been accompanied by an emphasis
on accountability to the public, funding sources and regulatory bodies, and to the consumers
of services. Sanders et al. (2008) further observed that these financial problems have had a
substantial indirect impact on the efficiency of NPOs to hire and maintain highly skilled
professionals. For the individual manager, this translates into pressure to establish the
effectiveness of social service programmes. Since this has become a reality, NPOs are being
forced to reorient their management practices to survive in the sector.
Non-profit activities encouraged into existence only by the prospect of contracts are caught in
what Nowland-Foreman called the bear hug of government funding (Nowland-Foreman,
1997). The loss of ability to autonomously decide the directions, values and philosophy under
contracting are also leading to less innovation, diversity and responsiveness to community
needs and funder capture (O’Brien et al., 2009). The dependency of NPOs on the government
for funding poses significant strategic challenges to NPOs concerning their identity,
distinctiveness and organisational purposes. NPOs have had to change their values, structures
and approaches to adopt a more professional approach to deliver services from what they can
obtain funds for (O’Brien et al., 2009; Wilson, 2001). The current contracting environment
characterised by uniformity, standardisation and bureaucracy (Wilson, 2001) has raised
questions about the extent to which NPOs are meeting government goals rather than pursuing
their missions (O’Brien et al., 2009; Sanders et al., 2008). The shift in NPOs undertaking to
15
supply specific services on behalf of the government through service contracts has
fundamentally changed the way NPOs operate because their agendas are increasingly shaped
by state requirements rather than by their visions/missions. Since the NPOs have been shaping
their work by funding criteria rather than by their organisational missions, there are concerns
about the extent of mission drift among non-profits (Cribb, 2005; O’Brien et al., 2009;
Tennant et al., 2006). This mission drift to adopt the mantle of the state service provider blurs
the boundaries between NPOs and the government and has led to NPOs being referred to as
convenient conduits for public services (Nowland-Foreman, 1997) and the pseudo-state
(Walker, 2004).
While some non-profits have had to trade a loss of independence against the (relative)
security of state funding, others have limited their activity to retain control over their goals
and priorities (Tennant et al., 2008). Many organisations have been active in seeking funding
from businesses and trusts, and have utilised the language of partnership as much in relation
to the business sector as to government (Tennant, 2009). While they actively seek new and
innovating funding opportunities, NPOs report that finding those opportunities is increasingly
difficult, especially if the NPO is not well known (ComVoices, 2016; Grant Thornton, 2016).
As a result, the NPOs are considering options such as collaborating or merging with other
organisations, setting up trading organisations or social enterprises (ComVoices, 2016; Grant
Thornton, 2013, 2016). However, the majority of the NPOs still need to rely on funding from
the government to deliver services in the community. The uncertain nature of this funding
environment continues to create significant operational challenges for NPOs.
1.4 Statement of the Problem

Research indicates that NPOs in Aotearoa New Zealand have been operating in a competitive
contracting environment informed by the neoliberal approach to social services delivery

16
(Aimers & Walker, 2016; O’Brien et al., 2009; Tennant, 2007, 2009). While the competitive
contracting environment, along with its focus on outcomes and business-oriented processes,
has helped some large NPOs to be the dominant service providers, the experience of small-
scale agencies has not been different. Many of the NPOs have struggled to maintain their
mission focus and receive adequate funding to support their services (O’Brien et al., 2009).
Although very limited, the available evidence suggests that funding and financing the
activities of the organisation have remained a primary concern for NPOs consistently over the
past few years (ComVoices, 2014, 2016; Grant Thornton, 2008, 2009, 2011, 2013, 2016). The
other significant operational challenges NPOs have faced are related to service delivery,
human resources, including staff and volunteers, and governance and board functioning
(ComVoices, 2014, 2016; Cribb, 2017; Grant Thornton, 2009, 2011, 2013, 2016) (see Chapter
3 for a discussion on these challenges). Additionally, NPOs have struggled with maintaining
their commitment to te Tiriti o Waitangi8 (Sanders et al., 2008). While there is limited
evidence available on the operational challenges faced by NPOs, there is no research evidence
available on how NPOs in New Zealand manage these organisational challenges. Due to the
dearth of research, it is also not clear whether NPOs are facing these issues due to a lack of
proper management of these organisational elements. How NPOs in New Zealand manage
their internal organisational elements such as the board, service delivery, human resources
and finance remains a mystery. At the same time, more people are relying on the services
provided by these NPOs, as society becomes complex and the need for social services are
drastically rising, and NPOs are currently overdelivering their services in a resource
constraint environment (ComVoices, 2014, 2016). The survival of NPOs and their
8 A treaty signed at Waitangi on 6 February 1840 (and in other parts of the country subsequently) by British Crown
representatives and different Māori chiefs. This established a British governor in Aotearoa New Zealand and recognised
Māori rights to their land and other properties and gave Māori the rights of British subjects. Although the Treaty is generally
considered the founding document of Aotearoa New Zealand as a nation; the English and Māori language versions of the
Treaty differ significantly, so the British and the Māori interpretations of the Treaty also differ (Sanders et al., 2008, p. 3).
Despite this, te Tiriti o Waitangi is the foundation for bicultural practice and NPOs are expected to demonstrate their
commitment to the Treaty.
17
programmes depends on how well they are managed. The management of NPOs is a concern
not only for the board and the chief executive officer (CEO) and managers, but also for people
who receive their services and for the funders who support the services. There are more of
these organisations being formed every day (McLeod, 2017), and they are increasingly
involved in complex and costly operations and influencing the lives and livelihoods of people.
As a result, the need for intelligent and competent management of NPOs has never been
greater. In the absence of research that provides evidence on the management of NPOs in
New Zealand, this research tries to address the significant research gap on the management of
NPOs in Aotearoa New Zealand. In particular, the research focuses on the management of the
board, service delivery, human resources and finance and the relationship between the
management of these organisational elements.
1.5 Statement of Purpose and Research Questions

The overall purpose of this cross-sectional survey study is to develop an understanding of
how NPSSOs in Aotearoa New Zealand manage their board, service delivery, human
resources and finance. To fulfil this purpose, the following research questions are addressed:
 How well do the non-profit social service organisations in Aotearoa New Zealand
manage their board, service delivery, human resources and finance? Is there any
difference between Māori and non-Māori non-profit organisations in their
management?
 Are there any significant relationships between the management of the board, service
delivery, human resources and finance in the non-profit social service organisations in
Aotearoa New Zealand? Do these relationships vary between Māori and non-Māori
non-profit organisations?
18
 How do the non-profit organisations demonstrate their commitment to te Tiriti o
Waitangi / The Treaty of Waitangi?
1.6 Significance of Study

As the political dialogue mainly focused on a “two-sector model” of the market and the state
in the past (Salamon & Anheier, 2000, p. 278), the non-profit sector did not receive enough
attention and has been largely invisible due to a lack of sufficient research in the sector
(Office for the Community and Voluntary Sector [OCVS], 2006). There is very little reported
research on the management of the non-profit sector in Aotearoa New Zealand. While the
sector surveys conducted by private consulting firms such as Grant Thornton (2003, 2005,
2008, 2009, 2011, 2013, 2016) and non-profit networking associations such as ComVoices
(2014, 2016) have provided good insight into the challenges faced by the NPO sector in
general, they did not investigate how NPOs manage their internal functioning. These surveys
were generic in nature as they involved all types of NPOs, and they did not specifically
address the issues faced by social service organisations. A perusal of the major databases and
bibliographic information such as Google Scholar, INFOTRAC and ProQuest shows an
absence of empirical research conducted on the management of NPSSOs in Aotearoa New
Zealand.
The rationale for this study emanated from the researcher’s desire to develop an
understanding of the management of NPOs in the absence of research in this area. It was
anticipated that, through a better understanding of the management practices and the
relationship between the dimensions of management, NPOs will be able to make more
informed decisions about how they manage their organisation. This research has the potential
to contribute to theory, practice, policy and education. One intended outcome of the study, on
a theoretical level, was to identify the relationships between the management of internal
19
organisational elements—the board, service delivery, human resources and finance—by using
a systems thinking conceptual framework. A model of NPO management was conceptualised
based on these relationships. Additionally, the research intended to identify the difference in
the management of the board, service delivery, human resources and finance between Māori
and non-Māori NPOs. This understanding will also contribute to the research and literature.
On a practical level, a second intended outcome of the study was to develop an understanding
of how well NPOs manage their board, service delivery, human resources and finance. This
analysis based on the management practices has identified the strengths and weakness in the
management of NPOs and will be useful for NPOs to understand their management practices.
Further, a third intended outcome contributes to the policy discussion on the management
capacities of the NPOs to deliver services and the NPOs commitment to te Tiriti o Waitangi /
the Treaty of Waitangi. As most of the NPOs receive their funding from the government, it
will be of interest to the government to assess the capabilities of the service providers and put
in place mechanisms and resources to improve their management capacities to deliver
services for the public. Ministries and government departments that contract out their services
have a responsibility to ensure the capacity of their contractors to deliver the outcomes.
Another intended outcome was the development of a management assessment tool that can
assist the NPOs to critically reflect on their management practices and use their learning for
better management practice to achieve their organisational mission. This management
assessment tool will also be useful for future researchers who might want to have access to
valid and reliable instruments to study the management of NPOs. As this study was expected
to develop an understanding of the management of NPOs, a final intended outcome was the
utilisation of this understanding in the education of non-profit management. It was expected
that the findings of this study will be useful in teaching and training on non-profit
20
management. Because of the distinct nature of the research, several organisations and people
have been identified as the potential beneficiaries of this research. They are:
 academicians and researchers in the NPO sector
 NPO managers
 NPO boards
 students of social work, human services and non-profit management
 social service NPOs
 other NPOs
 the government, particularly the Ministry of Social Development (MSD), Ministry of
Health and any other government departments that engage in contractual relations with
NPOs
 donors of NPOs
 the Charities Services
 any other parties interested in the non-profit sector.
1.7 Scope of Study

This research is located in Aotearoa New Zealand and focuses on the management of
NPSSOs only in Aotearoa New Zealand. This research is interested in the process of
management in NPOs rather than the organisational challenges they face such as funding.
This research examines only four dimensions of NPO management: the board, service
delivery, human resources and finance. These dimensions were selected because of the
prevalence of the challenges associated with them among the NPOs in Aotearoa New
Zealand. NPSSOs were selected to participate in this study based on a number of inclusion
and exclusion criteria (see Chapter 4: Research Methodology for details) and only
organisations that met these criteria are considered the population of this study. These
21
limitations were put in place to carry out this research within the constraints of an academic
degree.
1.8 Overview of the Thesis

This thesis consists of six further chapters. In Chapter 2: Non-Profit Management, a review of
literature focusing on building an understanding of the idea of non-profit management is
presented. This includes a review of the literature related to the sectoral differentiation,
terminologies and the definitional aspects of NPOs, and the distinct nature of NPO
management. A conceptual framework based on systems thinking was also formulated to
guide this enquiry. Chapter 3: The Non-Profit Sector in Aotearoa New Zealand maps the
historical development of the non-profit sector in Aotearoa New Zealand until 2017 to give an
overview of the its developments in New Zealand. This chapter also discusses the empirical
research on the current organisational challenges for NPOs. Chapter 4: Research
Methodology explains the methodology adopted for this study. It discusses the philosophical
and methodological assumptions taken into consideration to decide the research design. This
chapter also explains the sampling frame, sampling technique, data collection instrument and
ethical considerations. Chapter 5: Results presents the results of the study and Chapter 6:
Discussion discusses the results of the study in relation to the research questions and the
limitations of the study. The final chapter, Chapter 7: Conclusion, provides a summary of the
enquiry by discussing the implications of the findings and recommendations for future
research. The chapter finishes with a final reflection on the research journey.
1.9 Summary of the Chapter

This chapter introduced the research project by setting the context of the study. This context
provided an overview of the non-profit sector in Aotearoa New Zealand in terms of its
economic significance and also gave an overview of the NPSSOs in Aotearoa New Zealand.
22
The contextual discussion identified that the NPO sector makes a significant contribution to
Aotearoa New Zealand’s economy and social fabric. Despite their contribution and relevance,
they face significant challenges in their operations. However, there is no literature available
on how they manage their operations. The statement of the problem identified the
management of NPOs as the focus of the study due to the dearth of literature on this.
Following the problem statement, a statement of the purpose of research enquiry and the
questions it sought to answer was provided. This chapter also identified the significance and
scope of the study to set the parameters of this research enquiry. The next chapter examines
the literature on the concept of non-profit management to develop a conceptual understanding
of the topic. To develop this understanding, the next chapter looks at the debates on NPOs
before moving onto the management of NPOs. It also presents a conceptual framework at the
end as an outcome of the discussion.

23
CHAPTER 2: NON-PROFIT MANAGEMENT: A

CONCEPTUAL REVIEW

how the NPSSOs in Aotearoa New Zealand manage their board, service delivery, human
resources and finance. The previous chapter, Introduction, discussed the context of this
research and explained the research problem, purpose and questions, and the significance and
scope of this study. Since the first chapter introduced the context of this research and the
research problem, the purpose of this chapter is to develop an understanding of the concept of
the management of NPOs. This chapter essentially argues that non-profit management cannot
be understood without first developing an understanding of what NPOs are. A conceptual
understanding of the phenomenon of NPOs is developed in this chapter by looking at the
debates on the three sectors in society, the terminological issues related to the concept of
NPOs, the theories that explain the existence of NPOs, and the definitional issues related to
the concept of NPOs. Based on the understanding of the concept of NPOs, this chapter then
discusses the management of NPOs and the distinctive nature of non-profit management. The
need for a comprehensive view on NPO management is discussed, and the chapter concludes
with a systems thinking conceptual framework to guide the enquiry.
2.2 Three Sectors of Society

Organisations are an inevitable facet of human life. In traditional societies, most activities
were organised around primary relations predominant in family, clan, tribe, ethnic group and
community. Human beings tended to live in these informal groups in society because it was
the collective that protected their socio-economic and political interests even before any forms
of government existed (Rahman, 2003). On the other hand, formal organisations are an
24
integral part of modern societies; people and activities are organised around secondary
relations that contribute to specific values and goals in society. Life in modern globalised
societies is increasingly reliant on various organisational settings as we associate with them in
sickness and in health, at work and at play and as places of worship. Haralambos and Heald
(1980) argued that organisations are an inseparable part of our lives: we are born in hospitals,
educated in schools, employed in profit, non-profit and government agencies and even laid to
rest in churches or funeral homes. According to the influential American sociologist Amitai
Etzioni (1969), organisations are “social units (or human groupings) deliberately constructed
and reconstructed to seek specific goals” ( p. 3). As social units, organisations are
characterised by the complex mesh of human relationships and interactions that encompass
them (Hughes & Wearing, 2007). Robbins and Barnwell (2006) defined organisations as a
“consciously coordinated social entity, with a relatively identifiable boundary, which function
on a relatively continuous basis to achieve a common goal or set of goals” (p. 6). More
recently, Chenoweth and McAuliffe (2012) explained that “an organisation consists of
individuals and groups of people who come together to pursue particular goals and
objectives” (p. 203). While these definitions argue that organisations are necessarily a group
of people with common goals and identifiable boundaries regardless of their purpose, they are
fundamentally different from each other.
Debates over the classification of societal structures persist in academic, social and
government circles. Organisational theorists have developed approaches based on specific
criteria, hence generating different classifications. An earlier analysis of complex
organisations by Westrum and Samaha (1984) employed the practices related to the nature of
membership and notion of profit to differentiate various organisational forms. They argued
that organisations constituted by full-time members are different from organisations with part-
time members, and organisations whose central concern is profit are different from
25
organisations with a non-profit motive. Based on these two assumptions, Westrum and
Samaha (1984) classified organisations into three main types: bureaucracy, enterprises and
voluntary organisations. According to them, bureaucracy is a full-time organisation formed to
carry out a specific mission such as running the affairs of the state, providing full-time
employment to various incumbents and functioning according to the laws laid out by the state.
The funds that support a state bureaucracy are collected from the public in the form of taxes
and fees. The second type of enterprise is a full-time organisation set up to earn profit by
producing goods or services or by making profitable investments in other organisations. The
primary beneficiaries of these organisations are the owners of the organisation and the
organisational structure is geared towards maximising operational efficiency in a competitive
environment. The last type, voluntary organisations, are part-time service-oriented
organisations with a non-profit motive. Westrum and Samaha (1984) argued that in an ideal
voluntary organisation the members make unpaid contributions in terms of labour, time,
professional expertise and vision to the organisation. Similarly, Nerfin (1986) used the
metaphors of the prince, the merchant and the citizen to differentiate the three sectors of
society. The prince represents the first sector—the government—and by using command as
the resource mobilisation mechanism, the government allocates national resources to address
the needs of the country and sets rules that control the behaviour of the people. The merchant
represents the business organisations. Being the second sector, the businesses produce goods
and services to meet the resource needs and make a profit. The citizen represents the third
sector, which mobilises resources through voluntary action. Similarly, Brown and Korten
(1989) differentiated the various institutional structures in society as government, commercial
and voluntary sectors because they have distinctive characteristics based on conceptual
meanings. They mainly defined and differentiated the three sectors based on the coordination
mechanism available to organisations to mobilise the resources on which their function

26
depends. Brown and Korten (1989) argued that government organisations mobilise their
resources through authority and coercion, such as the power to tax, for their primary concern
of preserving social order and social control. Commercial organisations use the mechanism of
negotiated exchange for their primary concern of producing goods and services. In contrast,
voluntary organisations use the mechanisms of shared values and expectations to actualise
social vision. Brown and Korten (1989) concluded that “voluntary organisations represent a
distinct class of organisations that depend on energy and resources given freely by their
members and supporters, because they believe in organisational missions, not because of
political imperatives or economic incentives” (p. 5). More recently, Chenoweth and
McAuliffe (2012) classified organisations as government or public agency, third sector
organisations and private for-profit organisations based on their auspice or authority base.
According to them, “an organisation’s auspice refers to how it is mandated and often
underpins the kind of funding it attracts” (Chenoweth & McAuliffe, 2012, p. 208). According
to their classification, government organisations are authorised, established and operated
through statute or law. Private for-profit organisations are legal entities authorised through
legal charter or partnership agreement or articles of association. Third sector organisations are
under the authority of an incorporated body with legal jurisdiction in the country where they
operate (Chenoweth & McAuliffe, 2012). These discussions provide a useful classification of
organisations based on their structure, purpose and operating mechanism and are summarised
in Table 2-1. Three sectors of society.

27
Table 2-1. Three sectors of society

Classification Sector Nature Purpose Resource Auspice/ Examples
mobilisation Authority
First Government Public Maintain Authority & Statute or law Police
(Prince) (Public) benefit social Command
order
Second Business For-profit Produce Trade and Legal charter, Corporations
(Merchant) (Private) goods and exchange partnership or
services articles of
association
Third Voluntary Not-for- Actualises Shared Incorporation Faith-based
(Citizen) profit social values and organisations
vision consultation
In contrast to the perspectives discussed above regarding the three sectors of society, Uphoff
(1995) argued that characterisation of society as three sectors and voluntary organisations as
the third sector is misleading. He argued that the real third sector is located somewhere
between the public and the private sectors and comprises people’s associations and
membership organisations rather than voluntary organisations. To Uphoff (1995), the
voluntary sector is a subsector of the private sector, and although its constituents are service
organisations undertaking voluntary collective action and self-help, they operate much like
private businesses. He thus considered them a subsector of the private sector and used the
synonym private voluntary organisations. While this view has some acceptability among
management academics, it has very limited acceptability among people working in NPOs
(Rahman, 2003). It has also been argued that there is a fourth sector consisting of an informal
or household sector (Alessandrini, 2010, as cited in Kenny, 2013). However, this term is yet
to gain acceptance because the fourth sector is also often used to describe the hybrid social
entrepreneurial sector, which combines aspects of market and community sectors (Billis,
2010).
2.3 Terminological Issues

While there is consensus in the literature on the three different sectors in society, there is no
agreement on the terminology used to identify organisations that are different from
28
government and commercial organisations, which is evident from the terminologies
researchers have used to identify the three sectors of society. The structural location of NPOs
against state and market in the provision of services and goods has evoked considerable
academic interest in recent times, contributing to a wide variety of terminologies. This has
resulted in confusion among researchers, academicians and practitioners about the
terminology that should be used to refer to these organisations. There is no consistency in the
use of the terminology in the literature, and there is a need for conceptual clarity to determine
what is and what is not included in the phenomenon if we undertake empirical research. This
section looks at these terminological issues.
Rahman (2003) identified around 40 terms and Najam (1996, as cited in Lewis, 2001)
developed a list of 48 different initialisms used by practitioners and researchers all over the
globe, including TSO (third sector organisation), VO (voluntary organisation), NFPO (not-
for-profit organisation), NPO (non-profit organisations), NGO (non-governmental
organisation), CO (community organisation), CSO (civil society organisation) and GONGO
(government organised non-governmental organisation). Kenny (2013) discussed a similar
issue of using various terms interchangeably with the term third sector. Kenny (2013)
identified four major terms in the international lexicon: “voluntary association; nonprofit or
not-for-profit organisations; non-government or non-governmental organisations and civil
society organisations” (p. 176). Kenny (2013) argued that while these terms refer to the same
phenomenon, there are subtle differences and emphases in their meanings. Lewis (2006b)
argued that labelling has important resource and policy implications and terminological issues
are hence not merely a semantic problem. Lewis and Kanji (2009) proposed that each of the
terms commonly used to describe organisations depict one aspect of the social reality of the
sector as an alternative to government and business sectors. However, while demonstrating
one aspect, each term typically overlooks other aspects (Anheier, 2005).
29
Lewis (2006b) observed that these organisations are called non-governmental organisation in
one country, but are called non-profit or not-for-profit or voluntary organisation in other
countries for no apparent reason, but they are culturally generated in specific social, economic
and political contexts. In making sense of the different terms, Lewis and Kanji (2009) argued
that each term is set within different traditions, narratives and locations. The term voluntary
association has strong currency in the United Kingdom in the context of a longstanding and
significant tradition of volunteering and also changes in welfare provision where they are
positioned as agents of state welfare delivery (Kenny, 2013; Lewis, 2001). The terms
nonprofit or not-for-profit are commonly used in the United States and are often described as
an American approach to third sector organisations (Kenny, 2013). This term highlights the
nature of organisations as not generating and distributing profits and has gained currency in
the United States, where alternative forms of market organisations can receive financial
benefits if they are non-commercial and non-profit-making entities. The third term, non-
governmental organisation or non-governmental developmental organisation, is applied to
organisations in the global south or developing countries such as Bangladesh, India and
Nepal. Lewis and Kanji (2009) argued that they offer people-centred bottom-up approaches as
an alternative to governments. In the Western world view, the terms voluntary association
and non-profit organisation are reserved for organisations in the developed world, and the
term non-governmental organisation is reserved for the developing world (Kenny, 2013). In
the Aotearoa New Zealand context, Tennant et al. (2008) argued that there is no single term
used; rather, a number of terms are used interchangeably to refer to NPOs. They identified the
common terms as non-profit (or not-for-profit), voluntary, community, voluntary welfare,
non-governmental, third sector (sometimes fourth) and independent sector. They also argued
that some of the legally constituted NPOs have not necessarily identified themselves as part of
the NPO sector; instead, they may see themselves as part of the social, cultural, sporting or
30
economic sectors. McLeod (2017) argued that people use various terms in Aotearoa New
Zealand to define organisations by what they are not. While these terminological issues have
created problems in defining the nature of these organisations (Lewis, 2001, 2010; Martens,
2002; Salamon & Anheier, 1992b; Salamon et al., 2003), there is consensus that these
organisations are different from government and commercial organisations, and scholars use
the terms interchangeably.
2.4 Theoretical Approaches to Non-Profit Organisations

While the sectoral differentiation provides an overview of the significant differences between
the various organisations in our societies, it does not explain why NPOs exist, how they
behave once they are created and what impact and difference they make in society. Scholars
have identified different theories to explain the situation. While the theoretical interest is
relatively recent, the theories were initially generated from the realisation that non-profits
have their specific dynamics and a considerable presence in the production of goods and
services and generate considerable employment opportunities in society. These theories are
primarily accepted as economic and sociological approaches to understanding NPOs (Ahmed,
2013; Anheier, 2005, 2014; Dollery & Wallis, 2002; Grobman, 2011) and are briefly
discussed below.
2.4.1 Economic Approaches

Economic approaches explain the origins, behaviour and impact of NPOs, which are complex
and heterogeneous from a demand and supply perspective (Ahmed, 2013; Anheier, 2005;
Dollery & Wallis, 2002). The demand perspective looks at the genesis of NPOs as a response
to the failures of other sectors of society such as the government and the market and includes
theories such as government failure, market failure or contract failure, and voluntary failure.
The supply perspective looks at the development of NPOs as the outcome of social
31
entrepreneurship and includes entrepreneurship theory and stakeholder theory (Dollery &
Wallis, 2002). These theories are briefly summarised below.
Government failure: Initially developed by Weisbrod (1975), and also known as public good
theory or heterogeneity theory, this theory argues that NPOs originate due to governments’
limitations in providing services due to the heterogeneity of people’s demands and the
structure of the democratic process, which results in “exceeding what some voters demand
and falls short of what others demand” (Weisbrod, 1977, p. 55). This leaves many voters
dissatisfied with the output of the government in meeting demands for public goods and they
are forced to adjust with four alternatives. Firstly, voters can leave the jurisdiction of the
failed government and migrate to other jurisdictions, which may provide an optimal level of
public goods such as education or health services. Secondly, voters with similar demands and
preferences (demand homogeneity) can form their own lower-level governments to meet the
optimum levels of public goods or lack of services provided by state governments by
convincing a local government to provide them with such amenities as parks and libraries.
Thirdly, dissatisfied voters can purchase alternative commodities and services in private
markets, such as the services of private security companies if police services are inadequate.
Finally, voters can create NPOs to provide public goods when private markets do not meet the
demand or until the demand increases to the extent that the government can meet the demands
of the median voter (Anheier, 2005; Dollery & Wallis, 2002; Grobman, 2011; Kingma, 1997).
NPOs are conceptualised as a response to the failure of the government to meet the private
demands for public goods and also the subsequent failure of markets to supply the public
goods because they may be economically inefficient to produce. Weisbrod’s theory predicts
that the NPO sector will be more prevalent in heterogeneous societies where diversity is
reflected regarding ethnicity, religion, language, age, lifestyle, sexuality, income and so on
(Anheier, 2005; Grobman, 2011). Despite its originality, Weisbrod’s model has been subject
32
to criticism. This theory has been criticised for not recognising the interactions of public,
private and non-profit sectors that represent a system of collective delivery of goods and
services (Dollery & Wallis, 2002). It has also been criticised for its failure to explain the role
of non-profits such as nursing homes whose services are not public goods. It was also
observed that this theory does not explain why NPOs respond to government shortcomings
rather than to those of for-profit organisations (Roberts, 1987, as cited in Dollery & Wallis,
2002). As Hansmann (1987) asks, “What is it about non-profit firms that permits them to
serve as private suppliers of public goods when proprietary firms cannot or will not?” (p. 29).
Henry Hansmann’s (1987) contract or market failure theory aptly deals with this question and
is discussed below.
Contract or market failure theory / Trust-based theories: Initially developed by
Hansmann (1987), and also known as trust theories (Anheier, 2005), these theories focus on
the limitations of the market system to address the needs of various groups (Ahmed, 2013).
The theory argues that market or contract failure arises in situations known as information
asymmetry, “in which, owing either to the circumstances under which a service is purchased
or to the nature of the service itself, consumers feel unable to evaluate accurately the quantity
or quality of the service a firm produces for them” (Hansmann, 1987, p. 29). Dollery and
Wallis (2002) put this differently, as “circumstances where ordinary contractual mechanisms
do not give consumers sufficient protection from unscrupulous producers and thus make
‘contract failure’ possible” (p. 12). Under these circumstances, consumers are more likely to
choose NPOs because NPOs do not distribute profits to their owners and thus would not
sacrifice quality for profit, whereas for-profit organisations have both incentive and
opportunity to exploit consumers (Ahmed, 2013). NPOs have a comparative advantage over
profit-making organisations when the inefficiency of NPOs is outweighed by the consumer
protection based on the non-distributional nature of NPOs giving them a higher

33
trustworthiness (Anheier, 2005). Grobman (2011) argued that NPOs appear trustworthy
because the NPO leaders are motivated to act in the interests of the public rather than seeking
profit and power. The behaviour of NPOs is more trustworthy than that of for-profit
organisations because their governing structure is more pluralistic and has been influenced by
stakeholders such as donors, consumers and community leaders (Grobman, 2011). Although
this theory answers some questions left by government failure theories, it has its limitations.
James (1987) suggested that contract theories overestimate the trustworthiness of NPOs and
overlook the incentives they have to downgrade the quality of services. James (1987) also
argued that ideological groups founded many NPOs to promote social visions, and thus the
stance of commitment explains the choice of NPOs rather than contract failure. Salamon
(1995, as cited in Anheier, 2005) argued that market failure theories fail to take account of
government because they focus on non-market solutions over market solutions. Anheier
(2005) concluded that in this sense, market failure theory is complementary to government
failure theory.
Voluntary failure theory/Interdependency theory: While the government failure and
market/contract failure theories imply conflicts between NPOs and other sectors such as the
government and the market, these models of utility and consumer preference underestimate
the political and cultural facets of NPOs and their societal significance (Zuidervaart, 1998).
Salamon (1995) criticised the government failure and contract failure theories because they
considered NPOs a substitute for government in the provision of collective goods. These
theories claim that the existing partnership between government and NPOs should not exist
(Zuidervaart, 1998). Salmon criticised them for their failure to describe this symbiotic
relationship between government and NPOs (Anheier, 2005). In contrast, voluntary failure
theory, also known as the interdependency theory, proposed by Salamon (1995), argues that
the non-profit sector and the government are partners rather than rivals in the provision of
34
goods and services, and NPOs typically precede the government in addressing social
problems because of their collective action, sense of social obligation and relative quickness
of their responses to community issues. Salamon (1995) also suggested that governments do
not displace NPOs, and in fact, they act as a significant force that endorses the activities of
NPOs with direct and non-direct monetary support in the form of grants and contracts. Such
interdependence of government and NPOs is championed by the significant public funding
available to NPOs in developed countries such as the United States and Aotearoa New
Zealand. Salamon found a direct correlation between the growth of the NPO sector and the
rapid expansion of the welfare state in the United States between 1950 and 1980 (Salamon,
1995; Zuidervaart, 1998). As a result, the government is not the typical response to market
failure and NPOs are not the imitative institutions filling in for government failure. Instead,
NPOs act as a primary response to market failure and governments act as imitative institutions
responding to the inherent weaknesses of NPOs, such as “philanthropic insufficiency,
philanthropic particularism, philanthropic paternalism and philanthropic amateurism”
(Anheier, 2005, pp. 131–132). The government arises in response to the failure of NPOs to
provide collective goods due to these weaknesses, and governments and non-profit sectors
complement each other with their respective strengths to compensate for each other’s
weaknesses, and this makes their collaboration sensible (Anheier, 2005; Salamon, 1995;
Zuidervaart, 1998).
Although voluntary failure theory gives greater social significance to the non-profit sector, it
is not free from criticism. Zuidervaart (1998) argued that this theory shares the fundamental
assumption of market failure and government failure theories about the role of NPOs to
compensate for the failure of other sectors to provide collective goods. Zuidervaart (1998)
even argued that voluntary failure theory simply switches the positions of the government and
the non-profit sector by changing the order from “contract failure > government response and
35
failure > voluntary response to contract failure > voluntary response and failure > government
response” (p. 3).
Entrepreneurship theory: In contrast to demand perspective theories such as market failure,
government failure and contract failure theories, entrepreneurship theories of NPOs attempt to
explain their existence from a supply-side perspective (Anheier, 2005). The entrepreneurship
theory argues that NPOs always attempt to create some form of immaterial social values and
are interested in non-monetary gains such as faith and they use the provision of services such
as social work to achieve some broader social goals (Anheier, 2005). James (1987) noted that
non-profits make their presence in strategic areas of primary socialisation (day care and
schools), critical life situations (hospitals, hospices and rest homes) and situations of
particular need (disability, divorce and other life events). Anheier (2005) summarised this as
“non-profit entrepreneurs seek out such opportunities and combine service delivery with
religious or otherwise ideologically coloured ‘messages’ in an effort to garner adherents,
believers, or recruits” (p. 128). As a result, non-distribution constraints of monetary profits
are only secondary to their organisational behaviour. The motives of the entrepreneur play a
significant role in this process (Anheier, 2005; James, 1987). While this theory can be
considered an explanation of the existence of non-profits, it does indicate that NPOs are
created by an entrepreneurial leader or group of leaders and thus end up with the behaviour of
organisations.
Stakeholder theory: Influenced by the work of Ben-Ner and Hoomissen (1991, as cited in
Anheier, 2005), stakeholder theory acknowledges that NPOs exist because of market failure
from a demand side and NPOs are created by entrepreneurs from a supply side (Anheier,
2005). Ben-Ner and Van Hoomissen (1991, as cited in Anheier, 2005) called all the interested
parties on the demand and supply side stakeholders and proposed that NPOs be built upon
36
“the interests and behaviours of stakeholders in the provision of trust related goods” (p. 129).
This theory argues that some interested parties can become demand and supply-side
stakeholders at the same time when they are concerned about the quality of the service
provided and protection from moral hazard. They then exercise control over the service
delivery themselves (Anheier, 2005). Anheier (2005) cited an example of parents deciding to
start a day care centre for their children to achieve greater control over the services. However,
Anheier (2005) also cautioned that stakeholder control only applies predominantly to non-
rival goods, as providers cannot downgrade the services provided.
The economic theories have mainly been criticised for their assumptions about the factual
primacy of the capitalist market economy in which NPOs exist (Zuidervaart, 1998). The
economic approaches assume that the economic role of NPOs is to compensate for the for-
profit and government failures. This may not only misinterpret the underlying practices of
NPOs as mission-driven organisations, but it also ignores “the ways in which the economic
role of non-profit organisations changes” (Zuidervaart, 1998, p. 3). The following discussion
on social theoretical approaches to NPOs discusses these concerns.
2.4.2 Sociological Approaches

Unlike the rational choice models inherent in economic approaches, sociological approaches
give an entirely different treatment to notions of trust and rationality while analysing the
existence of NPOs and include theories such as social origins theory, trust theory, mission
theory and commons theory. These theories are briefly summarised below.
Social origins theory: Salamon and Anheier (1998) developed social origins theory as a
response to the limitations of economic approaches and conventional welfare approaches and
argued that NPOs in different countries have different historical foundations and thus
different social and economic relevance. Salamon and Anheier (1998) identified four models
37
of NPO development and argued that these NPO development models and their policy-
making style aid in estimating the cross-national differences in the scale and structure of
NPOs. Firstly, in the liberal model, prevalent in countries such as the United States and the
United Kingdom, the large size of NPOs is linked with the lower level of social welfare
spending characterised by a lower level of working-class political influence. Secondly, in the
social democratic model, prevalent in Scandinavian countries such as Sweden, Norway and
Denmark, the relatively small size of NPOs is linked with the extensive provision of state-
sponsored and state-delivered social welfare protections characterised by the effective
political influence of the working class. Salamon and Anheier (1998) explained that the
presence of NPOs is still not limited as most of them are involved in advocacy and personal
expression, rather than service delivery. Thirdly, in the corporatist model, evident in countries
such as France and Germany, states attempt to preserve the NPOs so that they can deter
radical demands for social welfare provisions while retaining the support of social elites. As
evident in Japan, in the final statist model, the state exercises its power by developing social
policies on behalf of the business and economic elites rather than for the working class. This
results in limited state-sponsored social welfare protections that are not associated with a
large presence of NPOs as in the liberal model and that remain highly constrained (Salamon
& Anheier, 1998). While this theory establishes a rationale for the growth of the non-profit
sector in different countries, Anheier (2005) later concluded that social origin theory is
difficult to test empirically compared with economic theories because of the complexity and
relative bagginess of the factors it identified. Anheier (2005) also commented on the
problematic nature of qualitative judgements about the power of social groups such as
economic elites and the working class in the theory (Anheier, 2005). Anheier (2005)
concluded that the four models identified in social origin theory are really “archetypes”, and
38
in reality, many cases may be “hybrids” that incorporate features from more than one model
(p. 137).
Trust theory: Sociological approaches place significant emphasis on an individual’s ability
to place explicit trust in the motivation and behaviour of fellow individuals in society and
view trust as central to a social order determining social relations and transactions among
individuals (Anheier & Kendall, 2000). According to Anheier and Kendall (2000), trust and
voluntary action are essential attributes of NPOs, and NPOs make use of symbolic
representations of pre-existing trust to gain prominence in social relation transactions and
depict institutionalised enactment of trust routines. For instance, many NPOs operate under
religious beliefs and values have an advantageous position to attract resources about pre-
existing trust associated with those religious beliefs. Although trust may seem to be an
outcome for these organisations, they are also highly fragile as trust violation could result in
far-reaching consequences. The political science approach considers that trust is essential in
the creation of networks of social ties and is seen as a social capital civic virtue. NPOs are
viewed as incubators of values and civic attitude and valuable creators of social capital. This
also establishes the cross-cultural applicability of trust (Anheier & Kendall, 2000). The nature
and character of NPOs are substantially influenced by social parameters such as trust, which
determine its priorities, activities and functions, the behaviour of its members and its
relationship with other social structures of society such as the market and the state (Anheier,
2005).
Mission-driven theory: In response to the limitations of the failure theories, Zuidervaart
(1998) proposed a compelling theoretical argument about NPOs’ existence and their
relevance in relation to their mission. According to Zuidervaart (1998), many NPOs
deliberately seek to be mission driven; he suggested that the purpose of NPOs is to provide
39
socially significant services and that the non-distribution constraint is a legal codification for
self-understanding. The existence of any NPO depends upon the mission, and any strategy or
policy adopted should further that mission. As solidarity is the primary rationale for resource
sharing among NPOs, they should not be considered a response to market failure. They
should be considered the response to the need to care for others and to participate in the
community rather than the need for self-preservation and accumulation of private wealth.
Government programmes also should not be considered a response to voluntary failure;
rather, they should be considered a measure of social justice for the vulnerable sections of
society that are marginalised and oppressed. Zuidervaart (1998) talked about social economy
instead of the market economy and argued that NPOs are not designed to do business.
Zuidervaart (1998) strongly criticised the biases held by economists in capitalist societies who
maintain that the pursuit of private profit is the only way to do business. Zuidervaart (1998)
concluded that every attempt to counter these biases by demonstrating the success of NPOs
simply confirms the bias so long as the criteria for measuring the success comes from the for-
profit sector. This proposition reaffirms the fact that NPOs are mission-based organisations
established to protect and assist the vulnerable members in society, thus advancing the pursuit
of social justice along with the government.
Commons theory: Lohmann (1992) proposed the theory of the commons and defined the
commons as “an economic, political and social space outside the market, households, and
state in which associative communities create and reproduce social worlds”, which are
defined as the images, meanings and sense of reality shared by autonomous, self-defining
collectivities of voluntarily associating individuals” (p. 172). Grobman (2011) observed that
the commons share commonalities such as language, education and culture that surpass the
markets dominated by the idea of maximising individual utility. These commons are
essentially the creators of NPOs. Grobman (2011) commented that Lohmann limited his
40
theory of the commons to exclude NPOs engaged in “unproductive or volunteer labour” (p.
60) in contrast to all other theories on NPOs. The goods produced by the commons are more
likely to benefit individuals or groups than the producer and thus are different from both
private and public goods.
It is very evident from this review of theoretical approaches to NPOs that economic
approaches dominate in establishing the existence of NPOs in society. NPOs are mainly
conceived of as the product of state and market failure. Alternative sociological approaches
consider qualitative interpretations about the parameters of NPOs’ existence such as trust and
social classes. While the two theoretical approaches seem to be oppositional, they are also
complementary, in this author’s view, in explaining the existence of NPOs and their
behaviours. However, existing literature still needs to find the connections between these
microeconomic and macrosocial approaches. Nevertheless, considering the abstract nature of
social science theories, these NPO theories should be commended for their simplicity
(Anheier, 2005), although in being simple abstractions, they may not be able to capture and
demonstrate the richness, variety and complex nature of NPOs. While these theories explain
the various perspectives on the existence of NPOs, they do not offer any definitions that
explain the nature of these organisations. The following discussion looks at these definitional
aspects.
2.5 Definitional Aspects of Non-Profit Organisations

Despite the efforts of research in this sector, there is no agreement at an international or
interdisciplinary level on a definition that can precisely analyse what constitutes an NPO
(Lewis, 2001, 2009; Martens, 2002; Muukkonen, 2009). One reason cited for this
disagreement is the diversity that exists within the sector and different societal contexts that
make generalisation problematic (Lewis, 2010). On one level, the terminological issues are
41
blamed for this definitional problem because concepts are not value free and are
contextualised in the cultural and disciplinary milieu (Muukkonen, 2009). Corry (2011)
argued that at a disciplinary level, the economic approach to NPOs emphasises the non-
distribution of the profit generated and a sociological approach to NPOs focuses on the
motivation of the participant—driven by the values that exist in the particular society.
Accordingly, scholars have attempted to define NPOs in such a way that makes sense to them.
Different authors have classified various definitional approaches differently. An earlier
attempt of Salamon and Anheier (1992a, 1992b) to define NPOs revealed that definitions are
either legal (referring to the registration and status), economic (referring to the source of the
resources) or functional (referring to the type of activities undertaken). Martens (2002)
divided the definitional attempts into judicial and sociological approaches. Martens
summarised that the judicial approaches focus on the legal status of NPOs in the national and
international context, and sociological approaches emphasise the structure and functions of
NPOs (2002). Lewis (2006b) shared a similar division: a legal definition that focuses on a
general view of NPOs and a developmental view that focuses on NPOs’ concerns with social
and economic changes. Corry (2011) classified the definitions into American and European
views and argued that the American view is that NPOs are “a discrete sector characterized by
certain qualities such as civility” whereas the European hybrid view is that they are “mixtures
of other kinds of social organization such as private and public, or hierarchic and anarchic” (p.
11). The following section offers some examples of these various approaches to defining
NPOs.
2.5.1 Legal Definitions

According to Anheier (2005), the most straightforward definitions of NPOs are legal
definitions in any country. Legal definitions establish that NPOs are organisations that take a
legal form such as a charity, society, trust or organisation that is exempted from taxes
42
(Salamon et al., 2003). In the Aotearoa New Zealand context, the laws of incorporation
establish the legal validity of NPOs. Tennant et al. (2006) identified five forms of
incorporation in Aotearoa New Zealand: incorporated societies, charitable societies or trusts,
companies, friendly societies and industrial or provident societies. The most common forms
of non-profit incorporation are incorporated societies under the Incorporated Societies Act
1908 and charitable societies and trusts under the Charitable Trusts Act 1957 (Tennant et al.,
2006). Although the legal definitions establish the validity of NPOs and what constitutes an
NPO in a particular country in accordance with the laws prevailing in that country, they could
be confusing when a number of laws exist for registration for organisations with the same
purpose as that in Aotearoa New Zealand. They are also irrelevant in comparative contexts, as
different countries have different legal traditions (Anheier, 2005; Salamon et al., 2003).
2.5.2 Functional Definitions

The focus of functional definitions is on the purpose of organisations, and they define the
notion of charity, civil society and not for profit. The functional definitions commonly state
that NPOs are organisations that promote the public good, and carry out activities that serve
the public interest such as poverty reduction, protection of children and the aged, and
promotion of public health (Anheier, 2005; Salamon et al., 2003). As an example, the
Aotearoa New Zealand Charities Act 2005 No. 39, section 5, states “charitable purpose
includes every charitable purpose, whether it relates to the relief of poverty, the advancement
of education or religion, or any other matter beneficial to the community”. The idea of public
benefit is a core notion in functional definitions and offers a clear view of the purposes.
However, people may have different ideas about what constitutes a valid public purpose as
distinct from the legal notions as stated in the Charities Act 2005. Salamon et al. (2003)
argued that the term “pursuit of public purpose” by definition makes it impossible to disprove.
43
2.5.3 Economic Definitions

The economic definitions emphasise the source of funding resources and differentiate the
NPO sector from other sectors by arguing that NPOs are organisations that do not receive
their income from the market or through government support or taxation (Anheier, 2005).
They instead receive revenue from voluntary contributions of their members or from private
philanthropy (Anheier, 2005; Salamon et al., 2003). For example, the 1993 economic
definition of the UN (2003) System of National Accounts states that:
Nonprofit institutions are legal or social entities created for the purpose of producing
goods and services whose status does not permit them to be a source of income, profit,
or other financial gain for the units that establish, control or finance them. In practice,
their productive activities are bound to generate either surpluses or deficits but any
surpluses they happen to make cannot be appropriated by other institutional units. (p.
12)
This definition focuses on the common feature of NPOs of not distributing their profit (UN,
2003) and defines them as residual economic entities (Anheier, 2005). In a sense, they are
leftover organisations after corporations, government units and household units are identified
in the System of National Accounts. While economic definitions provide an understanding
about the nature of NPOs as non-profit-distributing economic units, they have been criticised
for their rigid focus on the financial behaviour of NPOs and their lack of attention to other
important aspects such as volunteerism and social mission (Anheier, 2005; Salmon et al.
2003). The structural-operational definition of NPOs was suggested as an alternative to the
limitations of legal, functional and economic definitions.
2.5.4 The Structural-Operational Definition

This literature review on NPOs has revealed that the most frequently referred to definition in
the research on the NPO sector is the structural-operational definition, initially conceptualised
44
by Salamon and Anheier (1992b) as part of the seminal Comparative Nonprofit Sector Project
undertaken by the Center for Civil Society Studies at John Hopkins University, Baltimore,
United States. The structural-operational definition emphasises the basic structure, common
features and operation of NPOs instead of the purpose or the revenue structure focused on by
functional and economic definitions. According to the structural-operational definition
(Salamon et al., 1999, pp. 3–4; Salamon et al., 2003, pp. 7–8), NPOs are organisational
entities with five basic features; they are:
 organisations, that is, they have an institutional presence and structure
 private, that is, they are institutionally separate from the state
 not profit distributing, that is, they do not return profits to their managers or a set of
“owners”
 self-governing, that is, they are fundamentally in control of their own affairs
 voluntary, that is, membership in them is not legally required, and they attract some
level of voluntary contribution of time or money.
Salamon et al. (2003) argued that the essential attributes of NPOs as identified in the
structural-operational definition make it different from other definitions. For instance, they
argued that the term organisations includes both formal (registered) and informal (non-
registered) organisations and thus covers the NPOs not covered under legal definitions. The
attribute of private essentially outlines that NPOs are structurally different from the
government even if they receive support from the government. In this context, this definition
is different from economic definitions because they exclude organisations from the NPO
sector if they receive significant government support. The non-profit distributing dimension
implies that they can generate profit in the course of their operations, but they need to be
utilised to achieve organisational objectives instead of distributing profit to the directors. This
45
indicates the notion of public purpose as discussed in a functional definition, but without the
trouble of specifying the meaning of public purpose (Salamon et al., 2003). The international
recognition for this definition can be seen in the UN (2003) Handbook on Nonprofit
Institutions in the System of National Accounts. It introduced a simplified version of the
structural-operational definition that suggests NPOs are “(a) organizations; that (b) are not-
for-profit and, by law or custom, do not distribute any surplus they may generate to those who
own or control them; (c) are institutionally separate from government; (d) are self-governing;
and (e) are non-compulsory” (UN, 2003, p. 17). The last criterion, “voluntary”, in a structural-
operational definition is replaced with “non-compulsory” in the UN (2003) definition and
means:
that membership and contributions of time and money are not required or enforced by
law or otherwise made a condition of citizenship … organisations in which
membership, participation or support is required or otherwise stipulated by law or
determined by birth (e.g., tribes or clans) would be excluded from the non-profit. (p.
20)
The structural-operational definition has been empirically tested and validated through an
inductive approach in 35 countries through the John Hopkins Comparative Nonprofit Sector
Project and thus can be claimed as the most accepted working definition of NPOs. While this
definition has a global acceptance for its “cross-cultural rigour” (Lewis, 2006b, p. 47) in
measuring the observable features of NPOs, it is not free from criticism. Kenny (2013) raised
four issues with the ambiguity around the suggested nature and attributes of NPOs. Firstly,
and this view is also shared by Lewis (2006b), the feature of non-profit distributing excludes
key players in the social economy such as cooperatives and mutual aid societies in many
countries because they generate profit. These organisations are voluntary, self-governing and
46
involved in social development. Secondly, there is an issue with the notion of boundaries
because state and market sectors overlap with third sector organisations, especially when
NPOs are involved in entrepreneurship activities and act as a service delivery contractor for
the government. The third issue is the notion of NPOs having an institutional presence and
structure because the NPO sector largely consists of loosely structured small-scale
organisations. Finally, the meaning of the term voluntary raises some questions because it is
not clear whether the organisation, its activities or the participants are voluntary (Kenny,
2013). However, Anheier (2005) argued that different definitions cater for different purposes
and they are neither true nor false, and should be judged by their usefulness in providing a
better understanding of the reality of NPOs. Anheier (2005) also argued that the UN
definition would gain acceptance over and above any other definitions for its international
nature and comparative advantage, whereas legal definitions make their relevance at the
national level, and serve as key elements in policy debates (Anheier, 2005). This has led to
the conclusion that NPOs are formal, self-governing, voluntary organisations involved in
helping individuals and communities to achieve their social, economic and cultural goals.
They are institutionally separate from government and commercial organisations and do not
distribute profits, but are accountable to their stakeholders.
The discussion so far in this chapter has focused on developing an understanding of the
concept of NPOs by looking at the different sectors in society, terminological issues
associated with NPOs, theoretical approaches to NPOs and definitional aspects of NPOs.
Based on this understanding, the next section looks at the management of NPOs.
2.6 Management
Despite the arguments around the purpose, nature, auspice and mechanisms for resource
mobilisation of the organisations, they all need to be managed to ensure effectiveness and
47
efficiency. In fact, “management capacity is the lifeblood of all organisations, irrespective of
whether they are private entities, public agencies, not for profit or non-governmental
varieties” (Udoh, 1998, p. 229).
Grint (1995, as cited in Lewis, 2014) characterised management as a mysterious concept, “as
the more research that is undertaken, the less we seem to be able to understand it” (p. 43).
Management is considered a subject or branch of knowledge, a profession, an objective, a
process and an apex body. The understanding of the concept of management is diverse and
elusive because knowledge development is informed by academic research and popular self-
help books and is characterised by ongoing tensions between practitioners and theorists
(Lewis, 2014). The practice approaches to management vary from highly “theoretical” to
“hands-on training” (Lewis, 2006b, p. 9), leading to various definitions and interpretations of
the meaning of management. However, many of the definitions are centred around the process
of management, which consists of planning, organising, leading and controlling that are
essential to achieving organisational goals (Anheier, 2005; Bartol, Tein, Matthews, &
Sharma, 2008; Campling et al., 2008; Daft, 2008; Griffin, 2012; Samson, Catley, Cathro, &
Daft, 2012). Renz (2010c) concluded that “management (whether in nonprofit or for-profit
organisations) is the process of planning, organising and leading the implementation of the
work of the organisation to accomplish its intended results” (p. 1,064). In general terms,
planning refers to determining goals and objectives and identifying strategies to achieve them
(Daft & Marcic, 2013; Griffin, 2012; Inkson & Kolb, 2002; Robbins & Barnwell, 2006;
Samson & Daft, 2012). Organising means to divide the work among staff based on the
structure and outlining policies and procedures. Leading means motivating and influencing
people in the organisation to perform their tasks so that the organisational goals are achieved.
Control refers to monitoring and evaluating the tasks undertaken and correcting them if
necessary. Renz (2010c) proposed that non-profit management comprises the work of all
48
these processes, and while all these processes overlap with one another, they all have a
discrete focus and involve a specific set of practices and activities, and each makes a unique
contribution to the success and effectiveness of the overall organisation. While the central
work of management is the same in all organisations, there is a strong call for acknowledging
the distinctive nature of non-profit management in the literature. The following discussion
establishes this distinctive nature of NPO management.
2.7 The Distinctive Nature of Non-Profit Management

While there is some agreement on the process and functions of organisational management,
the field of management studies has historically been concerned with commercial
organisations and public organisations and has not considered alternative organisational forms
such as NPOs (Anheier, 2014; Lewis, 2014; Rahman, 2007; Worth, 2014). Until the middle of
the 1970s, management was not a word many people used when talking about NPOs
(Drucker, 1990) and was considered a conflictual word in the NPO context, in which the
concepts of voluntarism, philanthropy and concern for the public good were more important
(Anheier, 2000). Management was seen to be part of the culture of commercial organisations
and was not felt to be suitable in the non-profit world (Hudson, 2009). As result, the NPO
management literature has been heavily influenced by ideas and concepts from business and
public management (Lewis, 2014). Management practices from the commercial world have
affected the NPO sector at regular intervals, such as management by objectives in the 1970s,
total quality management in the 1980s and results-based management in the 1990s (Smillie &
Hailey, 2011, as cited in Lewis, 2014). This has contributed concepts such as strategic
planning, audit, stakeholder analysis, organisational learning, marketing and social
entrepreneurship and brought consumer orientation into NPO management (Anheier, 2014;
Lewis, 2014). Similarly, public management has brought concepts and concerns such as
outcomes, efficiency, accountability, empowerment, capacity building, participation, equal

49
opportunities and performance management into NPO management and influenced
organisational structures and governance (Anheier, 2014; Lewis, 2014). These practices have
often come as requirements of a contract with funders who were influenced by changes in
commercial sector management. These influences of commercial and public sector
management practices have also prevented the development of generally accepted,
comprehensive management models for NPOs that are different from those of commercial
and public sector management (Anheier, 2005; Toepler & Anheier, 2004).
While the influence of business management and public management approaches on non-
profit management is undeniable, the relevance of these approaches to non-profit management
has been questioned. Alfirevic and Gabelica (2007) argued that the theoretical developments
in the management field demonstrate the need to consider the management of various
organisations differently. They reasoned that although the earlier theories of management
such as Fayol’s universal approach to management considered that the fundamental
characteristics of management were equally applicable to all organisational forms,
contemporary approaches such as contingency theory reject the universal approach to
management. Hudson (2009) argued that general management theories have limited value to
non-profits unless they can address the critical cultural and organisational features of NPOs.
While the business and public management models offer useful insights, they do not provide a
contextual and comprehensive approach to managing NPOs and do not adequately apply and
are not easily transferable to the non-profit organisational context (Anheier, 2014; Lewis,
2014; Rahman, 2007). The “existing theories developed for other sectors went so far, but not
far enough” (Billis & Harris, 1996, p. 6). Edwards and Fowler (2003) also cautioned that the
generalisation of management is hazardous because the issues and requirements of
management differ markedly between business organisations, state bureaucracies and NPOs.
Moreover, the difference in cultural settings and national contexts and the diversity within the
50
non-profit sector make the simple generalisation impossible and make non-profit management
a unique endeavour (Edwards & Fowler, 2003; John, 2004). The debate demonstrates that
there is a need and considerable support for building a contextual and comprehensive NPO
management approach that is different from that of business and public management
(Anheier, 2014; Billis & Harris, 1996; Lewis, 2014; Rahman, 2007; Worth, 2014).
There is a consensus in the literature that non-profit management is different from the
management of commercial and government organisations. Many researchers now agree that
NPOs need a distinct management approach because their vision, the nature of transactions,
coordination mechanisms, resource mobilisation and auspice are different from those of
business and government organisations (Brown & Korten, 1989; Daft, 2008; John, 2004;
Lewis, 2006b; Lussier, 2012). The differences in the fundamental purpose of management
between business organisations, government organisations and NPOs are also a contributing
factor to the distinction (Lussier, 2012). For a commercial organisation, the purpose is always
to generate a profit while the government organisation’s management purpose is meeting
government policies. In contrast, the purpose of management in NPOs is achieving social
objectives in line with their mission (Lussier, 2012). The organisations’ operating
environment, including political stability, resource availability and cultural norms within and
outside the organisation, is a crucial factor in determining the opportunities and constraints in
NPO management (Lewis, 2014). Salamon et al. (1999) eloquently explained the importance
of developing and maintaining a distinctive NPO management thinking:
[NPOs] need to be able to demonstrate the worth of what they do, and to operate both
efficiently and effectively in the public interest. This will require something more than
traditional management training, or the wholesale adoption of management techniques
imported from the business or government sector. Rather, continued effort must be
51
made to forge a distinctive mode of non-profit management training that takes account
of the unique values and ethos of this sector while ensuring the effectiveness of what it
does. (p. 37)
Adding to the distinctive nature of NPO management are the particular contexts in which
NPO management happens. Both internal and external contexts influence the management of
NPOs (Rahman, 2003; Roy, 2003). In particular, the legal context of NPOs is very significant
to their management because NPOs are legally distinct from other sectors. This legal
distinction limits the nature and scope of their work to social and charitable purposes while
they enjoy privileges such as tax-exempt status (Renz, 2010a). It is not possible to own an
NPO because there is no stockholding and it is generally perceived that NPOs are owned by
the community that they exist to serve (Renz, 2010a). Frumkin (2002) argued that they do not
coerce participation and exist without a simple and clear line of ownership. Although NPOs
deal with issues of public concern, such as poverty, social justice, exclusion, domestic
violence, children and young people’s issues, they have no statutory authority to act. They are
voluntary in nature and are entrusted with the responsibility of continually justifying their
presence and value in society (Edwards & Fowler, 2003). NPOs rely on their social
mobilisation skills and social capital to exert power and influence because they neither have a
political mandate from a government nor the financial capital as a business organisation.
NPOs often operate as an intermediary between the citizens or clients they serve and the
government or other philanthropic organisations that fund their services. This intermediary
nature means that they need to negotiate with multiple stakeholders to justify their existence
(Edwards & Fowler, 2003; Fowler, 2003). Non-profits are valued for the social value they add
to society and are constantly engaged in complex transactions with the governments, private
donors and communities they serve to create this value (Renz, 2010a). The multiple
52
stakeholder environment of NPOs creates diverse and inconsistent accountability and
performance expectations because “different stakeholder groups may have different
information needs, priorities for the organisation, visions of success and definitions of
legitimacy, including their boards of trustees, their donors (individual and institutional),
partners, staff and external critics” (Edwards & Fowler, 2003, p. 7). Renz (2010a) supports
this dilemma by arguing:
One of the most challenging tasks of non-profit management is to select a course of
action that strikes a reasonable balance among the different expectations and demands
of the organisations’ multiple stakeholders. This requires that management be
especially politically sophisticated and sensitive to the external environment. (p. 801)
From the NPOs’ perspective, the government is often a controlling authority as well as a
competitor in delivering social services. In the capacity of controlling authority, the
government regulates the NPOs to have control over the sector as a whole. In addition to
regulation, government funding policies are the most direct form of relationship between the
government and NPOs (Toepler, 2010). The relationship between the government and NPOs
can be seen in both positive and negative lights. On the positive side, it is argued that
government support helps NPOs to gain their current position of prominence. On the negative
side, government support adversely affects the culture, structure and behaviour of NPOs
(Toepler, 2010). In addition to the direct support governments offer as grants and contracts,
the indirect benefits such as tax exemptions also demand greater accountability from non-
profits. Governments frequently provide similar social services to NPOs and, in this sense,
may compete with the sector. NPOs tend to work with the most vulnerable people who are
marginalised economically, politically and culturally. Working with this structural
marginalisation often leads to distrust of NPOs because they are “allies of the poor and often
53
invite suspicion and control” (Edwards & Fowler, 2003, p. 4). NPOs frequently face uncertain
and volatile regulatory environments in many countries in the event of a change of
government, and this environment has a profound impact on how they are being managed
(Lewis, 2006b).
The revenue generation in all three organisations demands different approaches in
management because NPOs generate much of their income through donations, contracts and
grants, commercial organisations generate revenue through sales and government
organisations generate revenues through taxes and fees (Anheier, 2014; Renz, 2010a). In
business organisations, managers direct activities towards increasing sales revenue and
earning money for the company, whereas in NPOs, managers direct efforts towards
generating some social impact (Lewis, 2006b). In NPOs, services are typically provided to
non-paying clients and are supported by grants and contracts from government, public and
commercial sectors (Lewis, 2006b). There is often no clear link between the funding
providers and users of the service (Hudson, 2009). This funder aspect of NPOs constitutes a
particular environment that is unique in the sense that no other sector depends heavily on
public, government and corporates for funding. NPOs may be affected by the funder’s
priorities, by the funder’s vision and mission and by the documentation demands of funders,
resulting in mission drift and compromising organisational values (Edwards & Fowler, 2003;
Stansfield, 2001). Also, government’s regulatory frameworks mean that there are often
significant targets to meet within a procedural and accountability framework (Edwards &
Fowler, 2003; Renz, 2010a; Salamon, 2010). Funders often see duplicative effort among the
NPO sector in providing services and often encourage them to collaborate even if NPOs are
reluctant to engage in collaboration themselves (Irvin, 2010). However, competition remains
among NPOs, and NPOs compete with for-profit organisations if they produce and offer
similar services (Irvin, 2010). Competition exists for clients when revenue is generated from
54
prices, and if the price cannot be charged for services, competition remains for donations,
grants and contracts. This is essentially a reality for NPOs engaged in both advocacy work
and service provision, and this fierce competition for dwindling resources will frequently
demand using specialist services from fundraising professionals (Irvin, 2010). The
competition also exists for non-financial resources such as paid staff and volunteers and
media coverage. As a result, NPOs must focus on keeping organisational costs as low as
possible while preserving quality (Edwards & Fowler, 2003; Letts, Ryan, & Grossman, 1999).
This balancing act often forces them to induce “a creeping sense of self-censorship” (Edwards
& Fowler, 2003, p. 8). The complex and inconsistent context of clients and markets for
resource generation results in securing a steady stream of funds and makes the management
context distinctive (Renz, 2010a).
The management of human resources is another point of difference because paid employees
and volunteers often run NPOs, whereas public organisations and commercial organisations
use only paid employees to manage their affairs. NPO managers often depend upon
volunteers who cannot be supervised and controlled in the same way as a business manager
deals with employees (Renz, 2010a). NPOs cannot use hierarchy and coercion or material
incentives to make the staff and volunteers compliant to meeting organisational goals because
they are democratic and membership is not mandatory (Anheier, 2014; Edwards & Fowler,
2003). NPOs are value-laden organisations, and staff and volunteers often join the
organisation based on a shared ideology, a sense of increase in public status by being on a
board and a belief in the outcome of meaningful contribution to the organisational mission
(Lewis, 2006b, 2014). As a result, responding to personal values and self-motivation is key to
compliance (Edwards & Fowler, 2003). Being value-laden organisations striving for social
justice and change, NPOs need to pay attention to diversity, gender equity and other issues of
difference (Anheier, 2014; Worth, 2014). As intermediary organisations, NPO’s external

55
relationships should be characterised by their values to maintain their legitimacy and identity.
Managers in NPOs have fewer levers for influence than their counterparts in for-profit
organisations and government organisations (Edwards & Fowler, 2003). In NPOs, the
manager has multiple roles: as a spokesperson to sell the organisation to clients, donors,
volunteers and staff; as a leader and a value creator to build a mission-driven organisation
with employees; and as a resource allocator in adherence to the identity and rootedness of the
organisation (Samson et al., 2012).
NPOs often struggle with the question of what constitutes results and effectiveness. NPOs do
not have conventional bottom line measures such as profit and return on investment, and this
makes the management of performance a daunting task among NPOs (Cordes & Coventry,
2010). John (2004) supports this position by arguing that in commercial organisations, the
objective of maximising profit is a uniform performance indicator for success. In NPOs, the
successful practices are not uniform as they deliver various human services. For the
government, electoral success is often identified as a bottom line, and NPOs do not have
anything similar (Edwards & Fowler, 2003). As a result, the performance indicator for NPOs
is their mission achievement, and NPOs are less interested in financial performance criteria
(Lussier, 2012). However, the efficiency and effectiveness of this mission achievement cannot
be assessed as easily as in commercial organisations because they are expected to generate
goodwill, friendship and an enhanced sense of community (Renz, 2010a). Moreover, metrics
of success are often ambiguous in NPO management because there is a need to measure
intangibles such as making a difference in the lives of disenfranchised people in the
community and promoting social and economic justice and change. This value-based nature
of NPOs complicates the nature of goals, incentives and management structures. The values
nature raises the question of whether NPOs actually practise such values as participation,
inclusion, anti-discrimination and empowerment in their management process (Edwards &

56
Fowler, 2003). Also, the diversity in the social construction of the idea of social change and
the intangible nature of the means and outcomes make it harder to gauge the performance of
employees and managers in the NPO sector (Renz, 2010a). It is not easy to convert the ideas
of social change into monetary terms and the considerable staff time and effort required to do
so is often not feasible with the limited resources available in NPOs (Cordes & Coventry,
2010).
It can be concluded from this discussion that the test of quality management is more
straightforward for the business organisation since its goals are clearly defined, that is,
maximising profit. The management of government organisations involves governing the
affairs of the state, in which public servants have clear accountabilities directly influenced by
changing socio-political conditions. In contrast, the management of NPOs is invariably
conditioned by different factors, such as charismatic leadership, participation, satisfaction of
members, maintenance of internal democracy, relationship with the state and other factors as
outlined above. What this means is that, in line with the sectoral organisational differentiation
of public sector, private sector and non-profit sector, management needs to be viewed as three
separate fields, namely, public management, business management and non-profit
management.
2.8 A Comprehensive View of Non-Profit Organisation Management

Despite the understanding of and agreement on the distinctive nature of NPO management
and the need for developing a comprehensive NPO management approach, the existing
literature does not provide a clear and concise picture of what NPO management entails.
Anheier (2000) argued that “the management of non-profit organisations is often ill-
understood because we do not understand these organisations well, and it is frequently ill-
conceived because we operate from the wrong assumptions about how non-profit
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organizations function” (p. 2). One of the difficulties in developing a comprehensive approach
to NPO management has been the diverse nature of the subject matter of NPO management,
which precludes it from fitting precisely into the standard social science disciplines. The NPO
management literature contains contributions from economists (the most numerous group),
historians, management and organisational theorists, political scientists and sociologists,
resulting in the emergence of a fundamentally interdisciplinary field of NPO management
(Anheier, 2014). Although the initial theoretical interest in the 1980s came primarily from
economics and other social sciences, intellectual bridges were quickly made (Anheier, 2014).
However, none of these disciplines’ contributions has resolved all the issues associated with
NPO management (Helmig, Jegers, & Lapsley, 2004). The interdisciplinary nature of NPO
research probably prevented the development of a unified body of literature on NPO
management.
The nature of research within the NPO sector has also contributed to this state. The NPO
sector witnessed an enormous growth of research and publications from the 1990s onwards
(Worth, 2014), and current research on NPO management can be found in dedicated journals
such as Third Sector Review, The Philanthropist, The China Nonprofit Review, The
International Journal of Not-for-Profit Law, Journal of Civil Society, The Nonprofit and
Voluntary Sector Quarterly (NVSQ), Voluntas, Nonprofit Policy Forum, Voluntary Sector
Review, Nonprofit Management and Leadership and International Journal of Nonprofit and
Public Sector Marketing. A large section of this work has depicted a positive analysis of the
work NPOs are doing and was mainly written by people directly involved with, or very
sympathetic to, NPO work (Lewis, 2006a, 2006b, 2014). Lewis (2006b) also observed, “even
though many of these works are high quality and served to emphasise the new importance of
NPO work, in retrospect, it had some important limitations in other respects” (p. 9). The
literature focuses on the descriptive rather than the diagnostic and tends to centre on
58
individual, organisational cases rather than the broader picture (Lewis, 2014). It is imperative
to note that very little of this literature is concerned with the nature and systems of
management of NPOs. The majority of the academic literature focuses on what NPOs do
rather than how NPOs work as organisations (Lewis, 2014). Helmig et al. (2004) argued that
the internal functioning of NPOs has received less research attention than the nature of the
sector. The main focus is on the different roles played by NPOs in the welfare context and
service delivery process and the prospective nature of NPOs to challenge existing policy and
practice (Lewis, 2014). However, relatively little attention has been given to the various ways
in which these particular roles can be managed. The research on how NPOs work as
organisations is currently underdeveloped and overly normative (Lewis, 2014). The literature
on NPO management is often dominated by research undertaken by contract researchers or
consultants who are funded by NPOs or their funders, resulting in positive findings and “a
prescriptive, how to do it approach” (Worth, 2014, p. 10) rather than reflection and critical
lessons (Lewis, 2014).
Lewis (2014) also argued that the lack of interest in management among NPOs has
contributed to the failure to develop comprehensive management approaches and models.
Lewis (2014) argued that NPOs are sometimes resistant to giving access to outside
researchers, for reasons to do with prioritisation of their work and impatience with purely
“academic” research aims, and their vulnerability as organisations to unfavourable publicity.
NPOs are also reluctant to open themselves up to scrutiny when their positions may be fragile
in relation to funding and reputation. Also, NPOs are hesitant to spend a substantial amount of
time reflecting on organisational questions or purpose because such focus may hinder the
primary task of “getting out there and doing something” (Lewis, 2006b, p. 20). People
establish NPOs as an alternative to government and business sectors, and they view
management as “a tainted ground with its strong associations with public and business
59
organisations” (Lewis, 2014, p. 36). NPOs’ reluctance to engage with new stakeholders due to
responsibilities of efficiency, effectiveness and new systems of accountability associated with
new relations has also contributed to this lack of attention to management. Lewis (2014) also
inferred that the diversity within the NPO sector makes it difficult to develop any general
insights into the management of NPOs. Toepler and Anheier (2004) agreed with this view,
arguing that the diversity within the NPO sector regarding size and operational areas and the
newness of management need has deterred the development of a coherent non-profit
management science. Also, Anheier (2000) saw that the management of NPOs often meant
financial management in the context of uncertainty around funding, and this emphasis on
financial management based on business organisations’ standards diminishes the importance
of other aspects of management, such as service to the public and management of purpose and
mission among NPOs. Despite the challenges in developing a comprehensive approach to
NPO management, recent research provides some insights into what is involved in NPO
management.
Although NPO management is relatively young as an academic field of study and as a
profession (Worth, 2014), many prominent researchers (Anheier, 2014; Lewis, 2014; Worth,
2014) have recommended that effective NPO management use a balanced and integrated
approach that draws on diverse perspectives. They have also argued that effective NPO
management requires a holistic conception of NPO management, as NPOs are organisations
with multiple components and bottom lines. Gomez and Zimmerman (1993, as cited in
Anheier, 2014) proposed that the holistic conception should highlight the relationship
between the organisation and its environment because NPOs exist in highly complex
environments, interacting with other for-profit organisations and public organisations to
deliver services. Lewis (2014) argued that to understand their management, NPOs must be
placed against their task environment consisted of political, historical, geographical and
60
cultural dimensions of NPOs. According to Lewis (2014), to understand the internal
functioning of NPOs, it is necessary to analyse them in the given environmental context, as
the environment is becoming an increasingly difficult one in terms of resource availability
and government control. Rahman (2003, 2007) conceptualised this environment as an outer
layer involving the politico-legal, sociocultural, economic and technological dimensions
within which NPOs operate. Anheier (2014) argued that NPOs approach their environment as
either an outer-directed organisation or an inner-directed organisation. As outer-directed
organisations, they look primarily at other organisations, react to environmental stimuli and
take models and solutions from them. Such organisations adapt to environmental changes and
seek to control outside influences. By contrast, inner-directed organisations emphasise a
particular view of the environment and focus on their objectives and world view. The internal
organisation rather than the external environment becomes the source of solutions and
strategies (Anheier, 2014). However, Lewis (2006b, 2014) deduced that the environmental
context is different in each country due to the sociological, political, economic and cultural
nature of the very environment and has the potential to limit the scope of generalisation and to
apply the management lessons learned in one country to another (Lewis, 2006b, 2014).
Nevertheless, maintaining the boundary between the organisation and its environment may be
one of the main keys to working effectively (Lewis, 2006b, 2014).
To navigate through this complex task environment, researchers have also agreed that NPOs
are required to deal with the everyday functioning of the organisation as part of management
(Anheier, 2005; Lewis, 2014; Rahman, 2007). Known as an operative dimension (Gomez &
Zimmerman, 1993, as cited in Anheier, 2005), this internal environment of NPOs has been the
focus of conventional NPO management (Anheier, 2005). A review of selected books on non-
profit management revealed that the internal environment is multidimensional and mainly
includes governance, human resources, service delivery, finance, relationships, information

61
technology, strategies and marketing, among others (Ahmed, 2013; Anheier, 2014; Hudson,
2009; Lewis, 2014; Renz, 2010d; Worth, 2014). Similarly, a review of selected non-profit
organisational assessment tools in the practice literature identified similar dimensions of NPO
management, such as governance, service delivery, finance, human resources, relationships
and strategies (Freeman & Thompson, 2005a; Levinger & Bloom, n.d.; McNamara, n.d.;
Ministry of Social Development [MSD], 2013b; Minnesota Council of Nonprofits, 2005;
Mueller, Rickman, & Wichman-Tau, 2006; NZ Navigator, 2014). The congruence between
academic literature and practice literature demonstrates that the theory and practice of NPO
management are very much intertwined. Accordingly, a holistic conception of NPO
management should integrate the multidimensionality of the internal environment. Based on
this discussion, it can be concluded that a comprehensive view on NPO management involves
two critical aspects: the external environment in which the NPOs operate and the internal
environment, which includes organisational elements such as the board, human resources,
financial resources and service delivery. It appears that a systems thinking conceptual
framework considers these two dimensions and offers a useful framework to understand the
complexities of non-profit management. The next section discusses this conceptual
framework.
2.9 Conceptual Framework

To develop an understanding of the management of NPOs, it is vital to use a conceptual
framework to guide the research enquiry. Perrow (1970, as cited in Jones & May, 1992)
pertinently elucidated the importance of using a conceptual framework in understanding
organisations:
No matter what you have to do with an organisation—whether you are going to study
it, work in it, consult for it, subvert it, or use it in the interests of another
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organisation—you must have some view of the nature of the beast with which you are
dealing. This constitutes a perspective on organisations. (p. 32)
In formulating a conceptual framework for studying the management of NPSSOs, an enquiry
informed by systems thinking provides a useful prototype. The system perspective was
mainly developed by Ludwig von Bertalanffy, who perceived systems as living organisms in
which “the whole is more than the sum of parts” (Bertalanffy, 1968, p. 55). He also argued
that system approaches were more appropriate than causal models for dealing with complex
interactions in all types of systems—biological, mechanical and social (Bertalanffy, 1968, pp.
11–12). Systems thinking in organisational studies emerged in the 1950s and 1960s,
influenced by the then dominant structural functionalism and general systems theory.
Accordingly, systems theory reintroduced a sociological focus to organisations (Jones & May,
1992). Systems thinking has multidisciplinary application and has influenced disciplines such
as engineering, biology, psychology, sociology, management and social work (Teater, 2014).
The application of systems thinking to social work is of particular relevance to this research
because the research is undertaken in the discipline of social work.9 Systems thinking has a
significant place in social work because it offers a framework for social work practice and
ways of managing the organisation (Coulshed et al., 2006). Systems thinking has been a
foundation for social work practice and arguably the most popular conceptual framework for
social workers (Connolly & Healy, 2009; Healy, 2005). In fact, Connolly and Healy (2009)
argued that “if we were to bring together a group of social workers and asked them what
theories underpin their practice, it is likely that systems theory would strike a universal chord”
(p. 20). Webster, McNabb, and Darroch (2015) argued that in social work, “management
9The thesis is undertaken to fulfil the requirements for the Degree of Doctor of Philosophy in Social Work. The researcher is
a qualified and registered social worker in Aotearoa New Zealand and also is a full member of the Aotearoa New Zealand
Association of Social Workers (ANZASW).
63
needs to be explored from the perspective of the profession’s classic ecological or systems
framework” (p. 44).
The literature has revealed that a comprehensive approach to NPO management should
consider the internal functioning elements of NPOs, such as service delivery, the board,
human resources and finance, within a task environment in which NPOs operate to fulfil their
vision and mission. In general, systems thinking views organisations as open systems that
interact with their environment (Coulshed et al., 2006; Jones & May, 1992; Robbins &
Barnwell, 2006), representing the comprehensive approach to NPO management. Systems
thinking offers a holistic view of the organisation, and rather than offering any particular
organisational design, systems thinking focuses on any existing structure in organisations and
the processes that happen within the structure (Coulshed et al., 2006). Systems thinking is
also a widely accepted perspective in the organisational management literature (Campling et
al., 2008; Griffin, 2012; Lussier, 2012; Robbins & Barnwell, 2006; Samson & Daft, 2012).
Anheier (2014) argued that viewing NPOs as systems with various components is key to NPO
management and embodies “a possible analytical framework to understand the various
dimensions, dilemmas and structures involved in non-profit management” (p. 330).
In the application of systems thinking to this study of the management of NPSSOs, the
following propositions of systems thinking were applied within the context of non-profit
management and the confinement of research questions. There is a considerable agreement on
these systems thinking general propositions in the organisational management literature
(Campling et al., 2008; Griffin, 2012; Inkson & Kolb, 2002; Lussier, 2012; Robbins &
Barnwell, 2006; Samson & Daft, 2012) and social work literature (Connolly & Harms, 2012;
Coulshed et al., 2006; Gardner, 2006; Healy, 2014; Jones & May, 1992; Payne, 2014; Teater,
64
2014). Based on this agreement in the literature, two propositions from systems thinking were
used to guide this research enquiry on the management of NPSSOs:
 Organisations (NPOs) are open systems composed of interdependent subsystems (the
board, service delivery, human resources and finance) and, in turn, a part of a
supersystem (broader social service/welfare system). In other words, a whole (NPO)
cannot be complete without the participation and presence of each of the parts (the
board, service delivery, human resources and finance), which affect at least some other
parts. Accordingly, within the context of this enquiry, a systems view on the
management of NPOs includes looking at the relationship between the internal
organisational elements of the board, service delivery, human resources and finance.
 A system is affected by other systems in the supersystem, either directly or indirectly,
as they interact with each other. In the NPO management context, NPOs should
consider the influence of other systems on their management such as government and
other funders or other NPOs that compete for resources and service users. For
example, a policy shift brought by a change in government may end the funding for
the NPO and could limit the services that are offered to the clients. This could
potentially affect the organisation’s growth and survival. Also, changes in the legal
context such as regulation and licensing affect NPOs immensely. This supersystem
contributes to the task environment of organisations, and within this view, NPO
management is always affected by what is happening outside the organisation in their
task environments. Consequently, within the context of this enquiry, a view on the
management of NPOs should consider how the NPOs interact with the other
organisational systems, such as government organisations, funding bodies and other
NPOs, in addition to considering the relationship between internal organisational
elements.
65
Based on these two critical propositions of systems thinking, the following statement
represents the underlying logic for designing and conducting this study. NPOs are open
systems consisting of interdependent internal parts, such as the board, service delivery, human
resources and finance. NPOs constantly interact with their external environment, consisting of
the government, for-profit and other NPOs, either directly or indirectly. In the context of this
study, management of NPOs means investigating the management of the internal
organisational elements—the board, service delivery, human resources and finance—and
examining the relationships between the management of the board, service delivery, human
resources, and finance within their specific operating environment.
As this study examines the management of NPOs in only four key areas—the board, service
delivery, human resources and finance—the following section discusses the literature on these
four areas of non-profit management to build an understanding of the management of these
areas.
2.9.1 Board Management

It is essential to develop a conceptual clarity about governance and management before
looking at the management of the board. Many argue that governance is different from
management and they are two separate functions (Anheier, 2005; Herman & Renz, 1999;
Hudson, 2009). This view could be an appropriate one if we consider management as an apex
body or a group of people in an organisation consisting of a CEO and senior managers, who
plan and make decisions (Thomson & Ali, 1989). However, this can be misleading and
problematic, and can potentially limit the scope of the concept of management if we consider
management a process involving planning, organising, leading and controlling, which
happens in different domains of management, such as the board, service delivery, finance and
human resources. In fact, if we consider management a process rather than an apex body, then
what is considered management should be considered operations undertaken by an executive

66
team headed by the CEO. Renz (2010b) argued that operations are different from
management in that operations comprise actually doing the work, such as service delivery,
and management is about making sure work gets done. This essentially means governance is
the function of the board and operations is the function of the executive, and both of these
functions need to be managed. Anheier (2014) argued that thinking of the board as the focal
point of governance and the CEO as the focal point of operations makes this distinction clear.
Sometimes the governance and operations overlap, but they need to be separated as much as
possible so that both can be managed properly.10 The board is responsible for governance, but
the process is managed with the support of the executive director and other staff working in
the organisation (Hudson, 2009).
In many countries, boards are a legal requirement for NPOs’ existence. In NPOs, boards are
considered the focal point of governance and thus provide strategic leadership to the NPOs
(Ahmed, 2013; Anheier, 2014; Hudson, 2009; Renz, 2010b). According to Renz (2010b),
“governance is an organizational function, whereas a board is a structure of the organisation
that exists to govern—to perform the work of governance” (p. 126). For Anheier (2014),
governance is “primarily an organisational steering function and closely related to the notion
of stewardship” (p. 413). For Hudson (2009), governance of NPOs is:
About ensuring that the organisation has a clear mission and strategy, but not
necessarily about developing it. It is about ensuring that stakeholders’ views are heard
but not about managing all communication with different stakeholder groups. It is
about ensuring organisations’ economic viability but not about raising all the required
resources. It is about giving guidance on the overall allocation of resources, but is less
10This research does not view management as an apex body or a group of people dealing with the operations, which is
different from the governing body; instead, it views management as an overarching process with elements of planning,
organising, leading and controlling. Accordingly, this research views governance as a distinct domain of NPO management
that thus needs to be managed.
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concerned with the precise numbers … It is about ensuring that organisations are well
managed, but not about managing them. (p. 53)
Governance is always the responsibility of the governing board, and they are the ultimate
authority and decide the organisation’s mission, values, goals and strategies (Berger, 2010;
Hudson, 2009; Renz, 2010b). Boards set the direction, make decisions about policy and
strategy, oversee the organisational performance and ensure organisational accountability to
the community, the funders, the state and the clients (Renz, 2010b). Boards are supposed to
focus on general, broad and core policies, rather than on operating decisions of lesser
significance to the entire organisation (Berger, 2010, p. 69). The skills of the board members
and their ability to appoint a competent CEO have a significant influence on organisational
governance (Hudson, 2009). The primary function of the board is to ensure that the
organisation carries out its mission and governance making sure that the organisational
activities match its stated mission (Anheier, 2014). In doing this, the boards lead and set
strategies, establish policies, secure and ensure the efficient use of resources, manage the
CEO’s performance, engage with multiple stakeholders, ensure accountability and ensure
board effectiveness (Ahmed, 2013; Renz, 2010b). Boards also have a boundary-spanning role
in which they link the organisation with the external environment by representing the
organisation to the outside world and by bringing perspectives from the outside world to the
organisation (Ahmed, 2013; Harris, 1996). Hudson (2009) pointed out that boards should
have a clear idea about their roles and the boundaries on those roles. As boards have many
functions to perform, the recruitment, selection and development of board members are of
paramount importance. Herman and Renz (2008) argued that there is a correlation between
organisational effectiveness and board effectiveness. Renz (2010b) added that NPOs’ success
depends on effective boards that are teams. Because of this, boards have to ensure that they
are well managed.

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For the board, governance is a demanding function to perform, involving complex tasks, and
effective management is required to obtain the greatest value from governance (Hudson,
2009). According to Hudson (2009), the management of boards starts with “finding,
appointing and inducting the board members who, between them, have a wide range of skills
and the necessary level of governance experience to meet the organisation’s expectations” (p.
73). In this process of management, boards need to ensure diversity of members regarding
gender, age, ethnicity, disability, sexual orientation and service user experience. The other
aspects of board management include training, board meetings, strategic planning and CEO
performance evaluation, maintaining a relationship with various stakeholders, board
development and board evaluations. One of the major responsibilities of boards is to ensure
that NPOs have clear strategies to give a sense of direction (Hudson, 2009). The strategy is “a
pattern of purposes, policies, programmes, actions, decisions, or resource allocations that
define what an organisation is, what it does and why it does it” (Bryson, 2010, p. 245). Many
agree that developing the strategies from a board management perspective involves clarifying
organisational vision, mission, values and objectives by examining the organisation’s internal
and external environments in the context of change (Anheier, 2005; Bryson, 2010; Hudson,
2009). This then leads to identifying the strategic issues, formulating plans to manage the
issues and identifying resources (Anheier, 2005; Bryson, 2010; Hudson, 2009). Based on the
strategies devised, the executive (staff) is then charged with the delivery of services to achieve
the organisational mission.
2.9.2 Service Delivery

Service delivery is considered the most visible role NPOs play in society (Lewis, 2006b).
NPOs are often the primary providers of services that the government and businesses are
either unwilling or unable to provide (Anheier, 2005). NPOs also complement or supplement
the service delivery. As NPOs are mission-based organisations, they need to ensure that their
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services fit with their mission and flows from strategic plans (Hudson, 2009). While NPOs
engage in service delivery to meet the unmet needs of the community at their will, they also
enter into contracts with the government these days to deliver services, making them
accountable to government. Because of the competition among NPOs to deliver services due
to the current competitive tendering and purchaser-provider contracting model, it is
imperative that the service delivery is managed very well (Hudson, 2009). Organisations need
operational plans that reflect organisational strategies to deliver services. This involves
negotiating resources, responsibilities and time-scales (Hudson, 2009). As the service user’s
needs are often multifaceted and NPOs need to deliver services in an integrated way, NPOs
need to clearly define the services and prepare strategies for achieving them (Hudson, 2009).
This requires developing and maintaining a deep understanding of the service users’ needs
and requires research.
Despite the importance of service delivery in NPOs, the literature does not offer any coherent
view on what service delivery management entails. For instance, despite addressing the other
critical dimensions of non-profit management, such as finance, governance and human
resources, the books on non-profit management (Ahmed, 2013; Anheier, 2014; Renz, 2010d)
do not address the domain of service delivery management. According to Hudson (2009),
service delivery management involves a number of key processes, including:
 reviewing current service provision
 establishing new objectives and performance measures for the service
 developing strategies for achieving the objectives
 identifying the benefits of services to the user
 determining how the services will be financed
 forecasting income and expenditure and timetable

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 identifying quality standards, performance and outcome measures and risks and
mitigating factors.
While there is some literature on aspects of these service delivery management processes,
such as outcome assessment and programme evaluation (Thomas, 2010), the literature
underemphasises service delivery management while overemphasising the other dimensions
of non-profit management such as board, human resources and finance.
2.9.3 Human Resource Management

Anheier (2014) argued that NPOs are labour intensive rather than capital intensive (p. 396).
While NPOs’ primary purpose is ensuring the achievement of their mission, their ability to
achieve the mission depends on the skills of their people and the NPOs’ engagement with
them (Hudson, 2009; Watson & Abzug, 2010). The approach to human resource management
in NPOs should be value driven because the organisations are value driven (Watson & Abzug,
2010). As NPOs usually offer jobs with limited opportunities for advancement and compete
with commercial and government organisations for staff, non-profit employment needs to be
carefully managed (Anheier, 2014). Human resource management in NPOs includes activities
related to human resource planning, hiring, training, promotion, performance evaluation,
retention, and support of staff and volunteers (Ahmed, 2013; Anheier, 2014).
Volunteer management is an essential aspect of human resource management, which needs a
different treatment from staff management because the wage incentive is missing (Anheier,
2014). Volunteer management focuses on service volunteers who contribute to the service
delivery rather than policy volunteers who serve on non-profit boards (Brudney, 2010). NPOs
need to consider why they need volunteers and what assignments they can offer to volunteers
before jumping into recruiting volunteers (Ahmed, 2013; Brudney, 2010). Without proper
purpose and well-designed job descriptions, recruiting volunteers is counterproductive.

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Matching volunteer interests and talents to organisational needs is an important management
task (Brudney, 2010). NPOs need to be realistic about how much volunteers can contribute
and how much control they have over them (Ahmed, 2013; Brudney, 2010). Managing and
training volunteers is a way of attracting and retaining them. Volunteer motivation is non-
monetary and cannot be managed along incentive lines, but more on the grounds of
commitment to cause (Brudney, 2010). As staff management and volunteer management need
different treatments, NPOs need a management system that specifically focuses on the
recruitment, development and retention of volunteers (Brudney, 2010). This requires detailing
the tasks and responsibilities associated with the respective volunteer position and inviting
potential new volunteers to complete an application listing skills, experience and motivation.
It also includes strategic planning focusing on volunteer services to determine the supply and
demand for volunteers in particular organisational activity areas, outlining and assessing
future training and development needs, and to assess potential liabilities in terms of training
costs, allocation of resources and legal liabilities. Volunteer retention depends on the tasks
they are given and the training they receive (Brudney, 2010). Although volunteering is
intrinsic, they are also open to extrinsic rewards such as formal recognition of their
contribution to organisational performance (Ahmed, 2013; Anheier, 2014). It is thus
imperative to outline the scope of volunteer activities and evaluate their contributions.
However, there is no one best way to manage volunteers, and management practices need to
be based on a thorough understanding of not only the organisation’s but also the volunteers’
goals (Brudney, 2010).
2.9.4 Financial Management

While NPOs exist to pursue their mission and not to raise money (Renz, 2010b), they have to
secure adequate financial resources to achieve their goals and mission (Ahmed, 2013).
Kandasami (1997) argued that for mission-driven organisations such as NPOs, money is
72
merely a means, and not an end in itself, and NPOs need to put their mission before money.
Although NPOs use their financial resources to further their mission, in contrast to profit
organisations, which use them to increase revenue, NPOs are expected to manage their
finances like any other organisation (Ahmed, 2013; Kandasami, 1997). However, NPOs’
financial resource acquisition process is distinct from that of other organisations (Ahmed,
2013; Anheier, 2014). While commercial organisations rely on earned income from sales of
services or goods, government organisations are funded through taxation and receive their
income from the government budget. In contrast, NPOs’ income structure includes different
sources such as individual donations, philanthropic foundations, and government grants and
contracts (Ahmed, 2013; Anheier, 2014). This multiple funding streams and resource
acquisition process is a challenging process for NPOs because it relates to the issue of trust in
NPOs (Ahmed, 2013). NPOs receive their funds from the various sources to meet the
expectation to deliver services that offer public benefits (Ahmed, 2013). Lewis (2015) argued
that funds are given to help service users, not NPOs. As a result, effective financial
management aids NPOs to gain funder trust and public confidence while helping to avoid
fraud and unethical financial practices (Ahmed, 2013). As a management tool, financial
management helps to demonstrate the organisation’s accountability by reporting to fiscal
authorities, funders and the general public, and NPOs need to have a system to keep track of
their financial aspects (Anheier, 2014). Moreover, financial management assists with planning
and decision making in NPOs for performance monitoring and everyday operations (Anheier,
2014).
Despite the understanding of the importance of effective financial management in NPOs, the
literature does not provide a coherent overview of what this entails. Because of the issues of
survival, fundraising is often overemphasised in the literature as the heart of non-profit
financial management while the other aspects of financial management are underemphasised
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(Renz, 2010c). Similarly, both Kandasami (1997) and Lewis (2015) argued that accounting is
overemphasised in discussions about financial management. Young (2010) even considered
accounting a separate function from financial management. Despite this, both Kandasami
(1997) and Lewis (2015) offered a holistic view of financial management. Kandasami (1997)
conceptualised financial management as a system with several components: planning and
budgeting, accounting, reporting and monitoring, financial control systems, audit and
compliance of laws and rules and regulations. For Lewis (2015), financial management entails
“planning, organizing, controlling and monitoring the financial resources of an organisation to
achieve objectives” (p. 4). Others describe aspects of this process as financial management.
For instance, Anheier (2014) identified four components of financial management: balance
sheet, income and expenses statement, cash flow and budget. Ahmed (2013) identified
fundraising, accounting and financial reporting as aspects of financial management. While
each of the components is important in itself, it is more important that they function as a well-
integrated single financial management system to realise the mission of the organisation
effectively and build public and funder trust (Kandasami, 1997).
2.10 Operational Definitions of Key Terms

The principal focus of the study is the management of the board, service delivery, human
resources and finance in the NPSSOs in Aotearoa New Zealand. Based on the literature
review on non-profit management, the key terms are operationalised as below:
 Non-profit social service organisations—Legally valid NGOs whose primary
purpose is delivering social services in the communities. In this study, these
organisations are registered charities under the Charities Act 2005.
 Māori non-profit organisations—NPOs that offer services exclusively to Māori or
organisations that operate from a kaupapa Māori philosophy, but provide services to
74
everyone. They can be either iwi-based organisations or pan-Māori organisations
whose primary activity is social service delivery.
 Non-Māori non-profit organisations—NPOs that offer social services to any
population group, including Māori.
 Management—The process of planning, organising, leading and controlling the
various organisational elements that are essential to achieving the purposes of the
organisation.
 Board—A structure with a group of people who are appointed under the constitution
of organisations to carry out the organisational function of governance responsibly.
NPOs need to plan, organise, lead and control the functioning of the board.
 Service delivery—The activities, services and programmes offered by NPOs to
support the people in the community, which are the primary purpose of NPOs. NPOs
often deliver services under contract with the government or offer services that are
independent of government involvement. NPOs need to plan, organise, lead and
control the services they are delivering.
 Human resources—Refers to the paid employees and volunteers who contribute to
organisational activities and are involved in delivering the services. The management
of human resources includes planning, hiring, training, evaluating, supporting and
retaining the paid staff and volunteers.
 Finance—Refers to the monetary resources NPOs need to run their services. NPOs
often receive them by delivering contracted services for government. NPOs also
receive financial resources from philanthropic sources and individual donations.
Finance management involves planning and budgeting, fundraising, accounting,

75
reporting and monitoring, financial controls, audit and ensuring compliance with
laws.

The purpose of this chapter was to develop a conceptual understanding of non-profit
management. From the literature reviewed, it was concluded that NPOs are organisational
entities that are different from business and public sector organisations because of their
purpose, nature, auspice and mechanisms for resource mobilisation. As NPOs are distinct
from government and business organisations, their management is also different from those
organisations. NPO management is a unique field and activity because the operating
contextual factors, such as legal, accountability, resource, staffing and measurement of
success, are different from those of business and public organisations. The complex task
environment of NPOs makes their management a multidimensional phenomenon covering
interrelated domains such as the board, service delivery, human resources and finance. This
dynamics of internal and external environments calls for a comprehensive approach to NPO
management. As NPOs always interact with their complex task environments and are subject
to contingencies all the time, they should be viewed as open systems, and their management
can be understood by employing systems thinking. The systems thinking conceptual
framework was presented in this chapter as a guiding framework for the study. The systems
thinking framework argues that NPOs’ management should be considered within their task
context. The task context of NPOs in Aotearoa New Zealand is heavily influenced by the
historical development of the non-profit sector. The next chapter, The Non-Profit Sector in
Aotearoa New Zealand, presents a historical overview of the non-profit sector in Aotearoa
New Zealand to understand the historical forces that shaped the sector and their role in the
current challenges faced by NPOs. This chapter also discusses the current significant
operational challenges faced by NPOs.

76
CHAPTER 3: THE NON-PROFIT SECTOR IN AOTEAROA

NEW ZEALAND

how NPSSOs in Aotearoa New Zealand manage their board, service delivery, human
resources and finance. This research also sought to understand how the NPOs demonstrate
their commitment to the Treaty of Waitangi. The previous chapter, Non-Profit Management:
A Conceptual Overview, discussed the concept of NPOs and the distinctive nature of non-
profit management. From the discussion on a comprehensive view of non-profit management,
a systems thinking conceptual framework emerged as a guiding framework for this study that
proposed that the way in which NPOs interact with their task environment has a significant
influence on how they operate. The task environment of NPOs is shaped by the historical
context because the non-profit sector is “not an isolated phenomenon, and the development of
the sector in terms of its size and volume is a result of the complex array of historical forces”
(Salamon, Sokolowski, & Anheier, 2000, p. 21). This chapter discusses this historical context
of the non-profit sector in Aotearoa New Zealand to understand how history has shaped the
non-profit sector and contributed to the current challenges faced by the sector. The chapter
explores the historical development of NPOs in Aotearoa New Zealand in five distinct
periods, from the precolonial period to 2017. Following on from this historical context, this
chapter discusses the current challenges faced by NPOs in Aotearoa New Zealand within the
context of the purpose and the research questions of the study.
3.2 Historical Development of the Non-Profit Organisation Sector in

Aotearoa New Zealand
Although the NPO sector is an evolving and growing phenomenon in Aotearoa New Zealand,
the existence of NPOs in Aotearoa New Zealand is by no means a new phenomenon. NPOs
77
have a long history in Aotearoa New Zealand, which is rooted in precolonial and colonial
society. There was a strong tradition of individuals joining informal and formal organisations
in Aotearoa New Zealand (Tennant et al., 2006). It is evident that the historical evolution of
the NPO sector in Aotearoa New Zealand is not an accident, but rather shaped and informed
by the local and global incidents and factors unique to Aotearoa New Zealand and the cultural
context of Aotearoa New Zealand (Cordery, 2012; Sanders et al., 2008; Tennant, 2004, 2007,
2009; Tennant et al., 2008; Tennant et al., 2006). Sanders et al. (2008) identified three major
social factors that have formed the NPO sector in Aotearoa New Zealand. The primary factor
is the presence of the indigenous Māoripopulation. The Māori population traditionally
organised their own forms of social organisation based on whānau (family), hapū (subtribe)
and iwi. The second factor is the legal, political and social rights that followed from the
signing of te Tiriti o Waitangi between the British Crown and Māori in 1840 and the
subsequent settlement of the country by Europeans of predominantly Anglo-Celtic descent.
The influence of this British settlement gave birth to many of the institutional forms of
evidence today. The third factor is the welfare state, which was rooted in the 1938 Social
Security Act and further developed in succeeding decades. It was found that the welfare state
encouraged a close relationship between key NPOs and the government and led to an increase
in the focus of government on strengthening the NPO sector by allocating public resources to
the sector (Sanders et al., 2008). As the tradition of corporate and sizeable philanthropic
giving was less established in Aotearoa New Zealand, NPOs had to rely on the contribution of
the government, resulting in NPOs being accountable to the government (Tennant et al.,
2006). These influences can be established from the historical development of the non-profit
sector, as discussed below. This discussion is descriptive and draws heavily on the following
seminal research on the history of the non-profit sector in Aotearoa New Zealand:
78
 Tennant, M., Sanders, J., O’Brien, M., & Castle, C. (2006). Defining the non-profit
sector: New Zealand (No. 45). Working Paper of the Johns Hopkins Comparative
Nonprofit Sector. Baltimore, MD: The John Hopkins Center for Civil Society Studies.
 Tennant, M. (2007). The fabric of welfare: Voluntary organisations, government, and
welfare in Aotearoa New Zealand, 1840–2005. Wellington, Aotearoa New Zealand:
Bridget Williams Books.
 Tennant, M., O’Brien, M., & Sanders, J. (2008). The history of the non-profit sector in
New Zealand. Wellington, Aotearoa New Zealand: Office for the Community and
Voluntary Sector.
 Sanders, J., O’Brien, M., Tennant, M., Sokolowski, S. W., & Salamon, L. M. (2008).
The New Zealand non-profit sector in comparative perspective. Wellington, Aotearoa
New Zealand: Office for the Community and Voluntary Sector.
 O’Brien, M., Sanders, J., & Tennant, M. (2009). The New Zealand non-profit sector
and government policy. Wellington, Aotearoa New Zealand: Office for the
Community and Voluntary Sector.
A review of the above-cited seminal sources revealed that the history of the NPO sector
unfolded in different distinct periods as significant events and forces marked different periods
of this historical evolution. These sources cover the history from precolonial periods to 2008,
and a review of other sources was conducted to cover the period from 2008 to 2017.
3.2.1 Period I: The Precolonial Period to the 1880s

NPOs in Aotearoa New Zealand have their roots in precolonial and colonial society (Tennant
et al., 2006). The existence of the indigenous population (Māori) brings a unique cultural
dimension to the history of the non-profit sector in Aotearoa New Zealand (Sanders et al.,
2008; Tennant et al., 2008; Tennant et al., 2006). Māori had their own welfare models
developed around family and tribal connectedness long before the signing of te Tiriti o
79
Waitangi in 1840 (Nash, 2001, 2009; Nash & Miller, 2013; Sanders et al., 2008; Tennant et
al., 2008). This family and tribal connectedness was formed around a three-tier descent—the
basic structure of whānau, hapū and iwi (Tennant et al., 2008; Tennant et al., 2006). The
whānau was instrumental in meeting social needs in line with the tikanga (customs) and
kaupapa Māori. Within this social system, welfare was ensured within the context of
whakapapa (genealogy) and whanaungatanga (relationship/kinship) (Nash, 2009), and people
accepted their social responsibilities without having a choice about participation. While these
traditional tribal associational forms had less relevance to the current notions of non-profit,
Tennant et al. (2008) argued that they were dynamic and adaptive, which helped to act as a
basis for hybrid associational forms after European contact.
The arrival of significant numbers of Europeans in the late eighteenth century in Aotearoa
New Zealand influenced the social organisation of that time significantly (Tennant et al.,
2006). Māori social organisation was centred on whānau, but the European settlers came with
a new form of social organisation that went beyond the confines of traditional families. While
the migration was significant, it was insufficient for sustaining an elaborate associational life
for Europeans, and as a result, they were dependent upon Māori for trade and protection
(Tennant, 2007; Tennant et al., 2008; Tennant et al., 2006). This exposed Māori to new forms
of association, and it encouraged them to “borrow from settler organisational forms while
remaining distinctively Māori” (Tennant et al., 2008, p. 7). However, the collectivist nature of
Māori associational models was marginalised by the late eighteenth century, when Britons in
more significant numbers began to migrate to Aotearoa New Zealand after signing the Treaty
of Waitangi in 1840 (Cheyne, O’Brien, & Belgrave, 2008; Tennant et al., 2008). The cultural
encounters and the dual cultural inheritances that resulted from waves of European migration
became the long-term forces in the development of the non-profit sector in Aotearoa New
Zealand (Tennant et al., 2008; Tennant et al., 2006). This colonisation of Aotearoa New
80
Zealand by Great Britain in 1840 had substantial social, political and legal consequences for
the development of new forms of non-profit sector organisations that were based on Anglo
patterns (Tennant et al., 2008).
Tennant et al. (2006) and Tennant et al. (2008) succinctly explained this historical
development, and their accounts are summarised in the following. The initial organisational
forms of Europeans were represented by missionary religious societies, such as the Anglican
Church Missionary Society from 1814, the Wesleyans from 1823 and the Roman Catholic
Church from 1838. Secular forms of non-profits also emerged around this time, such as
temperance associations in 1836 in the Bay of Islands, the Victoria Paternal Association for
the children of English fathers by Māori mothers in 1839 in Paihia and the Kororareka
Association in 1838. There were also friendly societies, craft unions and benevolent societies,
which came into existence in various parts of the country after 1840, such as the friendly
societies in New Plymouth and Nelson over 1841–1842, the Benevolent Society of Carpenters
and Joiners in Wellington in 1842, various sports clubs in Canterbury in the early 1850s and
various cultural and recreational clubs around the country in the1850s–1860s. The sports
associations in particular provided “a common ground upon which settlers from various
points of origin could be integrated into the fabric and values of the emerging community”
(Ryan, 2004, as cited in Tennant et al., 2008, p. 8). The first long-lasting charitable
association was the Auckland Ladies Benevolent Society, formed in 1857, followed by
similar organisations in Dunedin in 1862, Christchurch in 1865 and Wellington in 1867.
While the voluntary donation of time was an essential element of philanthropy at this time,
the strong individualism and limited population numbers appear to have acted against the
emergence of organised charities. The informal nature of labour exchange and communal
interactions limited the ongoing growth of associational forms of non-profits. Māori remained
tribal people in the nineteenth century with their three-tier social support of whānau, hapū and
81
iwi, and pan-tribal movements such as Kīngitanga and the Young Māori Party emerged with
characteristics of European organisational and political forms (Cheyne et al., 2008). These
dual Māori and European settler cultural inheritances have been the long-term influential
elements in the development of the non-profit sector in Aotearoa New Zealand (Tennant et
al., 2008; Tennant et al., 2006).
3.2.2 Period II: The Period 1880–1940s

It has been argued that the sustainability of the NPO sector depends on several factors, such
as population base, means of interaction between individuals and common identities beyond
families, as a motivating force (Sanders et al., 2008; Tennant et al., 2006). These conditions
were more prevalent in Aotearoa New Zealand from 1880 onwards (Tennant et al., 2008).
Tennant et al. (2008) and Tennant et al. (2006) summarised this as follows. The formal ending
of the Aotearoa colonial period in 1907 by dominion status limited land availability for
purchase and settlement. The massive population growth between the 1860s and 1890s
propelled by the state-assisted immigration from Britain and the natural increase in population
was instrumental in building a sense of Aotearoa New Zealand identity that contributed to the
development of non-profit activity along with the advancements in communication and
transportation. The population increase also contributed to urbanisation. The dependence of
Aotearoa New Zealand on Britain for economic affairs in the nineteenth century was an
opportunity for the enhancement of non-profit activity, such as the growth of the Red Cross in
this period. Another prominent feature of this period was the emergence of organised political
parties such as the Liberal Party in the 1890s, the Reform Party in 1909 and the New Zealand
Labour Party in 1916. The growth of trade unionism based on membership in this period was
also quite influential in the growth of the voluntary sector in Aotearoa New Zealand. Another
significant development of the NPO sector in this period was the genesis of organisations
based on gender, especially women’s groups around the issue of female suffrage in the 1880s.
82
The Women’s Christian Temperance Union, started in 1885, was the first women’s
organisation to gain national importance with this development. The most profound impact of
this organisation was that Aotearoa New Zealand became the first country to enfranchise its
women, in September 1893. This political activism by women’s groups then extended to
women’s domestic, employment and economic issues with the establishment of organisations
such as the National Council of Women in 1896, the Plunket Society in 1907 and the League
of Mothers in 1926. Similarly, male-specific organisations were established, such as Rotary in
1921 and the Junior Chamber of Commerce in 1932, and Rotary played an important part in
the establishment of the Crippled Children’s Society in 1935 (Tennant et al., 2008; Tennant et
al., 2006).
Churches became more established in this period, and they started to provide more organised
assistance to communities. Churches provided organisational structures for delivering social
services and focused on destitute adults and youth through the city missions during the 1920s
and 1930s (Tennant et al., 2008). According to Tennant et al. (2008), the Depression in the
1920s was instrumental in the establishment of more voluntary support groups and the First
World War witnessed the emergence of many voluntary organisations both in support of the
war and in opposition to the war, such as the Red Cross and the National Peace Council.
However, the Depression also showed the limitations of voluntary religious efforts in the
ability to meet large-scale welfare needs. This situation demanded more assistance from the
government because there was an absence of large-scale philanthropy. It has been argued that
the relationship between the state and the NPO sector started in the early stages of NPO
growth in Aotearoa New Zealand (Tennant et al., 2006). The earlier relationships can be seen
as enabling the legal environment for NPOs in Aotearoa New Zealand, which was influenced
by the English common law, such as the 1908 Incorporated Societies Act. The government
was heavily involved in providing housing and education, and support to social service
83
organisations in this period. Although it was feared that the expansion of the welfare state by
the first 1935 Labour government under the 1938 Social Security Act would override the
voluntary activities of NPOs, it became apparent that the Labour government acknowledged
the value of the non-profit sector as complementary to the role of the state in providing
welfare services. In fact, people were referred between the two sectors for counselling and
material aid (Tennant, 2004). Organisations such as the Plunket Society benefited hugely
from this government support. However, the friendly societies, with their reliance on private,
individual financial contributions, were affected by the expansion of state welfare services,
and their numbers were significantly reduced between 1938 and 1950 (Tennant et al., 2008).
3.2.3 Period III: The 1940s to the Mid-1980s

The welfare state in Aotearoa New Zealand was in its prime between the 1940s and 1970s
(Tennant et al., 2008; Tennant et al., 2006). This period was marked by stable governments of
the Labour and National parties and full employment and prosperity. Because of the small
size of Aotearoa New Zealand and ministers retaining their portfolios for more extended
periods, many non-profits were able to build favourable relationships with the government.
However, from the 1970s, the changes in economic stability, ranging from the loss of the
favoured status of Aotearoa New Zealand for its exports when Britain entered the European
Union community in 1973 to the oil price rises in the mid-1970s, created several challenges
for Aotearoa New Zealand, such as rising unemployment (Dale, Mooney, & O’Donoghue,
2017; Humpage & Craig, 2008; Maidment & Beddoe, 2016; Tennant et al., 2008). This raised
questions about the viability of the Keynesian welfare state and put pressure on the non-profit
sector especially, with an emphasis on community care and deinstitutionalisation (Tennant et
al., 2008). These changes in the social and economic fabric of Aotearoa New Zealand forced
the non-profit sector to assume some of the welfare responsibilities previously held by the
government (Tennant et al., 2008). This period witnessed the expansion of the NPO sector
84
with assistance from the government, especially among the social service organisations. The
expertise of NPOs in delivering counselling and social services helped them to maintain an
image of being less threatening than services provided by government departments. The
government also supported this expansion with direct grants and subsidies to aid the delivery
of services in areas of need identified by the NPOs, and the majority of this support was rolled
over as a government budget item from year to year. This helped the government to reduce
the public sector involvement in service provision and led to a considerable expansion of
welfare and community organisations from the 1960s. However, as the support for NPOs
increased, the government started to exert more control over these agencies by requiring them
to federate their branches to deal with one agency at the national level (O’Brien et al., 2009;
Sanders et al., 2008; Tennant, 2007; Tennant et al., 2008; Tennant et al., 2006).
These broader changes were supplemented with the increased assertion of individual rights
against the collective values as envisaged in the Keynesian welfare state (Belgrave, 2004, as
cited in Tennant et al., 2008). Also, the assertion of rights based on developing identities, such
as the rights “for Māori as tangata whenua [people of the land]; for women as the oppressed
half of the population; for disabled people” (Tennant et al., 2008, p. 19) influenced the
expansion of NPOs. The focus on identity and rights also saw the expansion of women’s
liberation groups in the early 1970s throughout Aotearoa New Zealand, informed by a new
wave of feminist consciousness (Dale et al., 2017; Tennant et al., 2008). The establishment of
the Human Rights Commission by the Human Rights Commission Act 1977 was also
instrumental in raising awareness about rights as the “act outlawed discrimination on the basis
of sex, marital status and ethical or religious beliefs” (Dale et al., 2017, p. 23). In the 1980s,
they became more diverse and organised around specific areas of women’s oppression, such
as intimate partner violence, pornography and sexual harassment (Tennant et al., 2008).
Although some organisations eventually ceased their operations, organisations such as

85
Women’s Refuge have survived to become major service providers under contract to the
government. The focus on rights and advocacy for marginalised groups also generated new
politically assertive organisations for specific groups such as the disabled and the aged. This
led to the establishment of many self-help and advocacy groups such as the Intellectually
Handicapped Children’s Parents’ Association (Tennant et al., 2008; Tennant et al., 2006).
This period also experienced a growth in Māori voluntary organisations supported by the
revival of Māori identity in the context of urbanisation and an awareness of global movements
in the areas of environmentalism and indigenous and human rights (Tennant et al., 2008). The
organisation of pan-tribal Māori groups, such as the Māori Women’s Welfare League in 1951
and the Aotearoa New Zealand Māori Council in 1962, with Māori concerns and ways of
operating and activism, such as Ngā Tamatoa in the 1970s, by educated young Māori led into
acknowledging Māori rights to tino rangatiratanga (self-determination) and the Treaty of
Waitangi. This focus on Māori rights also led to accepting biculturalism as the official part of
government policy in the 1980s (Tennant et al., 2008). Biculturalism became most evident
with the establishment of the Waitangi Tribunal11 by the Treaty of Waitangi Act 1975 (Dale
et al., 2017). The Treaty of Waitangi and Treaty practices became reference points between
the interaction of government and Māori organisations and provided an increased opportunity
for the development of more Māori voluntary organisations with the help of government, such
as Kōhanga Reo (Māori language nests), which opened in 1982 (Dale et al., 2017; Tennant et
al., 2008).
11 The Waitangi Tribunal is a permanent commission of inquiry charged with making recommendations on claims brought by
Māori relating to actions or omissions of the Crown that potentially breach the promises made in the Treaty of Waitangi. The
Tribunal was initially mandated to review claims made from 1975. It was not until 1985 that the remit was extended to claims
from 1840. Upon the recommendation of the Tribunal, the Crown makes settlements through the Office of Treaty Settlements
(Dale et al., 2017, p. 21).
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3.2.4 Period IV: 1980s–2008

Prolonged economic stagnation followed from the oil crises in the 1970s, and Britain’s
entering into the European Union resulted in massive fiscal deficits and forced the then
National Party government to borrow heavily, resulting in huge government net debt and
stagflation in 1984 (Cribb, 2006; Roper, 2008). When the Labour Party won the elections in
1984, Labour dismantled the Keynesian regime, citing the economic crisis, and embraced
neoliberal doctrines for managing the economy and welfare (Humpage & Craig, 2008; Roper,
2008). This change of government from National to Labour in 1984 resulted in a mass
restructuring of the government and the economy, and had significant consequences for the
NPO sector. After the election in 1984, the Labour government started a consistent approach
to deregulating the economy and dismantling the welfare state, resulting in state sector
reforms known as the Aotearoa New Zealand model of public sector management (Tennant et
al., 2008). From the 1980s, Aotearoa New Zealand reprised its role as the social laboratory in
reverse as the state withdrew from many social activities with the advent of a market-driven
ethos following similar trends in the United Kingdom and United States (Maidment &
Beddoe, 2016; Tennant et al., 2008). Underpinned by theories such as economic liberalism,
agency theory and public choice theory, the restructuring of the state through legislation such
as the 1988 State Sector Act, 1989 Reserve Bank Act and 1989 Public Finance Act resulted in
a market-driven ethos shaping the relationship between government and NPOs (Tennant et al.,
2008). This was characterised by a movement from grant-based funding to contractual
arrangements, reducing government administrative responsibilities (Ellis, 1994; Tennant,
2007; Tennant et al., 2008). This framework for public sector contracting was derived from
agency theory (Cribb, 2005) and sought to establish a separation between policy making or
funding and service provision (Tennant, 2007). It also drew significantly upon New Right
economic theory (Nowland-Foreman, 1997), considering markets the primary and natural
agents to deliver social well-being because they offer choices for individuals according to
87
their self-interest (Humpage & Craig, 2008). This resulted in the creation of quasi-markets by
separating funding and delivery of services from government departments and opening
competition between service providers for funding (Humpage & Craig, 2008). The Treasury
was a dominant force in these reforms, and they saw markets and quasi-markets as the way to
ensure quality services, efficiency and effectiveness across a range of areas (Tennant, 2007).
The change from funding social services through the provision of grants and subsidies to the
use of contracts was formalised by the then Department of Social Welfare in 1991 (Wilson,
2001; Wilson, Hendricks, & Smithies, 2001). It was expected that these changes would
achieve increased transparency through opening up contestability and competition,
accountability and control through formal contract mechanisms by funders of the services to
which they made a financial contribution (Wilson, 2001). Contracts ensured financial
accountability for the government to support a more diverse range of service providers
(Wilson, 2001).
Contractual frameworks allowed the government to establish relationships with a wider range
of organisations than had been the case previously. In particular, smaller non-profit groups,
iwi services and Māori organisations, organisations working with Pacific peoples and
immigrant groups all began to establish relationships with the government (Tennant et al.,
2008). Durie (2005, as cited in Tennant et al., 2008) estimated that the number of Māori
service providers rose from “almost zero to more than a thousand” in the 20 years after 1984
(p. 27). However, for some Māori and iwi organisations, fixed and inflexible contractual
arrangements undermined any notion of a partnership under the Treaty of Waitangi, and they
complained that their holistic approach to service delivery made them enter into an array of
contracts with more than one government agency, making the organisational framework
unnecessarily complex (Tennant et al., 2008). Contracting was also expected to resolve some
of the major bicultural issues confronted by social services and offered an opportunity for
88
existing NPOs to reassess their services and offer culturally appropriate services (Tennant,
2007). As the mainstream organisations were expected to adopt bicultural practices,
organisations that were unable or unwilling to adapt to Māori expectations faced strict
competition for funding (Tennant, 2007). Some organisations contemplated becoming
bicultural agencies or developing parallel Māori and non-Māori services. Adding to this
dilemma, changes to immigration policy in 1987 attracted many migrants from Asia and the
Pacific to Aotearoa New Zealand, and NPOs had to respond to greater diversity and embrace
multiculturalism (Tennant, 2007; Tennant et al., 2008).
The subsequently elected National governments continued the neoliberal approach to welfare
and economic management, and the contractual arrangements with NPOs. The government
decided to reduce the social spending to reduce fiscal debt levels and promoted ideas such as
self-reliance and reliance on the family rather than dependence on the state in line with the
neoliberal ideology (Roper, 2008). The social and economic consequence of neoliberal
policies and widespread discontent with neoliberalism led to the election of a Labour-led
coalition government in 1999. While the Labour government proclaimed the end of
neoliberalism, they retained the central pillars of neoliberal policies under the banner of a
Third Way approach, as proposed by Anthony Giddens, as a middle road between the
Keynesian model and pure market-led approaches (Humpage & Craig, 2008). This approach
focused on social investment and social development over social protection and reaffirmed
the earlier position of the state’s minimal role in providing social services. With the focus on
social investment and social development within a Third Way framework, the government
tried to rekindle the notions of partnership to include stakeholder dialogue and improved
community–government relationships (Humpage & Craig, 2008). This led to new initiatives,
including the appointment of a minister with specific responsibility for the community and
voluntary sector in 1999 and a Community and Voluntary Sector Working Party, which
89
reported in 2001 on dissatisfactions within the non-profit sector (O’Brien et al., 2009;
Tennant et al., 2008). One of its recommendations was for greater research into the sector,
including its history and its relations with the government (O’Brien et al., 2009; Tennant et
al., 2008), and Statistics New Zealand was soon charged with the development of a satellite
account to measure the contribution of the non-profit sector to the Aotearoa New Zealand
economy. A softening of the state sector relationship emerged with the Labour government’s
Statement of Government Intentions for an Improved Community-Government Relationship
(SOGI) in 2001 (New Zealand Government, 2001). The statement promised “a future where
the state performs its role as a facilitator of a strong civil society based on respectful
relationships between government and community, voluntary and iwi/Māori organisations”
(New Zealand Government, 2001, p. 1). This statement was intended to underscore the
government’s commitment to the development of a new, partnership-based approach to
working with non profit sector organisations that value the governance and working realities
of NPOs (O’Brien et al., 2009). As a formal document issued by the government, the SOGI
represented a significant point in the history of government–NPO sector relationships
(O’Brien et al., 2009). As an aspirational document, it sought to encourage a range of
collaborative approaches rather than mandating a single approach to be used in all situations.
However, some government agencies did not see the SOGI as applying to them at all because
it originated in another department instead of their own (O’Brien et al., 2009).
The 2001 SOGI was followed by the establishment of the Office for the Community and
Voluntary Sector (OCVS) within the MSD in 2003 (O’Brien et al., 2009; Tennant, 2009;
Tennant et al., 2008). The OCVS led a number of important initiatives concerning funding,
accountability, participation in policy, promoting generosity and volunteering. In 2004, these
developments came together with the appointment of a Committee for the Study of the
Aotearoa New Zealand Non-profit Sector, comprising representatives of the sector,

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independent researchers and academics. Working closely with the OCVS and Statistics New
Zealand, the committee forged links with the Johns Hopkins University in the United States
and contracted researchers from Massey University to undertake the qualitative aspect and
Statistics New Zealand to carry out the quantitative aspect of a comprehensive study into the
Aotearoa New Zealand non-profit sector. Funding for the research came partly from the MSD
but also from two philanthropic bodies—the Combined Community Trusts and the Tindall
Foundation. Government and philanthropy joined forces to fund (and closely oversee) an
investigation of the non-profit sector in Aotearoa New Zealand, including its history, scope,
economic significance and relationship with the government (O’Brien et al., 2009). In 2005, a
Charities Commission became operational to oversee the voluntary registration of charities
under the Charities Act 2005 and to promote public trust and confidence in the charitable
sector and ensure their validity and good governance (Charities Services, n.d.). This opened a
charities’ register for the public to verify charities details.
3.2.5 Period V: 2008–2017

The change of government from Labour to National in 2008 saw significant policy shifts in
the relationship between the NPO sector and the government. On their way out, the then
Labour government commissioned the Association of Non-Governmental Organisations of
Aotearoa (ANGOA) to undertake a review of the SOGI. However, ANGOA only reported
back when the National government came back into power (Nowland-Foreman, 2016). This
review found that the SOGI continued its value as an affirmation of the government’s trust
and respect towards the NPO sector and it recommended entrenching its practices even more
concretely into the administration of the government (Nowland-Foreman, 2016). However,
the National government allowed the SOGI to lapse and replaced it with the document Kia
Tūtahi Standing Together: The Relationship Accord between the Communities of Aotearoa
New Zealand and the Government of New Zealand in 2011 (Department of Internal Affairs
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[DIA], 2015). Nowland-Foreman (2016) argued that the new accord was even more relaxing
and hollow than the original SOGI, and failed to reflect any of the 15 recommendations of the
SOGI review. A review of the 2011 accord conducted recently by the DIA, with the help of
the NPO sector umbrella organisation Hui E, also revealed that only 20% of the 991
organisations they surveyed were aware of the relationship accord (Hui E, 2015). Of those
who reported being aware of the accord, over a third could not give any specific examples of
how the Kia Tūtahi practices were evident in the initiatives. Also, this review found that 60%
of the government agencies were not aware at the time of the survey of any resources that
could assist them in strengthening their engagement with communities (Hui E, 2015).
In addition to revising the relationship and engagement with the non-profit sector, the
National government went quietly about undoing most of the previous government’s other
sector initiatives. In 2007, on its way out, the Labour government committed significant
funding under the Pathways to Partnership programme to build NPO sector capability and
address the problem of part funding of contracted social services (Nowland-Foreman, 2016).
However, the new National-led government did not continue this promise. The government
redirected just 20% of the total promised Pathway to Partnership funding to a time-limited
community response fund in 2009 to support NPOs facing financial difficulties or increased
demands following the 2009 global financial crisis (Nowland-Foreman, 2016; Treasury,
2013). The independent Charities Commission established under the Charities Act 2005 was
also disestablished, and the functions of the Commission were moved to the DIA in 2012
(Charities Services, n.d.). Charities Services now maintain the Charities Register under the
Charities Act 2005 and an independent three-person Charities Registration Board makes
decisions about registering or deregistering charities (Charities Services, 2016; Phillips,
2016). The OCVS was also disestablished, and the functions were moved from the MSD to
the DIA in 2011 (DIA, n.d.). Frequent restructuring and staff changes in government
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departments in the late 2000s such as these resulted in broken relationships between NPOs
and government.
The new National government also signalled its intention to work with community-based
social services to reshape the funding model to ensure that funding delivered the best value
for money, and that it reflected the policy priorities of the government and position services to
effectively respond when Aotearoa New Zealand emerged from the global financial crisis
(Nowland-Forman, 2016; O’Brien et al., 2009). In 2012, the National government launched
its own Investing in Services for Outcomes initiative within the MSD (2012). This policy
proposed an investment framework and strategy to link funding decisions with the
government’s priorities; an organisational capability framework to improve the quality of
funded social services to meet the government’s priority outcomes; and more streamlined,
outcome-based contracts (MSD, 2012, 2013a). As part of this initiative, the MSD promoted
an Organisational Capability Self-Assessment Tool as a capability framework for NPOs
wanting to receive funding from the MSD. This framework included capabilities in strategic
governance; financial viability and sustainability; adaptive leadership; operational
management; workforce development; outcome focus; organisational technology; innovation;
collaboration; and organisational responsiveness to diversity, including to Māori, Pacific
peoples, refugees and migrants communities, people living with disability and children and
young people (MSD, 2013b). The focus on streamlined contracting led the Cabinet to direct
the Ministry of Business, Innovation and Employment, through its Government Procurement
Branch, to lead a three-year streamlined contracting with NPOs project, to reduce duplication
and compliance costs in 2013 (MSD, 2013a). This included developing standard outcome-
based agreements, and incorporating results-based accountability (RBA) within the
contracting framework as the preferred mechanism to support an increased focus on outcomes
in government contracting (MSD, 2013a). This RBA framework was put in place as a
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mechanism to reduce variance in, and duplication of, contract management practices across
government agencies (MSD, 2013a). The Investing in Services for Outcomes programme led
the National government, especially in its third term, to focus on:
 the extensive development of contracting with the private and the NPO sectors for
social service delivery
 purchasing and reporting on outcomes preferably through an RBA framework
 tighter targeting of services purchased to predetermined political priorities
 calculating return on investments (in reducing long-term public expenditure)
 being evidence based, particularly through greater use of “big data” (Nowland-
Foreman, 2016, p. 58).
All these shifts in policy approaches to social service delivery have been promoted as a social
investment approach of applying rigorous and evidence-based investment practices to social
services (Treasury, 2016, para. 1). Bill English (2015a, para. 94), the then Minister of
Finance, described the social investment approach as “spend money now to secure better
long-term results for the most vulnerable Aotearoa New Zealanders and lower costs to the
government in the future”. He also said earlier in an address to the Treasury that social
investment is “a more rigorous and evidence-based feedback loop linking service delivery to a
better understanding of people’s needs and indicators of the effectiveness of social services”
(English, 2015b, para. 43). Consequently, the MSD (2015) developed a new Community
Investment Strategy recently to tightly align social service funding with three specific
government priority results areas: children at risk of maltreatment, young people at risk of
offending and victims/survivors of family violence and sexual violence (MSD, 2016a). To be
implemented over the period between 2015 and 2018 covering all social services purchased
by the MSD (valued over $300 million) and the Ministry of Youth Development, the
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community investment strategy aimed to align government funding to those with the highest
needs and with providers who can demonstrate that they can meet those needs with evidence
about what works through an overarching Results Measurement Framework (RMF) (MSD,
2016a). This requires the social service NPOs to direct their services to focus on the
government’s priority results, collect data to build the evidence base for programme
effectiveness and align their services with government priorities.
This focus on investment and outcomes is evident in the RMF, which is used to collect data
and build evidence under the community investment approach. The RMF has two levels: the
population level, focusing on high-level government priorities and offering a set of
intermediate outcomes for the three priority areas for contracted service providers, and the
performance level, focusing on providers’ performance in service delivery and measuring
aspects such as quantity, quality and client results in each of the priority result areas (MSD,
2016b). By July 2018, results measures will be in all providers’ contracts. Collecting client-
level data from providers is expected to enable the MSD to look across other programmes and
services that clients access that are funded by other government agencies, which marks the
movement to results-based contracting.
The investment approach also involves using social sector accreditation standards to assess
the capability and capacity of NPOs to deliver the services contracted by the MSD from April
2016 (MSD, 2016c). The current Cross-Government Accreditation project means that various
government agencies, such as Health, Justice, Education and the Department of Corrections,
will be using the social sector accreditation standards to contract out services and share
accreditation information through the Cross-Government Accreditation Register and NPOs
will be subject to uniform compliance requirements (MSD, 2016c). Depending on the level of
services, the providers are assessed against the accreditation standards related to:
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 client-centred services
 community well-being
 cultural competence
 staffing
 health and safety
 governance and management structure and systems
 financial management and systems
 resolution of complaints related to service provision
 quality improvement
 client services and programmes. (MSD, 2016c)
Additionally, NPOs are subjected to MSD-specific accreditation standards for care services,
iwi social services, and outdoor programmes for children and young people, and iwi
community services under the MSD approvals framework, which involves a number of acts,
such as the Children, Young Persons and Their Families Act 1989. In addition to meeting the
10 accreditation standards, providers need to comply with and keep up to date with legislative
changes, such as the latest Health and Safety at Work Act 2015, which have an impact on
service delivery (MSD, 2016c).
As it is still unfolding and yet to be implemented fully, the impact of community investment
is yet to be seen, and it is too early to evaluate its effectiveness and its impact on NPOs.
However, the community investment approach already has had a significant impact on how
the MSD invests its money and funds NPOs. This is evident from the significant funding
shifts made by the MSD for the 2016/17 financial year. A recent line-by-line review of MSD
funding resulted in providers losing the contracts for the services they provided in areas such
as family and crisis counselling, information and advice, advocacy work as a sector umbrella
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group and parents’ centres (MSD, 2016a). For instance, Relationships Aotearoa, the largest
provider of professional counselling and relationship education, which was receiving NZ$8
million a year from various government ministries and departments had to cease their
operations due to funding cuts in 2015 (Robinson, 2015). The closure immediately affected
approximately 7,000 clients and 183 staff. In addition to these changes, reprioritisation of
funding resulted in NPOs losing contracts for services such as Parents as First Teachers,
Strengthening Families and NGO Social Work Study Awards (MSD, 2016b). The current
MSD funding level demonstrates that the MSD has invested $196.7 million to support
vulnerable children at risk of maltreatment, $38.1 million to support vulnerable young people
at risk of offending and $51.8 million to support adult victims/survivors of family violence
and sexual violence for the year 2016/17 (MSD, 2016d).
O’Brien (2016) has argued that the investment approach results in social service delivery that
is heavily influenced by the political and ideological framework of investment, vulnerability
and outcomes. This framework has been described as being shaped by a neoliberal approach
to social welfare (O’Brien, 2016). The overall policy push reflects the lesser
acknowledgement of the broader role of NPOs in contributing to community cohesion and
social capital (Nowland-Foreman, 2016). Nowland-Foreman (2016) has further argued that
the focus on procurement of services to meet government priorities and requirements is
turning NPOs into “little fingers of the state”, as described by Nyland in 1993. In other words,
the degree of government control of social services risks significantly curtailing NPOs’
hitherto more independent and outspoken role in advocating for their communities of interest.
This makes the NPOs more vulnerable and “repeats the worst extremes of contractualism
resulting from two contradictory neoliberal trends: increased pressure to contract out,
downsize and decentralise while exerting greater control over the functions that have just been
made autonomous” (Nowland-Foreman, 2016, p. 60). As investments are expected to yield

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returns, improving outcomes from social service programmes has been a strong and dominant
dimension of government work on social services over the past five years. Historically and
traditionally, NPOs had a wider role beyond service delivery, encouraging community
participation and leadership and enhancing cooperation and trust (Nowland-Foreman, 2016),
and they identified, prioritised and worked towards meeting community needs (Cheyne et al.,
2008). The current outcomes approach alters this significantly, as the government now
decides needs and funding based on their ideological and political priorities rather than by the
needs identified by social services agencies, their users and the community (O’Brien, 2016).
A focus on investment also forces many agencies to adapt their programmes to reflect the
direction of funding availability rather than the needs identified by families, communities and
NPOs (O’Brien, 2016). While moving away from their original purposes and priorities under
a contracting framework, NPOs are now forced to work towards constantly shifting
government agendas, limiting the social value created by NPOs (Neilson et al., 2015). As
Nowland-Foreman (1997) long ago illustrated, as NPOs become professional and
standardised in their operation to meet their accountability requirements to the government,
they are cajoled into “becoming more like government—in their recruitment practices, in their
accountability procedures, in their record-keeping, in their service eligibility criteria, in a
standardization of the way in which they operate, and so on” (p. 25). As a result, “government
funding and contracting processes are eroding the special characteristics, strengths, and
infrastructures of the community and voluntary sector” (Neilson et al., 2015, p. 9).
O’Brien (2016) also argued that the Aotearoa New Zealand approach to investment minimises
the role of the state to concentrate on expenditure within a framework of reduced citizenship
rights. He called it an “antithesis” of social development. O’Brien (2016) also identified a
number of critical difficulties in the identification of outcomes because the relationship
between risk factors and poor outcomes are mixed and complex. Moreover, the quantitative
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approach to measuring the outcomes will not provide any information about how those
outcomes were achieved and may not offer any valuable or meaningful information for
families, agencies or practitioners to efficiently contribute to the development of better
practice (O’Brien, 2016). Similarly, Nowland-Foreman (2016) noted that the investment
approach distorts service provision through not being holistic and responsive to individuals
with a long-term focus, and it increases spending on monitoring, reporting and transaction
costs (p. 60). He further argued that results are affected by many unanticipated external
factors, making them more expensive, time-consuming, uncertain and unreliable (Nowland-
Foreman, 2016, p. 61). While the criticisms of the investment approach and contracting for
outcomes are growing, social service NPOs in Aotearoa New Zealand are still relying heavily
on contracts from the government for their income because corporate funding and other
philanthropic funding are minimal in Aotearoa New Zealand. This helps the government to
maintain its status as the main funder for social service organisations for delivering
government-prescribed services and for holding significant power over these organisations.
The current contracting environment has been described by the key social services
commentators referred to throughout this chapter as characterised by an unequal relationship,
emphasising investments and outcomes, and in so doing, creating significant strategic and
operational challenges for the NPO sector in Aotearoa New Zealand.
3.3 Contemporary Issues Confronting the Non-Profit Organisation Sector

in Aotearoa New Zealand
The competition for funding makes the NPOs vulnerable and poses significant operational
challenges while the demand for services is increasing from their communities (Neilson et al.,
2015). The non-profit bi-annual sectoral surveys conducted by Grant Thornton between 2005
and 2016 demonstrated that the major operational challenges faced by NPOs have
fundamentally remained the same over the past decade (Grant Thornton, 2005, 2008, 2009,
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2011, 2013, 2016). Error! Reference source not found.ummarises the critical operational
challenges identified by NPOs over the years in these surveys. The table demonstrates that the
primary concern for NPOs in the past decade is funding and financing the activities of the
organisation. Other sectoral surveys conducted by ComVoices in 2014 and 2016 revealed the
same concerns regarding funding and financial management among NPOs in Aotearoa New
Zealand. This is unsurprising in the current environment of competitive contracting
characterised by government priorities and policies (Sanders et al., 2008). Both the empirical
and theoretical research evidence that became available in the past decade (2006–2016)
suggests that the funding uncertainty in a contracting environment affects the viability,
functioning and performance of NPOs. This poses significant challenges for the management
of the interrelated operational aspects of finance, service delivery, governance, human
resources, organisational infrastructure and relationship building in NPOs (ComVoices, 2014,
2016; Grant Thornton, 2013, 2016; O’Brien et al., 2009).

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Table 3-1. Operational challenges faced by NPOs: A summary of sector surveys

2015 (n = 305) 2013 (n = 344) 2011 (n = 243) 2009 (n = 181) 2007 (n = 297) 2005 (n = 382)
Primary concern Primary concern Primary concern Primary concern Primary concern Primary concern
-Funding -Funding -Funding -Funding -Funding and financing the -Funding
Major challenges Major challenges Major challenges Major challenges activities of the -Financing the activities of
organisation the organisation
-Managing risk -Governance -Controlling expenditure -Financing activities of the
organisation Major challenges -Governance
-Use of technology -Social enterprise -Government
-Fundraising -Retaining and motivating Major challenges
-Retaining of staff -Social media -Risk management
key staff
and volunteers Other issues -Keeping up-to-date with -The role of board and -Sustainability of income
governance issues -Governance and role of sources
Other issues -Risk management legislation
board
-Governing body -Understanding of legal Other issues -Retaining and motivating
-Financial reporting -Performance monitoring
member’s liabilities -Retaining and motivating key staff
-Government Other issues
awareness of their Other issues staff -Managing the volunteers
legal responsibilities -Alignment to outcomes -Attracting new board
-State of economy -Managing and compliance -Compliance with
-Use of independent -Impact assessment cost of staff members regulations and financial
-Volunteers
directors -Controlling expenditure -Website management and -Compliance with reporting
-Demand for services regulations and financial
-Board -Digital communication maintenance Other issues
remuneration -Board and governance reporting
-Increased demand for -Impact of internet -Charities Commission
-Board development service -Retaining and -Impact of internet and
-Compliance with -Impact of
motivating key staff complexity of IT issues
-Financial reporting -Compliance with regulations internet/complexity of IT
regulations -Impact of IT -Charity Commission
-Impact assessment -Finding right advice -Problems relating to
environment -Managing volunteers
and stakeholder -NFP sector -Compliance with financial government
reporting collaboration, -Compliance with -Government
reporting -Communicating with
competition regulations and financial
-Dealing with business risks -Strategic development stakeholders
reporting
-Retaining and -Succession planning -Raising public profile and
-Doing more with less -Charities Commission
motivating staff membership levels
-Strategic development and -Getting recognition for the
-Lack of resources -Charities Commission
planning value of work undertaken -Structural organisational
-Volunteer management -Managing and changes
-Organisational structure -Dealing with business
compliance cost of staff
-State of the economy risks such as fraud -Fair distribution of funds
-Health and safety -External relationships
requirements -Increasing workload
-Disaster recovery plans
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The operational challenges identified by other research on the non-profit sector as listed in
Table 3-2 demonstrate that the operational difficulties fundamentally remained the same in
the past decade, which is similar to the findings from Grant Thornton surveys.
Table 3-2. Operational challenges as identified in Aotearoa New Zealand non-profit sectoral
surveys between 2006 and 2016
Author and number of Operational challenges identified
organisations/people surveyed
BDO (2016b) Fraud and risk management

N = 471
ComVoices (2016) Service delivery; financial pressures and contracting environment;
N = 286 staffing and volunteers; financial viability
BDO (2016a) Financial reserve level

N = 471
Neilson et al. (2015) Increased vulnerability; professionalisation; accountability and risk
N = 70 people in 9 organisations aversion; standardisation and competition
ComVoices (2014) Service delivery; funding and financial viability; staffing;

N = 311 relationship with government and sector organisations; advocating
for the sector
NGO Health & Disability Network Funding, staffing; IT systems
(2013)
N = 15
Lee (2012) Job satisfaction; job dissatisfaction and retention
N = 15.
Darkins (2010) Security of funding; recruiting and retaining staff and volunteers;
N = 12 key informants & 222 maintenance of good communication; managing good board, staff
and management relations; meeting requirements of cultural
sensitivity; meeting challenges of organisation’s growth; staying in
touch with the original vision; effective networking, sound
financial management
Haigh (2008) Governance and relationship between board and CEO; strategic
N = 12 planning; Treaty of Waitangi issues; legal issues; relationships with
funders; meeting the needs of Pacific Island communities;
managing the CEO; funding; CEO succession planning;
organisational restructuring
Cayley (2008) Governance; fundraising and financial management; strategy and
policy; recruitment and development of volunteers and staff;
evaluation, monitoring and quality assurance; managing IT and
legislation changes
Family and Community Services and Business processes; policies and procedures; employment and
OCVS (2005) human relations; financial management; governance; IT
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It is evident that the current challenges faced by NPOs are multidimensional and primarily
related to finance, service delivery, staff, volunteers, governing boards and technology and
culture. These challenges are discussed below.
3.3.1 Financial Management

The available evidence suggests that NPOs are struggling to find funding to support their
service delivery because they are often given partial and short-term funding under the
contracting process. To meet the service delivery needs, NPOs are then required to use their
reserves to help their daily service delivery (BDO, 2016b). Recent evidence suggests that
many organisations are not able to plan for more than 12 months ahead based on their current
funding and have expressed concern that they would not be able to survive for more than six
months if their current funding were not renewed (ComVoices, 2016; Grant Thornton, 2016).
This funding uncertainty also requires NPOs to spend a significant amount of time seeking,
applying for and accounting for funding or trying to find alternative sources of funding,
including generating their own income through establishing or buying social enterprises
without sufficient preparation or due diligence, thus posing further financial risks (Grant
Thornton, 2016). Evidence also suggests that funders are requiring more compliance and
placing more restrictions on organisations, but are not increasing their funding to cover the
increased costs of administering contracts and achieving the required outcomes (ComVoices,
2014, 2016). The new Financial Reporting Act 2013 and the Financial Reporting
(Amendments to Other Enactments) Act 2013 have also introduced a number of changes to
the Aotearoa New Zealand financial reporting system, with ongoing implications for NFPOs
(Grant Thornton, 2016). The extra time, staff and technology resources required to meet
increased compliance requirements such as data and evidence gathering, police vetting, health
and safety procedures and reporting to various government bodies, such as Charities Services,
the Registrar of Incorporated Societies and Inland Revenue, are putting enormous demands on
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NPOs and affecting their ability to spend time with clients (ComVoices, 2016). Redirecting
the resources to meet compliance requirements rather than service provision and adherence to
standardisation in the contracting regime negatively affects NPOs’ ability for innovations in
problem-solving and responding to the socio-political changes that affect the communities
(Neilson et al., 2015).
3.3.2 Service Delivery Management

The limitations on funding directly affect the provision of services (Sanders et al., 2008).
Evidence suggests that the majority of the organisations are doing more work than specified
in contracts, ranging from 25% to 50%, because organisations have more people accessing
their services and deal with more complex issues (ComVoices, 2014, 2016; Nowland-
Foreman, 2016). While the organisations have more work than ever, only a few have the staff
skilled enough to deal with the increasing complexity of issues they are working with, as there
is no capacity either to recruit staff with the necessary skill sets or to provide salary increases
for existing staff (ComVoices, 2014, 2016). Also, contracting for outcomes through services
creates demand for programme evaluation and performance management, and NPOs are
struggling to meet their obligations because they do not have enough resources and capability
(Lockyer, 2015). Because the service users experience a combination of issues involving
dealing with multiple agencies, navigating the system is more complex, and NPOs need to
advocate for their service users. However, as the government does not fund for advocacy
services, NPOs’ ability to advocate for their clients and communities is constrained. NPOs are
even worried to advocate for their clients and raise concerns with government departments, as
they fear losing money for speaking out (ComVoices, 2016).
3.3.3 Staff Management

Adding to the complexities, because the contracting model requires NPOs to be more
professional in their operations and service delivery, the funding issues have a direct impact
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on the capacity of NPOs to recruit and retain highly skilled personnel (ComVoices, 2014,
2016; Grant Thornton, 2011, 2013, 2016; Sanders et al., 2008). Because the median base
salary in NPOs is 16.1% less than the general labour market (Strategic Pay, 2016), NPOs face
direct competition from the private and state sectors for staff as the pool of experienced staff
is small (Sanders et al., 2008). The 2016 Strategic Pay not-for-profit remuneration survey of
13,530 employees in 262 organisations revealed that only 28% of NPO employees received a
salary increase, 49% received the same and 23% received a lower salary than the previous
year. Also, the CEO pay levels in NPOs are 30% lower than the private sector and 10% less
than the public sector (Whelan, 2017). In addition to remuneration, poor career progression is
a major reason for NPOs not being able to retain staff (Grant Thornton, 2016). The challenges
faced by NPOs in recruiting and retaining staff results in frequent organisational restructuring,
minimal or no salary increases for staff, no increase in staff level and making staff redundant
or reducing their hours, which leads to stress and burnout for existing staff and more reliance
on volunteers (ComVoices, 2016). Furthermore, the casualisation of the workforce is a trend
occurring in the NPO sector in line with the general labour market trends (ComVoices, 2014,
2016). This often leads to low morale in organisations and creating a feeling among NPOs
that the policy makers have no empathy or understanding of the sector (ComVoices, 2016).
3.3.4 Volunteer Management

While organisations are trying to compensate for the lack of staff with volunteers, recruiting
and retaining them becomes a concern because the availability of volunteers is declining
(Sanders et al., 2008). The latest non-profit satellite data suggest that although more people
are volunteering, they are contributing fewer hours, resulting in demand exceeding supply
(Statistics New Zealand, 2016). As contracts specify the nature of service delivery, the nature
of volunteering is changing, with progressively formalised job descriptions, supervision and
performance reviews (Sanders et al., 2008). This professionalisation of volunteering leads to

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volunteers sometimes feeling oppressed by the increased training demands, accountabilities
and compliance with legislation that has become part of the non-profit sector (ComVoices,
2016). Furthermore, contracting creates a service provision system that is highly
individualised and fails to build on community needs and strengths (Neilson et al., 2015).
This is of particular significance to Māori because there is a need to maintain the core cultural
values and tikanga, which is often only possible with the support of whānau, iwi and hapū
(Sanders et al., 2008). Therefore, the insufficient volunteer availability negatively affects the
service delivery, governance and operations of the sector (Sanders et al., 2008).
3.3.5 Governance and Board

While the diminishing availability of traditional volunteers is affecting NPOs’ ability to
recruit volunteers for the governing boards and to retain them, the current environment of
contracting and increased compliance and reporting under various laws also puts immense
pressure on NPO governing boards because they are legally liable for the operations of the
organisations. These organisational pressures require NPOs to have experienced people with
strong business, finance and legal backgrounds because an inexperienced volunteer board
may put organisations at legal and financial risks. Recent evidence suggests that a majority of
board members are unaware of their legal responsibilities and that a significant proportion of
organisations do not have induction procedures for new board members for them to
understand the goals, challenges and responsibilities of the organisation (Grant Thornton,
2016). Additionally, the constitutions of the boards are not reviewed on a regular basis, and a
majority of the organisations do not have any board assessments to enhance their board
members’ knowledge (ComVoices, 2016; Grant Thornton, 2016). Legislation, such as the
new Health and Safety at Work Act 2015, has become more restrictive than enabling and
there are now more than 40 pieces of legislation that apply to NPOs, making it hard for the
volunteer governing board members to keep track of these legislative requirements. Board
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members are also becoming reluctant to be involved in making personal donations,
introducing donors and fundraising campaigns (ComVoices, 2016).
3.3.6 Technology
NPOs are also increasingly required to embrace technology to engage with various
stakeholders and support their service delivery effectively. This necessitates technology
investments in web, social media and other digital platforms. However, due to the limited
funding available for developing organisational infrastructure, many organisations are not in a
position to invest in technology (Grant Thornton, 2016). Social media is reshaping the way
NPOs do marketing and communicating with service users, funders and the communities they
serve. However, few NPOs incorporate social media as a core strategy to capitalise on this
virtual and cost-effective engagement tool (Grant Thornton, 2014). Large NPOs are more
active than small NPOs in using social media to engage with stakeholders. While social media
platforms can increase the presence of NPOs, they can be easily damaging if not properly
managed (Grant Thornton, 2014).
3.3.7 Culture
While NPOs face many operational issues as a result of the contracting environment, they
also face a set of cultural challenges from the growing ethnic diversity in Aotearoa.
According to the 2013 census, 74% of the population belong to European ethnicity, 14.9%
belong to Māori, 11.8% belong to Asian, 7.4% belong to Pacific people and 1.2% belong to
the Middle Eastern, Latin American and African category (Statistics New Zealand, 2013).
While the changes in the ethnic composition can be attributed to Aotearoa New Zealand
becoming a multicultural country, the Treaty of Waitangi and the Crown–Māori relationship
are still issues of utmost importance to Aotearoa New Zealand society (Sanders et al., 2008).
Consequently, the Treaty and bicultural practice frameworks are still dominant aspects of the
NPO sector, and NPOs need to develop models of governance and service delivery systems
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that suit Māori needs and aspirations and reflect their cultural uniqueness and values
(Munford & Sanders, 2010; Sanders et al., 2008). However, for many organisations, there is
considerable uncertainty about how to achieve the Treaty’s bicultural requirements in their
practice (Sanders et al., 2008). Because the organisations are required to demonstrate that they
fulfil Crown obligations under the Treaty of Waitangi and are culturally competent to work
with Māori clients when delivering government-contracted services, the Treaty remains a
central point of reference for many NPOs and their relationship with the government (O’Brien
et al., 2009; Sanders et al., 2008). Also, while the new ethnic groups form their own ethnically
distinctive organisations for service delivery, existing mainstream NPOs still need to respond
to this ethnic diversity as organisations contracted out by the government. This requires them
to be culturally competent to work with people from a range of cultures (Tennant et al., 2008).

Many current issues faced by NPOs, especially the relationship with the government in
Aotearoa, are deeply grounded in the past. NPSSOs historically operated in a supplementary
role to the state. They then became complementary to state provision and then alternate
providers. As large-scale philanthropic funding is limited and the government continues to
contract out essential personal social services to NPOs, a good relationship with the
government grounded in partnership is vital for the survival of NPOs in Aotearoa New
Zealand. NPOs generally look for a positive partnership with the government, in which
holistic and innovative solutions can be developed, but most feel that the current situation is
adversarial and characterised by low trust. This chapter identified some of the key challenges
currently faced by NPOs in Aotearoa New Zealand: funding and financial management,
service delivery, staff and volunteer management, governance and board management,
maintaining their commitment to te Tiriti o Waitangi and meeting the bicultural requirements
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of the operation. The next chapter, Research Methodology, discusses the research approaches
and the strategies used for conducting this research enquiry.

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CHAPTER 4: RESEARCH METHODOLOGY

resources and finance. The previous chapter provided a detailed review of the literature on the
historical development of the non-profit sector in Aotearoa New Zealand. The chapter also
discussed the current challenges faced by NPOs in relation to the board, service delivery,
human resources and finance. This chapter outlines the overall research strategy adopted in
this study to develop an understanding of how NPOs manage their organisational elements.
This chapter starts with a discussion on the pilot study conducted to establish the feasibility of
the study. It then explains how an appropriate research strategy was adopted to address the
research questions raised in Chapter 1. Based on the research strategy adopted, this chapter
provides an account of the research design, unit of measurement, population and sampling
process, the instrument used for data collection and how data were analysed and interpreted.
The chapter concludes with a discussion on how ethical issues were addressed in this study.
4.2 Pilot Study

Research projects that include a research degree such as a PhD programme cannot be
conducted successfully without checking the feasibility of the project first. While a review of
the available literature provides insights into the research gaps and theoretical perspectives in
the wider subject area, a pilot study helps to assess the feasibility of the project in terms of the
kind of data to be collected, the methodology to be followed and the instruments to be used
and so on. A pilot study is essentially a scoping exercise, which helps to identify and define
potential participants and stakeholders of the study. It is the best way to assess the feasibility
and can be seen as a trial run and is an essential prerequisite to any empirical research project
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(Jensen & Laurie, 2016; Thabane et al., 2010). Since the focus of the research is the
management of NPSSOs in Aotearoa New Zealand, I visited three such organisations in
Christchurch, Aotearoa New Zealand, and interviewed the managers or CEOs and board
members in the early stages of the research. In the interview, I asked the managers and board
members about their understanding of the management and governance process in NPOs and
the challenges and opportunities faced by their organisations. This process was invaluable,
and it helped to frame research questions and methods of enquiry. The senior supervisor of
this research project had been acting as a board member for an NPSSO during this research
and was able to share a firsthand description of the nature and processes involved in the board
of governance of these organisations. This provided invaluable input in the scoping and other
stages of research and is acknowledged here, as it was additional to regular supervision. I also
attended a number of conferences on non-profit management and governance in Aotearoa
New Zealand, Australia and India as a speaker and a delegate in the past few years. These
conferences were invaluable opportunities to engage in critical conversations about non-profit
management with academics, researchers, board members, managers and other stakeholders,
such as government officials and funding agencies that deal with NPOs. These conversations
aided profoundly in formulating the research questions, and determining the scope and
relevance of research and a method of enquiry. They also provided anecdotal evidence and
insights into the current challenges faced by the non-profit sector in Aotearoa New Zealand.
The conferences are listed below in year order to illustrate their contribution to this study:
 Sixth Australasian Better Boards Conference, 28–29 July 2012, Melbourne, Australia.
 Inaugural New and Emerging Community Researchers Seminar, 5 November 2011,
Wellington, Aotearoa New Zealand.
 National Not-for-Profit Sector Conference, 11–12 March 2011, Auckland, Aotearoa
New Zealand.
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 Management Information System and Documentation in Non-Profit Organisations,
29–31 July 2009, Karl Kübel Institute for Development Education, Coimbatore, India.
 National Not-for-Profit Sector Conference, 19–20 March 2009, Napier, Aotearoa New
Zealand.
 Ninth Biennial Conference on Australia and New Zealand Third Sector Research, 24–
26 November 2008, Auckland, Aotearoa New Zealand.
4.3 Overall Research Strategy

Many research methods theorists (Bryman, 2004; Cohen, Manion, & Morrison, 2011;
Creswell, 2002, 2009, 2013; Mertens, 2007; Neuman, 2011) have recommended that the
research strategy selected for any research enquiry should address considerations such as
ontology, epistemology, methodology and research design. Accordingly, a quantitative
research methodology using a survey design informed by positivist epistemology and
objectivist ontology was adopted as the overarching research strategy for this project. These
considerations are discussed below.
4.4 Ontological Considerations

Ontology refers to our assumptions of how we view the world and our understandings
regarding the nature of reality (Bhattacherjee, 2012; Creswell, 2013). Bryman (2012) stated
that there are two ontological philosophies regarding the nature of social entities, namely,
objectivism and constructionism, which is also known as constructivism. Ontology is thus
concerned with whether the social entities should be considered objective entities that exist
externally to social actors (objectivism) or whether they are socially constructed and a product
of perceptions and actions of social actors (constructivism) (Bryman, 2012; Neuman, 2011).
Objectivism positions social phenomena as outside our control; they have an independent
existence to us as stakeholders (Bryman, 2012) that can be objectively investigated through

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quantitative research (Braun & Clarke, 2013; Bryman, 2012). In contrast,
constructionism/constructivism posits that social phenomena are not independent of
stakeholders but are created and revised by the interaction between stakeholders, and can be
investigated through qualitative research (Bryman, 2012). The entities considered in this
research are NPSSOs. These organisations have a mission statement, physical structures, legal
validity, rules and regulations, and standardised procedures for getting things done. They have
a division of labour and hierarchy. In this sense, they have a social order that exerts pressure
on individuals to conform to the requirements of the organisation and a social reality that is
external to the people involved with the organisations. An objectivist ontology is, therefore,
most appropriate for this study.
4.5 Epistemological Considerations

Epistemology refers to our assumptions related to the nature of knowledge (Tuli, 2011). An
epistemological issue considers the question of what is regarded as acceptable knowledge
about the world and how we enquire about that knowledge (Bryman, 2012). The central
question in social research is whether the social world can be studied according to the same
practices and procedures as those of studying the natural world (Bryman, 2012; Creswell,
2013). A positivist epistemological position takes the view that the social world can be
studied as if it were the natural world through observation and theory testing. Positivism
utilises science and causal behaviour to explain reality (Neuman, 2011). An interpretive
epistemological position takes the view that the subject matter of the social world—people
and institutions—is different from that of the natural world and needs to be studied based on
the individual’s subjective understanding and meaning-making of his or her experience
(Bryman, 2004; Creswell, 2013). Interpretivism portrays the world as socially constructed,
and can change according to time and context (Tuli, 2011). The purpose of this research is to
understand the management of NPSSOs against widely accepted practices of management in

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the areas of the board, service delivery, human resources and finance. This enquiry is based
on measurement of these critical variables against a set of criteria rather than against the
perceptions of individual agency staff and their boards of governance. The analysis of
management practices warrants objective measurement of variables, observation and
interpretation of facts. This is important to see the relevance of existing standards or to
suggest new standards. Hence this research has taken a positivist epistemological perspective.
4.6 Methodological Considerations

The methodological consideration of selecting a quantitative or qualitative approach depends
on researchers’ orientation towards the conducting of research based on their epistemological
and ontological beliefs. Quantitative methodology values objective and numerical data, which
fits with an objectivist ontology and positivist epistemology, whereas qualitative methodology
identifies and analyses data gathered from human experience, which fits with constructivist
ontology and interpretivist epistemology (Bryman, 2012; Creswell, 2009). Qualitative
research processes are inductive, allowing researchers to focus on unpacking the meaning
behind the participants’ experience rather than focusing on the description of the issue itself,
which is the process of a quantitative deductive approach (Creswell, 2013). Newman and
Benz (1998, as cited in Creswell, 2013) argued that qualitative and quantitative
methodologies represent different ends of a continuum and should not be viewed as opposites.
Quantitative data are commonly framed as numbers and qualitative data as words (Creswell,
2013). Creswell (2013) differentiated the qualitative method as “an approach for exploring
and understanding the meaning individuals or groups ascribe to a social or human problem”
(p. 4), whereas quantitative research is described as “an approach for testing objective theories
by examining the relationship among variables” (p. 4). The objective of the qualitative
research is to interpret meaning drawn from the experiences, opinions and stories of the
participant to inductively explore new concepts and generate ideas (Alston & Bowlers, 2012;
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Bryman, 2012). A quantitative approach was adopted for this study for a number of reasons.
This approach is suitable to answer the research questions focused on the description of the
phenomenon of NPO management and the examination of the relationship between variables.
The quantitative methodology also aligned with the objectivist ontology and the positivist
epistemology perspectives taken in this study. Based on the considerations discussed above,
an overarching research strategy is a quantitative approach that entails deductive reasoning
with the norms of positivist epistemology and is linked with objectivist ontology.
4.7 Research Design

Creswell (2013) proposed that within all research methodologies, such as quantitative and
qualitative, the researcher needs to decide on a type or a strategy of enquiry that can provide
specific direction for research procedures such as sampling, data interpretation and hypothesis
testing. This type or strategy of inquiry is generally known as research design (Bryman,
2012). As observed by Raman and Nimmagadda (2007), quantitative research generally
addresses questions of why and how something exists or happens in the social world. The
primary purpose of this study was to describe the management of NPSSOs and examine the
relationship between various management variables. This purpose called for adopting a
quantitative research design that can provide numerical descriptive information and analysis.
A survey design caters to this need to provide a quantitative numerical description of trends,
attitudes or opinions of a population by studying a sample of that population. From sample
results, the researcher generalises or makes claims about the population (Creswell, 2003; de
Vaus, 2002; Jensen & Laurie, 2016). Survey design is used to describe patterns in the large
population or determine individuals’ characteristics within a population (Jensen & Laurie,
2016). Surveys are also used to “measure some aspects of a social phenomenon or trend”
(Denscombe, 2014, p. 4). Other researchers, such as Cohen et al. (2011), also support the
appropriateness of survey design by proposing that “surveys gather data at a particular point
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of time with the intention of describing the nature of existing conditions, or identifying
standards against which existing conditions can be compared, or determining the relationships
that exist between specific events” (p. 256). Polit and Hungler (1999) supported this view by
saying that a survey is designed to obtain information from populations regarding the
prevalence, distribution and interrelations within those populations.
A survey design was selected for this study primarily because of its ability to meet the
purpose of describing the nature of NPO management compared against the statements of
recommended practice in the literature. A survey design also fits with the overarching
research strategy by being inherently quantitative and positivistic (de Vaus, 2002). The
advantages of flexibility, versatility, efficiency, generalisability and broadness of scope
(Engel & Schutt, 2013) were also determining factors for selecting a survey as the research
design.
The survey design adopted for the study was cross-sectional, with the data collected at one
point in time. This was necessary to collect the quantifiable data of more than two variables at
one point of time to establish variations between cases and to detect the patterns of
association (Bryman, 2004).
4.8 Participant Selection: Decision Framework

NPSSOs that were registered as charities under the Charities Act 2005 were the unit of
analysis in this research. For this reason, the findings of the study are mainly applicable to
social services NPOs. While some of the findings may apply to other types of NPOs, such as
sports, culture, art, health and education, they are not considered the unit of analysis in this
study. The non-profit sector in Aotearoa New Zealand is very diverse and complicated due to
the legal frameworks and their operational nature. To conduct research within the constraints
of a PhD programme, it was necessary to adopt a decisional framework to establish the

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parameters of the unit of analysis. The unit of analysis guided the selection of population,
sampling frame and sampling process. It was also of paramount importance because the
research adopted a survey design to measure the unit of analysis. The decisional framework
developed on the unit of analysis in this study was based on three dimensions of the non-
profit organisations: the level of functioning, the primary activity/main sector of NPOs and
the legal context. These dimensions are discussed below.
4.8.1 Dimension I: The Level of Functioning

Researchers (Hassan & Zafar, 1999; Rahman, 2003) have identified three types of NPOs—
grass roots organisations (GROs), support organisations (SOs) and intermediary or mid-level
organisations—according to their level of functioning but irrespective of their activities. The
bottom-level GROs, also known as community-based organisations (CBOs), usually function
at the neighbourhood level and are run by the members themselves. They are informal in
many cases, with fewer resources, and their outreach is limited to the members of that
organisation and does not involve meeting the needs of wider communities; therefore, they
would not fulfil the purpose of this research if they were selected as the subject of the study.
The upper-level SOs, also known as funder NPOs, are mostly international or national
funding organisations and they are bigger than the other two types in terms of their outreach
and resources. Even though they exist in small numbers, they have well-established formal
systems and procedures. They do not work directly with clients; rather, they work with GROs
and intermediary NPOs to support the community. Based generally in Western countries, such
as Aotearoa New Zealand or Australia, they are particularly interested in international
development rather than national or regional developments. If these segments of NPOs were
the subject of the study, the research purpose would not be realised; in addition, the
stakeholders of the research would be extremely small in number. The intermediary NPOs
exist in large numbers, are legal entities in most cases, and are being managed by professional
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staff and overviewed by a board of governance. These types of NPOs usually work directly
with clients or in collaboration with the other two types of NPOs. It is very common for them
to work in close relationship with the government and business organisations to generate
resources for their activities and they have a relatively high presence in Aotearoa New
Zealand. Most of the social service agencies in Aotearoa New Zealand are examples of these
intermediary NPOs, and since social service organisations are the unit of study, these
intermediary NPOs were selected to be the population of the research.
4.8.2 Dimension II: The Primary Activity of Non-Profit Organisations

The non-profit sector in Aotearoa New Zealand is very diverse and consists of organisations
with different activities, such as health, education, sports, culture, social services, as their
primary purpose. The New Zealand Standard Classification of Non-Profit Organisations
(NZSCNPO) developed by Statistics New Zealand (the official national statistics office) was
used as the guiding framework to select social services as the primary activity for the NPOs in
this study. The NZSCNPO classification lists 12 major activity groups12 and subgroups in the
NPO sector (Statistics New Zealand, 2007). The NZSCNPO does not define social services,
but provides a brief description of them as “a vast range of social service providers,
emergency and relief services and institutions providing income support and maintenance.
Examples are early intervention services, services for the disabled and elderly, food banks,
self-help and other personal social services such as temporary issues for refugees” (Statistics
New Zealand, 2007, p. 56). Tennant et al. (2006) noted that iwi-related social services are a
significant group within these social services. They further define Māori providers as social
service organisations that either work exclusively with Māori or work from a Māori world
view. The significance of social service organisations in the NPO sector and the reasons for
12 The 12 activity groups are culture and recreation; education and research; health; social services; environment;
development and housing; law, advocacy and politics; grant making, fundraising and voluntarism promotion; international;
religion; business and professional association, unions; and not elsewhere classified.
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electing them as the focus of this study were established in the introductory chapter. Hence,
social services as the primary activity of NPOs was selected as the second dimension of the
organisational framework.
4.8.3 Dimension III: Legal Framework

Even though the NZSCNPO classification system estimated the total number of NPOs and
subgroups, it does not provide a list of NPOs in Aotearoa New Zealand according to their
primary activity. This effectively limited the prospects of having a register of NPOs that could
have been used as a potential sampling frame for this study. Therefore, the unit of the analysis
decision framework had to consider the legal framework as a dimension to establish a
sampling frame because some of these legal frameworks offer a register of NPOs in Aotearoa
New Zealand. NPOs in Aotearoa New Zealand, irrespective of their level of functioning and
their primary activity as discussed above, have to consider specific laws and regulations,
which establish their legal status as organisations. Tennant et al. (2006) concluded that the
legal framework refers to three interrelated types in Aotearoa New Zealand:
 regulation of an organisation’s legal entity (laws of incorporation)
 regulation of an organisation’s tax treatment
 registration as a charity.
The main laws of incorporation available for NPOs are the Incorporated Societies Act 1908,
the Charitable Trusts Act 1957 and the Companies Act 1993. However, organisations can
choose to be incorporated or unincorporated (Tennant et al., 2006). Incorporation offers many
advantages, such as entering into contracts, receiving grants and limited liability on members.
Incorporation also maintains their credibility and visibility in the sector. However, as 61% of
115,000 NPOs in Aotearoa New Zealand were estimated to be unincorporated, only 20%
were incorporated under the Incorporated Societies Act 1908 and 15% under the Charitable
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Trusts Act (McLeod, 2017). Von Dadelzen (2013) estimated that there were 21,035 charitable
trusts and 23,674 incorporated societies in Aotearoa New Zealand as on 30 June 2012, as per
the Companies Office Register. However, the Companies Office Register does not provide a
list of organisations according to their primary activity, making it challenging to select social
service organisations. While the Inland Revenue Department (2009) provides various tax
exemptions to NPOs, they need to be registered with Charities Services to avail themselves of
the exemptions. Charity Services (https://www.charities.govt.nz/) manages the registration,
monitoring and education of charities according to the New Zealand Charities Act 2005, and
registration is voluntary.13 They also maintain a Charities Register for the public interest. This
register provides information about registration and contact details, charitable purpose, areas
of operation, past and present officers and annual returns. This register can be searched by the
primary activity or main sector of the organisations, such as social services. More
importantly, similarly to the Statistics New Zealand Satellite Account, the Charities Register
uses the NZCNPO to categorise the NPOs based on their primary activity (McLeod, 2017),
thus providing a more accurate picture of social service organisations that are registered.
Also, the NPOs self-select their primary activity when they register with Charities Services,
which results in a more representative list of social service organisations. The organisations
incorporated under other laws still need to register with Charities Services to avail themselves
of tax benefits. For these reasons, the Charities Register was used as the sampling frame since
other registers do not provide a list of organisations based on their activities.
4.9 Unit of Analysis

The unit of analysis of the study was one intermediary NPSSO in Aotearoa New Zealand that
meets all the inclusion criteria, subject to the exclusion criteria listed below. While the survey
13Charitable purpose has a special meaning in law, as stated at section 5 of the Charities Act 2005: “unless the context
otherwise requires, charitable purpose includes every charitable purpose, whether it relates to the relief of poverty, the
advancement of education or religion, or any other matter beneficial to the community”.
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was addressed to the CEOs of the organisation, it is important to note here that the individual
CEOs or chairs of the governing boards of NPOs were not a unit of analysis even though they
provided information regarding the organisational management practices of their
organisations. The reason is that the research describes the management practices of the
organisation, not the manager’s or chair of the board’s individual characteristics or practices.
The following inclusion and exclusion criteria were set for this study to meet the objectives
and the valid and reliable measurement of the phenomena under study.
4.9.1 Inclusion Criteria

The criteria for inclusion were:
 a registered charity under the provisions of Charities Act 2005
 incorporated either under the Incorporated Societies Act 1908 or the Charitable Trusts
Act 1957
 an operating age of at least three years as on 31 March 2010
 employing at least three full-time equivalent (FTE) staff14
 an annual income between NZ$300,000 and NZ$1 million.
14FTE is the sum of all full-time employees plus half the number of part time employees. The FTE was calculated on the
basis that two part-time employed people are equivalent to one full-time employed person (Statistics New Zealand, 2017). In
this study, this means a minimum of at least three full-time staff or six part-time staff.
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4.9.2 Exclusion Criteria

The following exclusion criterion was established to meet the objectives of the study and limit
the scope:
 Membership-based Māori organisations will not be considered for the study unless
their primary activity is social service to the Māori population.
4.10 Population
Population refers to the set of units that the sample is meant to represent and to be selected
from (Bryman, 2012; de Vaus, 2002). In this study, the unit of analysis was one intermediary
registered NPSSO in New Zealand. Hence, the population of this research is all the NPSSOs
in New Zealand who are registered charities under the Charities Act 2005 and whose details
are available on the Charities Register. As on 30 November 2013, there were 26,926 charities
and 2,309 social service organisations in the Charities Register. It is also important to mention
that out of the 2,309 social service organisations, only 1,809 organisations had current
registration at that time, and the remaining 502 organisations were deregistered under the
various provisions of the Charities Act 2005. These data were obtained by using the advanced
search function in the Charities Register. The total number of social service organisations in
the Charities Register could have been considered the size of the population. However, the
population size was hard to determine because new units are added to the population list
every time a new charity is registered with Charities Services. Also, not all the social services
charities in the Charities Register were able to meet the inclusion criteria. Because of these
methodological and practical limitations, this research did not determine the size of the
population units, but decided to draw a sampling frame from the Charities Register for
sampling purposes.
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4.11 Sampling Frame

A sample is a subset of the population and is obtained by collecting information about only
some members of that population group (Bryman, 2004; de Vaus, 2002). A sampling frame is
a list of all the population units from which the sample is selected (Bryman, 2004; de Vaus,
2002). As noted before, this research used the Charities Register to draw a sampling frame to
make the sample more representative. The sampling frame in this research is a list of
registered charities that are identified with social services as their main sector or primary
activity in the Charities Register. Under the Charities Act 2005, the following information is
publicly available on the Charities Register about each registered charity:
 name, address and registration number
 registration status
 names of all past and present officers since the organisation was first registered
 a copy of its rules
 annual returns
 charity update notices
 copy of application for registration.
Section 28 of the Charities Act 2005 allows searching of the register only by the following
persons for the following purposes:
(a) an individual, or a person with the consent of the individual, for the purpose of
searching for information about that individual:
(b) a person for the purpose of determining whether an entity is registered as a charitable
entity under this Act:

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(c) a person for the purpose of obtaining information concerning the nature, activities,
and purposes of a charitable entity:
(d) a person for the purpose of knowing how to contact a charitable entity:
(e) a person for the purpose of assisting the person in the exercise of the person’s powers
under this Act or any other enactment:
(f) a person for the purpose of assisting the person in the performance of the person’s
functions under this Act or any other enactment (Charities Act 2005, p. 26).
The purposes (b), (c) and (d) were applicable to this research project.
The sampling frame for this research was developed using the advanced search function
available on the online Charities Register
(http://www.register.charities.govt.nz/CharitiesRegister/CharityAdvancedSearch.aspx). The
search was carried out by using main sector is social services in the search fields. A
screenshot of the register is provided in Appendix 5: Charities Register Screenshot. The
search produced an Excel worksheet with the following sets of columns: charity name, charity
registration, charity group information, charity admin, charity charitable purpose and charity
contact information. The Excel sheet had the details of deregistered charities, and this had to
be removed from the list to confirm the sampling frame. Because of this, approximately 20
trials had been done in four weeks to check the accuracy of the sampling frame. The final
sampling frame comprised 1,390 charities that identified social services as their main sector
and received and maintained their registered status by 30 September 2010. As a result, social
services charities that were registered after 30 September 2010 were not included in the
sampling frame and hence did not belong to the population group in question and were not
selected for the study.

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4.12 Sampling Technique

This research used a probability sampling technique to select the participants of the study.
Probability sampling is one in which each unit in the population has an equal chance of being
selected (Bryman, 2012; de Vaus, 2002). While the stratified random sampling would have
been an ideal sampling technique to use because the study involved two groups, Māori and
non-Māori NPOs, the nature of the sampling frame did not allow creation of a list of
organisations as Māori and non-Māori organisations. Moreover, it also risked the possibility
of the researcher determining an organisation as a Māori organisation or non-Māori that is not
consistent with the indigenous people’s right to self-determination as declared in Article 3 of
the United Nations Declaration on the Rights of Indigenous Peoples (UN, 2007). So it was
decided to allow the organisations in the survey who were selected through a probability
sampling technique to self-define their identity. Probability sampling is considered the best
way to get a representative sample without any researcher influence on the selection process
(Denscombe, 2014). Within the probability sampling type, this study used simple random
sampling to select the unit of analysis from the sampling frame. Simple random sampling, the
most common form of probability sampling, is used to select a sample in an unbiased and
rigorous way to assess the behaviour of the larger population because it allows
representativeness (Alston & Bowles, 2012). The sampling frame consisted of 1,390
population units, and each was listed with serial numbers from 1 to 1,390. A total of 225
(16%) organisations were then selected from the sampling frame as the intended sample for
the survey by an online random number generator by specifying the minimum (1) and
maximum (1,390) values. The reason for selecting this number was that the sampling frame
could not produce a list of organisations that met the inclusion and exclusion criteria adopted
for the study. The other consideration was that as an invited survey, participation was
voluntary and it was impossible to know the NPOs’ willingness to participate.

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4.13 Sample Size

A total of 225 organisations were selected as the intended samples for this study. The
questionnaire was sent to these organisations. A total of 69 completed questionnaires were
returned to the researcher. Four questionnaires were discarded, as they did not meet the
inclusion criteria set for the study. Therefore, the achieved sample size was 65. This means
that a 28% response rate for the survey was achieved. This is higher than other non-profit
sector surveys. Similar surveys conducted by Grant Thornton (2011, 2013) in 2010 and 2012
among NPOs in New Zealand returned only 17% and 18% respectively. The sampling frame
adopted for this study could not confirm the population list because there was no possible
mechanism to list NPOs that met the inclusion and exclusion criteria set out for the study
from the sampling frame. This means there was a possibility that many NPOs who received
an invitation to participate in the survey could not meet one or more of the inclusion criteria
set and might have self-selected themselves out of the study.
4.14 Profile of the Participant Organisations

Sixty-five (N) NPOs from 10 regions in Aotearoa New Zealand participated in this study.
Figure 4.1 shows the number of organisations located in these 10 regional areas in New
Zealand. A majority of these organisations (n = 23) were based in Auckland, reflecting the
population distribution of NPOs operating in New Zealand. Twenty-two NPOs identified
themselves as Māori/iwi social services providing services to the indigenous Māori
population.
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Figure 4.1. Participant organisations according to the regional areas
Gisborne
Otago
Manawatu-Wanganui
Hawkes Bay
Regional areas
Bay of Plenty
Northland
Wellington-Wairarapa
Canterbury
Waikato
Auckland
0 5 10 15 20 25
Number of organisations
Out of the 65 organisations studied, 35 organisations (53.8%) offered services in the regional
area and 21 organisations (32.3%) provided services in a local area at a district or city council
level. Only nine organisations (13.8%) provided services at the national level. More than half
of these NPOs (58.5%) were registered as an incorporated society under the Incorporated
Societies Act 1907, one of the primary forms of incorporation in New Zealand. The remaining
NPOs (41.5%) were registered as charitable trusts under the Charitable Trust Act 1957. More
than half of the NPOs in this study (53.8%) were registered as charities under the Charities
Act 2005 in 2008, followed by 29.2% registered in the year 2007, and the remaining were
registered in 2006 and 2009. Table 4-1. Fields of practice shows the number and percentage
of NPOs working in the various fields of practice.

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Table 4-1. Fields of practice

Fields of practice (N = 65) n %
Mental health 8 12.3
Health & disability 12 18.5
Family and child welfare 12 18.5
Domestic violence 12 18.5
Community development 9 13.8
Youth 5 7.7
Criminal justice 1 1.5
Refugee & migrant support 3 4.6
Sexual violence & crisis counselling 3 4.6
4.15 Data Collection Instrument

This research used a self-administered questionnaire (see Appendix 4: Questionnaire) as the
data collection instrument. Questionnaires are one of the most widely used instruments in
survey research, and they provide structured numerical data. Questionnaires are known for
their advantages, including lower administration costs, the absence of interviewer effects, no
interviewer variability, convenience for respondents and the ease of analysis (Bryman, 2004;
Cohen et al., 2011). The sample of this research was widely dispersed geographically and was
a major factor in choosing a questionnaire as the main data collection instrument. The
questionnaire was designed to answer the research questions and intended to measure four
major constructs related to the management of NPOs, namely, the board, service delivery,
human resources and finance. The questionnaire had eight sections to measure the different
dimensions of these constructs. They were:
 Section A—General profile of the organisation
 Section B—Board management
 Section C—Service delivery management
 Section D—Human resource management
 Section E—Financial management
 Section F—Office management

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 Section G—Relationship building
 Section H—Commitment to te Tiriti o Waitangi
 Section I—Additional questions.
In this questionnaire, NPOs were asked a number of closed-ended questions in all sections
and to rate their management of each dimension on a three-point management practices rating
scale in sections B, C, D and E. These three-point (always, sometimes or never) management
rating scales were used to rate the practices of the management of the governing board (30
items), service delivery (12 items), human resources (28 items) and finance (20 items). The
human resource management scale consisted of a staff management subscale (16 items) and a
volunteer management subscale (12 items). Each item of the management rating scales
represented a widely recommended management practice of that dimension and each NPO
was asked to rate the extent (always, sometimes or never) to which they follow these
recommended management practices to demonstrate how well they manage these key
dimensions of NPO management. In addition to the three rating options, NPOs were provided
with options to indicate whether the statements were not applicable to them or whether they
were unsure of them. Space for additional open-ended comments was also provided to expand
on any of the stated management practices. The statements of management practices
(individual items in the scales) adopted in this study were compiled based on the guidelines
and standards of recommended practices in the management of the board, service delivery,
human resources and finance as observed in the academic literature and in the following non-
profit organisational assessment tools:
1. Carter, M. (Ed.). (n.d.). Checklist of non-profit organisational indicators.
Minneapolis, MN: Greater Twin Cities United Way.

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2. Freeman, F., & Thompson, S. (Eds.). (2005). Self-assessment tool for organisations—
SCOPE project. Auckland, New Zealand: Tindall Foundation.
3. MANGO. (2009). Mango’s health check: How healthy is financial management in
your not-for-profit organisation? (Vol. 3). Oxford, UK: Author.
4. Wyatt, M. (2004). A handbook of NGO governance. Budapest, Hungary: European
Centre for Not-for-Profit Law.
As the NPOs’ rating of their management practices varied, the organisational risks in each
area also varied. To understand the level of management in each of these dimensions and the
associated organisational management risk they might carry, a total scale score was calculated
for each of these management practice scales by summating their rating (always = 4,
sometimes = 2 or never = 0) of each management practice. An associated risk level was then
gauged by dividing the total score of each management scale into four categories based on the
percentage of the total scores as per the 4 × 4 management practice level and associated risk
matrix developed in this study. Table 4-2. Management practice and risk level matrix shows
this 4 × 4 matrix and the percentage values used to create the matrix.
Table 4-2. Management practice and risk level matrix

Percentage of total Management Risk level
scale score practice level
(Min = 0, Max = 100)
0–50 Poor High
51–75 Average Medium
76–90 Good Low
91–100 Excellent No risk
Table 4-3. Management rating scales score ranges according to the levels of performance
provides the details of the calculation of the management practice and risk level matrix. The
data collected in this research was interpreted according to this scoring scheme and is
discussed in the next chapter, Results.

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Table 4-3. Management rating scales score ranges according to the levels of performance
Dimensions of non- Minimum Maximum Score ranges according to the practice-risk level
profit management score on score on the (percentage of the maximum score of the scale)
the scale scale
Poor Borderline Good Excellent
practice & practice & practice practice &
high risk medium risk & low no risk
(0–50%) (51–75%) risk (91–100%)
(76–90%)
Board 0 120 0–60 61–90 91–108 109–120
Service delivery 0 48 0–24 25–36 37–43 44–48
Staff 0 64 0–32 33–48 49–58 59–64
Volunteers 0 48 0–24 25–36 37–43 44–48
Human resources 0 112 0–56 57–84 85–100 101–112
(Staff + volunteers)
Finance 0 80 0–40 41–60 61–72 73–80
Overall management 0 360 0–180 181–270 271–324 325–360
4.16 Reliability of the Instrument

Pallant (2011) explained that “the reliability of the scale indicates how free it is from random
error” (p. 6). In other words, reliability means that “individual scores from an instrument
should be nearly the same or stable on repeated administrations of the instrument, they should
be free from sources of measurement error and consistency” (Creswell, 2002, p. 180). Alston
and Bowlers (2012) outlined that reliability is about the consistency of the variables
measured. Accordingly, this research has adopted internal consistency as the reliability
measure because it is used when researchers use multiple items to measure a single concept
(Engel & Schutt, 2013). “Internal consistency is the degree to which the items that make up
the scale are all measuring the same underlying attribute (i.e., the extent to which the items
hang together)” (Pallant, 2011, p. 6). Cronbach’s alpha coefficient is the most commonly used
statistic for internal consistency because it provides an indication of the average correlation
among all the items that make up the scale (Field, 2013; Pallant, 2011). The values of
Cronbach’s alpha range from 0 to 1, with higher values indicating greater reliability. For a
scale to be reliable, the Cronbach’s alpha should be above .7 (Creswell, 2002; Pallant, 2011).
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Table 4-4. Scales: Internal consistency values shows the value of Cronbach’s alpha for each
of the scales used in this study and shows that all the scales have values above .7, indicating
good internal consistency and high reliability.
Table 4-4. Scales: Internal consistency values

Scale name Number of Indicator of internal consistency Value
items
Board management scale 30 Cronbach’s alpha coefficient .82
Service delivery management 12 Cronbach’s alpha coefficient .87
Human resource management 28 Cronbach’s alpha coefficient .80
Financial management 20 Cronbach’s alpha coefficient .91
Combined management scale 90 Cronbach’s alpha coefficient .90
4.17 Validity of the Instrument

The validity of the scale refers to “the degree to which it measures what it is supposed to
measure” (Pallant, 2011, p. 7). De Vaus (2002) argued that there is no ideal way to determine
the validity and further suggested that “if the definition of the concept is well defined or well
accepted, use content validity” (p. 54). Accordingly, this study has used content validity as the
measure of validity. Each construct in this study was operationalised and measured based on
the definitions and explanations offered in previous studies or models of NPO management.
Also, before the questionnaire issuance, every item was examined in terms of the relevance of
the questionnaire content and study purpose by two academics with related academic
backgrounds and two managers of NPOs. The pre-testing of the instrument with 10 NPOs
also helped to ensure the content validity. Accordingly, the scales employed in this study
reached prescribed standards of content validity, often referred to as face validity (Alston &
Bowlers, 2012), and expert validity.
4.18 Pre-Test
Pre-testing of the questionnaire is an essential task in any social survey research to increase
the reliability, practicality and validity of the questionnaire. It helps to “identify omissions,
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redundant and non-significant items” (Cohen, et al., 2011, p. 402). To achieve this, the
questionnaire was sent to 10 organisations in the sampling frame before data collection. Based
on the questionnaire responses and suggestions from the managers of these organisations who
participated in the pre-testing, 10 open-ended and five closed-ended questions were removed.
Fifteen items were removed from the scales, as they were not relevant to social service NPOs
in New Zealand. These organisations were not included in the sampling process.
4.19 Sources of Data

The primary data were collected from the NPSSOs, which were registered charities in New
Zealand, to describe and analyse their management practices. Secondary data were collected
from official publications such as the Charities Register and Statistics New Zealand’s NPO
satellite account to determine the size of the NPOs, population units and sampling frame and
data collection.
4.20 Process of Data Collection

The data were collected over a period of eight weeks. The questionnaires were mailed to the
organisations selected through the sampling process. The questionnaires were accompanied
by an information sheet explaining the purpose and procedures of the research and the contact
details of the researcher and supervisors (see Appendix 3: Information sheet). It also included
a prepaid envelope addressed to the researcher to return the questionnaires. The surveys were
addressed to the managers (also known as chief execuitive officers) of the organisations as
they manage the day-to-day affairs of the organisations. The pilot study and pre tests revealed
that the managers deal with requests such as participating in research as the NPOs are small-
scale organisations in terms of its staff size and budget. Managers are expected to be
knowledgeable about all the organisational processes and practices and are best equipped to
provide information about the management practices including board management. All the
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communications from the NPOs related to this survey came from the managers. So the
managers of the NPOs responded to the survey in consultation with the board.
The organisations were given four weeks to return the questionnaire, and 28 questionnaires
were received back in four weeks without any reminders. Five questionnaires were returned to
the sender as undelivered. A reminder was then sent to all the sample NPOs because the
survey was anonymous after four weeks. Managers of seven organisations responded that
they did not receive the survey and asked for it to be sent again and managers of three
organisations advised that they did not want to participate in the survey. A further two weeks
were given to return the survey with this reminder. Within these two weeks, another 24
questionnaires were returned. A final reminder was sent to the organisations with another two
weeks to return the questionnaire and 17 were received back within this two-week period.
This made a total of 69 responses. As stated above in Section 4.13, Sample Size, four surveys
were discarded, as they did not meet the inclusion criteria, which made 65 as the final sample
size.
4.21 Data Analysis and Interpretation

The collected data were cleaned, edited, coded and entered by the researcher into Statistical
Package for Social Sciences (SPSS) version No. 23 for data analysis and interpretation. Both
descriptive statistics and inferential statistics were used to analyse the data. Descriptive
statistics of frequencies and measures of central tendency were used to describe the data.
Inferential statistics of Pearson’s correlation and Spearman’s correlation were used to
examine the relationship between variables, and independent samples t-tests, Mann–Whitney
U tests and chi-square tests were used to find the difference between groups (Field, 2013;
Pallant, 2011). Also, analysis of variance (ANOVA) and the Kruskal–Wallis test were used to
find the difference between groups. Chapter 5, Results, provides details of all the analysis.
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While the questionnaire provided space for additional comments regarding the management
of the board, service delivery, staff, volunteers and finance, none of the participant
organisations offered any additional comments. Four additional open ended questions were
also asked in section I of the questionnaire to provide additional commentary on non profit
management. One question received only four responses and other questions received no
responses from the organisations. As these comments were very limited, it was not
appropriate to conduct a thematic or content analysis. However, these comments were
incorportaed in the discussion chapter to support the arguments rather than simply presenting
them in the results chapter.
4.22 Axiology Considerations

Axiology refers to the values inherent in the researcher and in the information upon which the
research is based (Cohen et al., 2011; Creswell, 2013). Values incorporate the feelings and
beliefs of an individual and include personal biases, which will invariably influence the
research process (Alston & Bowlers, 2012; Bryman, 2012). As a result, researchers should
acknowledge their values and be critically reflective of the impact of their values and beliefs
on the research project (Bryman, 2012; Cohen et al., 2011; Neuman, 2011). My gender, ethnic
and cultural identity, work experience as an academic and past career experience as a trainer
and consultant in the NPO sector could have contributed to personal value biases. The preface
explains how my career experience influenced the development of the subject of this research
project. I employed a three-level strategy to minimise the impact of personal value biases.
Firstly, this research followed an objective view about the subjects of the research and did not
have any face-to-face or telephone interactions with research participants in the data
collection stage. The participants were anonymous in this research and this could have helped
to minimise researcher and participant biases in the research process. Secondly, I took a stand
as a reflexive researcher, taking into account as many different perspectives of a situation as

135
possible (Payne, 2005). This helped me to identify areas where there was a conflict of interest
and continued to clarify the purpose of research (Alston & Bowlers, 2012; Bryman, 2012).
Finally, I also took a critical researcher perspective by not taking things for granted or at face
value, but actively looking for alternative views (Payne, 2005). In addition, the research
supervision process was used to clarify the biases.
4.23 Ethical Considerations

This research was conducted in accordance with the University of Canterbury’s (2008)
Human Ethics Committee Principles and Guidelines. Accordingly, the Human Ethics
Committee of the University of Canterbury, as per the approval memo Ref# HEC 2010/93,
provided an ethics approval to conduct this research project (see Appendix 2). The researcher
is a full member of the Aotearoa New Zealand Association of Social Workers (ANZASW)
and followed the guiding ethical practices in the ANZASW (2008) Code of Ethics, section 8:
Responsibility for Research and Publications. The researcher is also a registered social worker
in Aotearoa New Zealand under the Social Worker’s Registration Act 2003 and thus
researched according to section 3.f of the Code of Conduct issued by the Social Workers
Registration Board (2008). These guidelines required that the social work researcher practice
with professionalism and integrity while adhering to practices of human rights and social
justice, and I have abided by these requirements.
The unit of analysis in this study was an NPSSO in Aotearoa New Zealand, and the research
collected information on organisational management practices. This research did not involve
gathering personal information of a sensitive nature about or from individuals. The NPOs
were invited to participate in an anonymous survey through invitation (see information sheet
in Appendix 3). The information sheet contained the purpose, nature and methodology of the
study. The NPOs were informed that the survey was entirely voluntary and they could choose
136
whether or not to participate in the study. The contact details of the researcher and the
supervisors were given to participant organisations in the information sheet if they needed to
ask questions about the research. The survey used an anonymous questionnaire to collect the
data to minimise the social desirability bias. Accordingly, no consent form was distributed to
participants as they were clearly informed that completion of the questionnaire implied
consent. As a result, the researcher was not able to identify the participant organisations from
the questionnaires returned. However, a random number was provided in each questionnaire,
without a list being made, corresponding to each organisation’s details to enable the
participating organisations to withdraw from the research should they want to, including
withdrawal of information they had provided, until the questionnaires were collated. This
ensured the confidentiality and anonymity of the information provided by the participant
organisations, but also provided the ability to withdraw by simply quoting the random number
in the questionnaire without being identified. No NPOs requested to withdraw from the
studies after returning the questionnaire. The NPOs were informed about the use of data for
publications, including the thesis, journal articles, seminars and conference presentations
based on the research theme. The participant NPOs were also informed that the PhD thesis
would be a public document and thus available for public reference through the University of
Canterbury Library research repository. This research did not involve any deception. There
were no physical, emotional, moral or cultural risks to human beings since the organisations
were the unit of analysis.
The researcher consulted Mr Jim Anglem (Ngāi Tahu), the kaumatua (the recognised
authority on tikanga Māori) of the Department of Social Work and Human Services at the
University of Canterbury for advice about the cultural appropriateness of the research and
how to be consistent with te Tiriti o Waitangi and its obligations. Cultural advice was also
sought from Leisa Moorhouse (Ngā Puhi), a registered social worker and a Social Workers
137
Registration Board member, to ensure the appropriate use of cultural concepts and their
meaning.
The data were kept confidential at all times, and only the researcher had access to the raw
data. The raw data will be kept for a year after the PhD examination process and then will be
destroyed. The coded data on SPSS file format is stored on a password-protected work
computer and a home computer, which is also protected by a personal password, updated
regularly. It will be kept for 10 years from the date of publication of the thesis. The file will
be deleted after this time.

This chapter provided an overview of the research strategy adopted for this study. It also
explained the rationale for determining the unit of the study and the sampling process
employed to collect data from the NPSSOs. The chapter also discussed the questionnaire used
to survey the organisations and the process used to collect and analyse the data. The chapter
concluded with an explanation of the axiological and ethical issues considered and how they
were addressed in the research process. The next chapter, Results, presents the results of the
analysis of primary data collected through the survey among NPSSOs in New Zealand. The
analysis is performed according to the variables measured in this study.

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CHAPTER 5: RESULTS

The overall purpose of this study is to develop an understanding of how the NPSSOs in
Aotearoa New Zealand manage their board, service delivery, human resources and finance.
The previous chapter (Chapter 4: Research Methodology) explained the overall research
strategy and specific procedures used in this study to select the population and sample, the
instrument and method used to collect data on the management of NPOs, and the profile of
the NPOs that participated. This chapter discusses the results of this quantitative enquiry and
summarises the findings. The chapter starts with a summary of the general characteristics of
the NPOs that participated in the study, such as age, income, staffing and volunteers. This is
followed with a summary of the results related to the management of the board, service
delivery, human resources and finance, along with the statistical analyses on the difference
between Māori and non-Māori NPOs. The chapter then discusses the results of the statistical
testing on the relationship between the management variables and the difference between
Māori and non-Māori NPOs. Finally, the results related to how NPOs are maintaining their
commitment to te Tiriti o Waitangi are discussed. A summary of key findings is provided at
the end of this chapter.
The descriptive and correlational nature of these research questions required the use of both
descriptive and inferential statistics to find the answers. This chapter uses descriptive statistics
such as frequencies, measures of central tendency and dispersion to describe the data. In
addition, inferential statistics such as Pearson’s correlation and Spearman’s correlation were
used to explain the relationship between key variables, and independent samples t-tests,
Mann–Whitney U tests, chi-square tests, ANOVA and Kruskal–Wallis tests were used to
explain the differences between groups (Field, 2013; Pallant, 2011). An alpha level of .05 was
139
used for all statistical analyses. The descriptive statistics are explained mainly with tables and
figures, with some text. The inferential statistics are explained in the text.
5.2 General Characteristics of Organisations

Sixty-five (N) NPOs from 10 regions in Aotearoa New Zealand participated in this study. Of
the 65 organisations, 22 (33.8%) identified as Māori/iwi social service organisations
providing services mainly to the indigenous Māori population. They were either individual-
iwi-based social services or pan-Māori organisations serving all Māori. However, only five
organisations were registered under the Māori Trust Board Act 1955. While the majority of
the Māori organisations (83.36%) offered services only to Māori, the other Māori
organisations provided services to people of any ethnic culture. While some specific services
assisted particular cultural groups, such as Pacific (n = 5), Asian (n = 2) and refugees (n = 1),
the other non-Māori organisations (n = 38) that participated in this study offered social
services to people of any culture, including Māori.
5.2.1 Age, Income, Staffing and Volunteers

To be included in the study, the NPOs had to meet three inclusion criteria in terms of their
age, income and staffing. They needed to have an operating age of at least three years as on
31 March 2010, an annual income between $NZ300,000 and $NZ1 million; and staffing of
least three FTEs respectively. As displayed in Table 5.1, 29.2% of NPOs were less than 10
years old, and the remaining were aged between 10 and 30 years. Figure 5.1 shows the
percentage of NPOs in different income categories. More than half of the NPOs (58.5%) had
an annual income between $300,000 and 500,000, and nearly 16.9% had an annual income
between $700,001 and $1 million.

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Table 5-1. Year of establishment

Year of establishment Frequency Per cent
Before 1980 7 10.8
Between 1980 and 1990 15 23.1
Between 1991 and 2000 24 36.9
Between 2001 and 2010 19 29.2
Total 65 100.0
Figure 5.1. Annual income: Percentage of organisations ($NZ)
16.9
300,000-500,000
500,001-700,000
24.6 58.5 700,001-1 million
In terms of staffing, the number of full-time staff (employees who regularly work more than
30 hours per week) employed by the NPOs varied from one to 15 (Mode = 4). A majority of
the organisations (63.1%) had full-time staff of between one and five, and only 9.2% of NPOs
had more than 10 full-time staff; the remaining NPOs (27.7%) had full-time staff between six
and 10. Similarly, the part-time staff (employees who regularly work less than 30 hours per
week) employed by the NPOs also varied from zero to 23 (Mode = 3). The majority of the
NPOs (83.1%) had part-time staff of between one and five and only 3% had more than 15
part-time staff. When the FTEs were calculated for staff, they ranged from 3.5 FTEs to 22.5
FTEs (M = 7.95, SD = 4.34). More than half of the NPOs (52.3%) had FTEs between 5.5 and
10 and more than a quarter (26.2%) had FTEs of between three and five. There was a
significant difference in the male and female staff ratio in NPOs: the number of male staff
141
ranged from zero to six (Mode = 0) and the number of female staff from two to 27
(Mode = 6). While more than a quarter of the NPOs (27.7%) did not employ any male staff
and more than half of the NPOs (55.4%) did not employ more than two male staff, more than
half of the NPOs (52.3%) employed six to 10 females. Most of the male staff worked in the
fields of health and disability, followed by community development and mental health. Table
5-2. Gender distribution of staff in NPOs shows the distribution of the number and percentage
of male and female staff.
Table 5-2. Gender distribution of staff in NPOs

Variable (N = 65) n %
Number of male staff
0 18 27.7
1 to 2 36 55.4
3 to 5 8 12.3
Above 5 3 4.6
Number of female staff
1 to 5 20 30.8
6 to 10 34 52.3
11 to 15 5 7.7
16 to 20 2 3.1
21 to 25 3 4.6
Above 25 1 1.5
In addition to the paid staff, NPOs rely on volunteers to run their operations. The number of
full-time volunteers in the New Zealand NPOs ranged from zero to 100 (Mode = 0) and the
number of part-time volunteers ranged from zero to 200 (Mode = 5). While the majority of
the organisations (73.8%) did not have any full-time volunteers (more than 30 hours a week),
most of them (83.1%) had one to 10 part-time volunteers. The FTEs for volunteers were also
calculated, and they ranged from zero to 200 (M = 10.98, SD = 27.97). Similarly to the gender
difference in staffing, there were more female volunteers than male volunteers contributing to
the functioning of NPOs. Table 5-3. Volunteering characteristics shows the volunteering
characteristics.
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Table 5-3. Volunteering characteristics

Volunteer FTE*
1 to 5 29 44.6
5.5 to 10 21 32.3
10.5 to 15 3 4.6
20.5 to 25 1 1.5
25.5 to 50 2 3.1
Above 50 6 9.2
Number of female volunteers*
1 to 5 18 27.7
6 to 10 12 18.5
11 to 15 13 20.0
16 to 20 4 6.2
21 to 25 1 1.5
Above 25 7 10.8
Number of male volunteers*
0 24 36.9
1 to 5 24 36.9
6 to 10 3 4.6
11 to 15 1 1.5
16 to 20 2 3.1
Above 20 1 1.5
*Some categories of data contain missing data (did not answer or not applicable) and the total percentage may not add up to
100%.
5.3 Board Management

All the NPOs (N = 65) that participated in the study confirmed that they had a formal
governing structure in the form of a board, as dictated by their bylaws/constitution, and 62
NPOs revealed the size of their boards as ranging from five to 40 (Mode = 8). There was a
significant gender difference in the composition of the boards similar to that of the paid staff
and volunteers. While 20% of the NPOs did not have any males on their board, nearly half of
the NPOs (47.7%) had between six and 10 female board members. While the number of the
males on boards ranged between zero and eight, the female number ranged between two and
40. This clearly showed that more women (Mode = 5) participated on the boards than men
(Mode = 0). Table 5-4. Number and percentage of males and females on board shows the
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number of males and females on the boards and also the frequency of board meetings. A
small percentage (16.9%) confirmed that they gave a remuneration to their board members,
with only seven NPOs declared the amount ranged from $500 to $6,000 a year. Over half of
the organisations (n = 36, 55.4%) reported that they had subcommittees on their board and the
most common subcommittee was a finance committee (44.6%), indicating the importance
boards give to finance management.
Table 5-4. Number and percentage of males and females on board and Board meeting
frequency
Number of males on the board*
0 13 20.0
1 to 3 26 40.0
4 to 6 19 29.2
7 to 10 3 4.6
Number of females on the board*
1 to 5 28 43.1
6 to 10 31 47.7
11 to 15 1 1.5
More than 15 1 1.5
Board meeting frequency
Every month 33 50.8
Once every two months 22 33.8
Once every three months 7 10.8
Once every six months 3 4.6
100%
In terms of board meetings, half of the NPO boards (50.8%) met every month, and only a
small percentage (4.6%) had a longer duration of six months between board meetings. The
others met either once every two months (33.8%) or once every three months (10.8%). More
than half of the boards always (52.3%) met without their staff members, including the CEO
(also commonly known as the manager) of the organisations, keeping the functions of
governance and operations separate. However, in a small percentage of organisations (16.9%),
the CEO was a member of the board, and in two of these organisations they acted as the
chairperson of the board. Three organisations also confirmed that their staff had rights to vote
144
on the board because they had a staff representative on the board. This shows that there was
an overlap between governance and operations in a small number of the NPOs. While the
finances of most of the organisations (84.6%) were subject to independent audits, the majority
of these organisations’ boards (54.5%) did not meet with their auditor to discuss the audit
findings. However, more than half of the NPOs studied (55.4%) confirmed that they
conducted an annual self-assessment of their board functioning. While this was positive,
44.6% still did not conduct any self-review of their functioning, which could be regarded as a
risk to their functioning.
Most of the NPOs that participated in this study had a vision statement (87.7%) and a mission
statement (86.2%). Most of them also had written goals (73.8%) and organisational values
(75.4%). More than 90% of the NPOs also engaged in a strategic planning exercise, reviewing
their vision, mission, goals and values. The frequency of these strategy-building exercises
varied among the NPOs: 27.5% of NPOs engaged in this process every year and 33.8%
engaged with the strategies every two years, demonstrating a need to review their vision,
mission and goals within a short period. Out of the 60 organisations engaged in regular
strategic planning processes, only 70% kept a written strategy document that was accessible
to all the stakeholders. When asked about whether the governing board provided clear written
expectations and reasonable compensation when they appointed a CEO/manager for their
organisation to operationalise the organisational strategies, 93.8% confirmed “yes”, indicating
that CEOs/managers were being appointed with clear expectations from the board as the
employer.
To understand how the NPOs managed their board, a three-point (always, sometimes or
never) board management practices rating scale consisting of 30 items was used to measure
the extent to which they followed the management practices. Figures 5.2 to 5.5 show the
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percentage of NPOs and the extent to which they followed the practices of board
management. These figures show that there was a considerable variation among the NPOs in
the extent to which they followed the board management practices.
Figure 5.2. Percentage of NPOs following board management practices I
100%.
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Figure 5.3. Percentage of NPOs following board management practices II
The board maintains a code of ethics and

67.7 15.4 16.9
conduct and follows them when necessary
All the board members receive regular ongoing

training and information about developments in 23.1 44.6 32.3
the non-profit sector
All the board members are aware of their roles

and responsibilities and carry out their duties 44.6 36.9 18.5
according to the board operations manual
Management practices
All the new board members go through an

orientation process to learn about organisational
35.4 46.2 18.5
vision, mission, values, goals, bylaws, policies
and services
The board's nomination process ensures that the

board remains appropriately diverse and non-
discriminatory reflecting the community and 30.8 35.4 33.8
service users with respect to gender, ethnicity,
culture, economic status, age, disabilities and…
The board follows its rules and regulations when

it appoints and terminates members from the 66.2 27.7 4.6
board*
The board ensures that it has at least the

minimum number of members as required by 38.5 44.6 16.9
their bylaws or the law
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs
Always Sometimes Never
* Some categories of data contain missing data (did not answer or not applicable) and the total percentage may not add up to
100%.
147
Figure 5.4. Percentage of NPOs following board management practices III
The board follows a formal process of communication

70.8 16.9 12.3
between the board and the operations
The board ensures that it reviews the risk at regular

intervals and organisation has adequate insurance
70.8 13.8 15.4
policies to cover loss, damage to people, equipment,
and buildings.
The board maintains and strictly follows a policy of

prohibiting employees and members of their immediate 38.5 18.5 41.5
families from serving as board chair or treasurer*
Management Practices
The board maintains a conflict of interest policy and

52.3 30.8 16.9
make sure that its members comply with the policy
The board handles urgent matters between its meetings

55.4 40 4.6
as they arise
The board members receive agendas and materials

relating to significant decisions in advance of their 60 29.2 10.8
board meeting
The board follows their attendance policy strictly when

86.2 10.81.5
it makes policy decisions*
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs
100%.
148
Figure 5.5. Percentage of NPOs following board management practices IV
The board communicates the organisational

strategies/annual plans to all stakeholders: service
recipients, board, staff, volunteers, funding partners, and the 33.8 27.7 36.9
general community*
The board ensures that through work plans, human and

financial resources are allocated to ensure the 36.9 38.5 23.1
accomplishment of the goals in a timely fashion*
The strategies/annual plans establish an evaluation process

and performance indicators to measure the progress toward 41.5 30.8 26.2
the achievement of goals and objectives*
The board with the assistance of staff converts the

organisational strategies to achievable annual plans till the 29.2 33.8 36.9
next round of strategic planning process
The board ensures that, by soliciting community input, its

mission and activities remain valid and provide benefit to the 47.7 24.6 26.2
community in a culturally competent manner*
The board ensures that the goals of the organisation clearly

communicate the organisation's purpose and services to 30.8 24.6 44.6
meet community needs.
The board ensures that the organisational mission statement

provides a time frame and clear strategies to achieve the 30.8 30.8 36.9
vision*
The board ensures that the organisational vision remains

current and reflects the desired state of the change agreed 13.8 30.8 55.4
by all members of the board
The board plans and develops the organisational strategies

by consulting the staff on matching the external environment 49.2 23.1 27.7
and the internal competencies
The board forms or reviews the organisational strategies by

reviewing its mission and vision based on a detailed analysis 40 30.8 29.2
of external environment
0% 10%20%30%40%50%60%70%80%90%100%
Percentage of NPOs
Always Some times Never
100%.
149
To understand the level of board management and the associated organisational risk in board
management, a total board management score was calculated for each NPO by summating its
rating of the extent to which it follows (always = 4, sometimes = 2 or never = 0) the board
management practices in the board management rating scale. An associated risk level was
then gauged based on the management practice level and associated risk matrix used in this
study. Table 5-5. Board management practice and risk level matrix shows the number and
percentage of NPOs in each management practice level and corresponding risk level. More
than half of the NPOs (55.4%) demonstrated a borderline board management and were at
medium risk, and 16.9% of NPOs demonstrated poor board management and were at high
risk. There was only one organisation that was not at risk, as they excelled in their board
management. On average, the NPOs demonstrated borderline board management and were at
medium risk (M = 75.33, SD = 17.78, Median = 74). This shows that the majority of the
NPOs needed to improve their board management.
Table 5-5. Board management practice and risk level matrix

Practice and risk level Frequency Per cent Valid per cent
Poor–high risk 11 16.9 18.3
Borderline–medium risk 36 55.4 60.0
Good–low risk 12 18.5 20.0
Excellent–no risk 1 1.5 1.7
Total 60 92.3 100.0
Missing* 5 7.7
Total 65 100.0
*Total scale score was not calculated for some organisations due to their not answering one or more items on the scale, which
were considered missing values.
A one-way between-groups ANOVA was conducted to explore the difference between NPOs
based on their age in the management of the board (as measured by the board management
rating scale). The organisations were divided into four age groups according to their year of
establishment (Group 1: Before 1980; Group 2: Between 1981 and 1990; Group 3: Between
1991 and 2000; Group 4: Between 2001 and 2010). There was no statistically significant
150
difference at the p = < .05 level in the management of governance between the four age
groups: F (3, 56) = .251, p = .860, eta squared = .01. This shows that the organisational age
did not have any influence on the board management.
5.4 Service Delivery Management

Effective NPOs plan and develop their operational activities every year in a way that directly
meets the organisation’s vision, mission and goals and values. They also effectively deliver
appropriate and well-run services and programmes for the community and ensure their quality
by regular monitoring and evaluation. All the organisations (N = 65) that participated in this
study confirmed that they conducted annual service delivery planning to operationalise their
strategies. However, not all of them (n = 15) prepared a service delivery plan document that
identified various programmes and the resources needed to run these programmes. Moreover,
almost a quarter (24.6%) did not prepare an annual report that reflected the achievements and
failures congruent with their annual plan. However, most of the organisations that prepared
the annual report also published it for the community (91.7%), thus showing a great level of
accountability to the various stakeholders. Regarding assessing organisational risk as part of
their annual service delivery planning, 38.5% (n = 25) of the NPOs responded that they did
not conduct any risk assessment. Table 5-6 shows the areas of risk assessment undertaken by
the NPOs in their service delivery planning.
Table 5-6. Service delivery risk assessment characteristics

Areas of risk assessment (N = 40) n %
Areas of risk assessment* ^
Income 33 82.5
Staffing 27 67.5
Legislation and government policy 24 80.0
Organisational assets 21 52.5
Natural disasters 19 47.5
Fraud 14 35.5
100%.
^ The percentage values are only calculated for organisations (n = 40) that confirmed that they conduct a risk assessment.
151
When asked about keeping service users’ personal information, 86.2% of NPOs confirmed
that they had secure information systems in accordance with the Privacy Act 1993, and 97%
had secure IT facilities with regular backup systems.
To understand how the NPOs manage their service delivery, a three-point (always, sometimes
or never) service delivery management practices rating scale consisting of 12 items was used
to measure the extent to which they follow the management practices. Figures 5.6 and 5.7
display the percentage of NPOs and the extent to which they followed the practices of service
delivery management.
Figure 5.6. Percentage of NPOs following service delivery management practices I
The organisation carefully considers issues related to culture in

33.8 35.4 30.8
its service delivery planning
Clients and potential clients have the opportunity to

36.9 27.7 33.8
participate in service delivery planning*
The annual service delivery planning clearly identifies the

human and financial resources required to deliver the services 46.2 36.9 15.4
to meet organisational goals*
The organisation uses national and international research to

keep up-to-date with the latest developments in their field of 23.1 30.8 46.2
practice to inform its service delivery planning
The annual service delivery planning begins with the review of

the last year’s performance and finishes with the plan for the 60 21.5 16.9
next year*
The service delivery planning is conducted by the staff under

the guidance of the executive director/manager in accordance 38.5 36.9 24.6
with organisation’s vision, mission, goals, and values
0% 20% 40% 60% 80% 100%

Percentage of NPOs
100%.
152
Figure 5.7. Percentage of NPOs following service delivery management practices II
The organisation evaluates each programme/service

to establish its outcome and impact and to comply 44.6 40 15.4
with all internal and external reporting requirements
The organisation conducts periodic monitoring of

each programme/service to ensure its effectiveness
40 35.4 23.1
and efficiency including service user satisfaction
surveys*
The organisation provides necessary training for the

49.2 26.2 24.6
staff to implement new programmes and services.
The planning gives adequate attention to matching

the work to be done and the competency to do the 43.1 33.8 21.5
work in terms of staff training and capacity building*
The organisation develops a service delivery plan with

time frame for each of its programmes/services to 47.7 29.2 21.5
track its progress*
The service delivery planning predicts output,

outcome, impact, efficiency, and quality assurance
40 29.2 29.2
for each service and develops performance measures
to verify them *
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs
100%.
To understand the level of service delivery management and the associated organisational risk
in service delivery management, a total service delivery management score was calculated for
each NPO by summating its rating of the extent to which it follows (always = 4, sometimes =
2 or never = 0) the service delivery management practices in the service delivery management
rating scale. An associated risk level was then gauged based on the management practice level
and associated risk matrix used in this study. Table 5-7. Service delivery management:
Practice and risk level matrix shows the number and percentage of NPOs in each management
153
practice level and corresponding risk level. The table shows that more than a quarter of NPOs
(36.9%) demonstrated poor service delivery management and were at high risk, and 33.8%
demonstrated borderline management and were at medium risk when it came to their service
delivery management. There were only five organisations (7.7%) that were not at risk, as they
excelled in their service delivery management. On average, the NPOs demonstrated
borderline service delivery management and were at medium risk (M = 27.63, SD = 11.63,
Median = 28). This shows that the NPOs needed to improve their service delivery
management.
Table 5-7. Service delivery management: Practice and risk level matrix
Total 60 92.3 100.0
Missing* 5 7.7
Total 65 100.0
A one-way between-groups ANOVA was conducted to explore the difference between NPOs
based on their age on the management of service delivery (as measured by the service
delivery management rating scale). The organisations were divided into four age groups
according to their year of establishment (Group 1: Before 1980; Group 2: Between 1981 and
1990; Group 3: Between 1991 and 2000; Group 4: Between 2001 and 2010). There was no
statistically significant difference at the p = < .05 level in service delivery management
between the four age groups: F (3, 56) = .563, p = .641, eta squared = .03. This shows that the
organisational age did not have any influence on board management.

154
5.5 Human Resource Management

When asked about the organisation’s process on managing the human resources, the majority
of the organisations (81.5%) confirmed that they had a written human resources
handbook/policy manual that was regularly reviewed and updated and described the
recruitment, induction, work rules and termination processes. Additionally, more than half of
the NPOs (69.2%) had clearly articulated policies to maintain compliance with government
regulations, such as the Holidays Act 2003, the Employment Relations Act 2000, paid
parental leave entitlements, and health and safety regulations. Most of the organisations
(83.1%) also confirmed that they had a clearly articulated equal opportunity employment
policy they followed when recruiting staff members. For a small number of organisations
(38.5%), a qualified human resources professional guided their human resource management
process. The majority of the NPOs (84.6%) also offered flexible work arrangement options to
their employees. The NPOs used a variety of media to advertise their positions and often used
more than one way to reach potential applicants to make sure that they recruited appropriate
people.
Table 5-8. Job advertisement process

Job advertisement medium (N = 65) n %*
Print & electronic media 50 76.9
Website 48 73.8
Newsletters 20 9.3
Professional associations 40 61.5
Word of mouth 27 41.5
Internal advertisement 29 13.6
*This is a multiple response item, so the total percentage will not add up to 100%.
155
shows the number and the percentage of NPOs using various strategies to advertise their jobs.
Table 5-8. Job advertisement process

Job advertisement medium (N = 65) n %*
Print & electronic media 50 76.9
Website 48 73.8
Newsletters 20 9.3
Professional associations 40 61.5
Word of mouth 27 41.5
Internal advertisement 29 13.6
*This is a multiple response item, so the total percentage will not add up to 100%.
156
When Māori organisations (n = 22) were asked about whether they employed people from
other ethnic groups, most of them (n = 17, 77.2%) confirmed that they employed non-Māori
workers if they had an understanding of tikanga Māori and te reo Māori (Māori language).
To understand how the NPOs manage their human resources, a three-point (always,
sometimes or never) human resource management rating scale consisting of 28 items was
used to measure the extent to which they follow the management practices. The scale had 16
statements of practices related to staff management and 12 statements of practices related to
volunteer management. Figures 5.8 and 5.9 display the percentage of NPOs and the extent to
which they followed the practices of staff management. These figures show that there is a
huge variation among NPOs on the extent to which they follow the staff management
practices.
157
Figure 5.8. Percent of NPOs following staff management practices I
The organisation follows a systematic and fair method

for the assignment of new or existing staff to specific 56.9 30.8 12.3
jobs to protect their workload
The organisation ensures that all the board members

and staff have access to the written personnel policy 32.3 36.9 29.2
and they follow the policies*
The organisation provides an induction programme

for all the new staff in terms of its vision, mission, 43.1 38.5 18.5
values, policies, and procedures
The organisation offers a competitive remuneration

plan to all employees in accordance with their

41.5 46.2 12.3
qualifications and experience and conducts a periodic
review of salary ranges and benefits
The organisation provides clear job descriptions that

provide details such as qualifications, responsibilities,
61.5 26.2 12.3
reporting relationships, performance indicators and
review when it recruits staff members
The organisation recruits staff through a competitive

recruitment process developed and guided by human 44.6 23.1 32.3
resource professional
The organisation follows non-discriminatory hiring

78.5 21.5 0
practices
The organisation fills the vacant positions in a timely

manner to prevent interruptions to services delivery 49.2 40 10.8
and ensure fair workload
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs
100%.
158
Figure 5.9. Number of NPOs following staff management practices II
Individual employees are acknowledged and rewarded for

their outstanding contribution to the organisation’s 13.8 30.8 55.4
activities
The chief executive officer/manager or their delegated

authority conducts and documents employee performance 53.8 29.2 16.9
appraisals of all the staff annually
The organisation follows a clear and fair policy and process

61.5 23.1 15.4
for managing all the workplace conflicts and complaints
The organisation maintains contemporaneous records

41.5 36.9 16.9
documenting staff time in programme allocations*
The organisation supports all the professional employees

such as social workers to obtain necessary registration and 64.6 26.2 6.2
maintain their annual practising certificates*
The organisation supports all the professional employees

such as social workers and counsellors to become 56.9 29.2 10.8
members of their respective professional bodies*
The organisation supports and provides opportunities for

44.6 44.6 10.8
meeting employees' professional development needs
The CEO/manager carefully reviews and responds to ideas,

suggestions, comments, and perceptions from all staff 49.2 41.5 9.2
members
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs
100%.
To understand the level of staff management and the associated organisational risk in staff
management, a total staff management score was calculated for each NPO by summating its
rating of the extent to which it follows (always = 4, sometimes = 2 or never = 0) the staff
management practices in the human resource management rating scale. An associated risk
159
level was then gauged based on the management practice level and associated risk matrix
used in this study. Table 5-9. Frequency and percentage of NPOs: Staff management practice
and risk level shows the number and percentage of NPOs in each management practice level
and corresponding risk level. The table shows that more than half of NPOs (58.5%)
demonstrated a borderline staff management and were at medium risk, and 21.5% of NPOs
demonstrated good staff management and were at low risk. Only 4.6% of NPOs were at no
risk, as they excelled in their staff management. On average, the NPOs demonstrated
borderline staff management and were at medium risk (M = 43.48, SD = 8.69, Median = 42).
This shows that the majority of the NPOs needed to improve their capacity in staff
management.
Table 5-9. Frequency and percentage of NPOs: Staff management practice and risk level
Total 61 93.8 100.0
Missing* 4 6.2
Total 65 100.0
Figures 5.10 and 5.11 display the percentage of NPOs and the extent to which they followed
the practices of volunteer management. These figures show that there was considerable
variation in how the NPOs managed their volunteers.

160
Figure 5.10. Percentage of NPOs following volunteer management practices I
The organisation is respectful of the volunteer's abilities

and time commitment and has various job duties to makes
43.1 24.6 27.7
sure that jobs are not given to volunteers simply because
the jobs are considered inferior for paid staff*
The organisation provides appropriate training and

orientation to the agency to assist the volunteer in the
26.2 33.8 36.9
performance of their volunteer activities and offers
training with staff in such areas as cultural sensitivity*
The organisation follows a volunteer recruitment policy

that does not discriminate, but respects, encourages, and 60 20 15.4

represents the diversity of the community*
The organisation actively recruits volunteers according to a

43.1 27.7 24.6
well-defined volunteer management plan*
The organisation provides well-explained job descriptions

27.7 20 47.7
for all volunteer positions in the organisation*
The organisation defines a clear purpose for all the

35.4 32.3 27.7
volunteer jobs in volunteers within the organisation*
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs
100%
161
Figure 5.11. Percentage of NPOs following volunteer management practices II
Financial records are maintained for the volunteer time

9.2 12.3 75.4
spent on programs and recorded as in-kind contributions*
The organisation maintains contemporaneous records

18.5 15.4 63.1
documenting volunteer time in program allocations*
The organisation provides opportunities for program

23.1 27.7 44.6
participants to volunteer*
The organisation proactively responds to the ideas,

18.5 18.5 60
suggestions and comments from volunteers*
The organisation does some type of volunteer recognition

or commendation periodically, and staffs continuously
23.1 29.2 44.6
demonstrates their appreciation towards the volunteers
and their efforts *
The organisation periodically evaluates each volunteer’s

engagement with the organisation to understand the 13.8 24.6 56.9
strengths and weaknesses of its volunteer programme*
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs
100%.
To understand the level of volunteer management and the associated organisational risk in
volunteer management, a total volunteer management score was calculated for each NPO by
summating its rating of the extent to which it follows (always = 4, sometimes = 2 or never =
0) the volunteer management practices in the human resource management rating scale. An
associated risk level was then gauged based on the management practice level and associated
risk matrix used in this study. Table 5-10. Frequency and percentage of NPOs: Volunteer
162
management practice and risk level shows the number and percentage of NPOs in each
management practice level and corresponding risk level. The table shows that the majority of
NPOs (70.8%) demonstrated poor volunteer management and were at high risk, and only a
small percentage of NPOs (7.7%) were at low risk, as they demonstrated excellent
management of volunteers. On average, the NPOs demonstrated poor volunteer management
and were at high risk (M = 20.32, SD = 10.62, Median = 18). This shows that the NPOs
needed to improve their management of volunteers.
Table 5-10. Frequency and percentage of NPOs: Volunteer management practice and risk
level
Total 62 95.4 100.0
Missing * 3 4.6
Total 65 100.0
100%.
To understand the level of the overall human resource management and the associated
organisational risk in human resource management, a total human resource management score
was calculated for each NPO by combining the staff management and volunteer management
rating subscales. An associated risk level was then gauged based on the management practice
level and associated risk matrix used in this study. Table 5-11. Human resource management:
Practice level and risk level matrix shows the number and percentage of NPOs in each
management practice level and corresponding risk level. The table shows that nearly half of
the NPOs (47.7%) demonstrated borderline human resource management overall, and were at
medium risk, and only a small percentage of NPOs (6.2%) were at low risk, as they were able
to demonstrate excellent human resource management including staff and volunteers. On

163
average, the NPOs demonstrated borderline human resource management and were at
medium risk (M = 63.93, SD = 16.42, Median = 62). This shows that the majority of the
NPOs needed to improve their management of human resources.
Table 5-11. Human resource management: Practice level and risk level matrix
Total 60 92.3 100.0
Missing* 5 7.7
Total 65 100.0
*Total scale score was not calculated for some organisations due to not answering one or more item on the scale and were
considered missing values.
A Kruskal–Wallis test was conducted to see whether organisational age had any influence on
the human resource management. The test revealed a statistically significant difference in
human resource management across the four organisational age groups (Group 1, established
before 1980, n = 6; Group 2, established between 1981 and 1990, n = 13; Group 3, established
between 1991 and 2000, n = 23; Group 4, established between 2001 and 2010, n = 18), x2(3,
N = 60) = 12.20, p = .007. The older age group (established before 1980) recorded a higher
median score (Md = 85) than the other two middle age groups, which both recorded median
values of 60, and the younger group (established between 2001 and 2010) recorded the
smaller median score (Md = 56). A Mann–Whitney U test was conducted on the pair of group
1 (n = 6) and group 4 (n = 18) and using a Bonferroni correction (as recommended by Field,
2013, requiring a p-value of less than .05 for results to be significant) showed that there was a
significant difference in human resource management between the oldest group (Md = 85)
and the youngest group (Md = 56) U = 3.50, z = −3.38, p = .001, r = .69. This indicates that
the older the organisation was, the better their management of human resources.
164
5.6 Financial Management

While all the organisations (N = 65) prepared an annual budget for every financial year, a
small number of organisations (n = 8) were not able to specify the sources of funding in their
budget, making it hard for them to make sound financial decisions. Only a small percentage
of organisations (6.2%) used professional fundraisers for generating income, and other NPOs
relied on their staff and board to generate the funds for their operations. Table 5-12. Number
and percentage of NPOs: Sources of income shows the number and percentage of NPOs that
declared their source of income percentage wise. A majority of the organisations (64.6%)
relied heavily on government contracts because more than 75% of their income came from
government contracts. For a small number of these organisations (n = 7), 100% of their
income was from government contracts. While many of them worked in close collaboration
with various government departments due to their funding relationship, some of them (40%)
felt that accepting government contracts compromised their organisational vision and mission.
Table 5-12. Number and percentage of NPOs: Sources of income

Income sources n %
(N = 65%)
Government contracts
100% 7 10.8
75–99% 35 53.8
51–75% 17 26.2
26–50% 2 3.1
0–25% 4 6.2
Government grant*
51–75% 1 1.5
26–50% 1 1.5
0–25%
Private grants*
0–25% 62 95.4
26–50% 2 1.5
Fees for services*
0–25% 64 98.5
Membership fees*
0–25% 64 98.5
165
Street appeal*
0–25% 64 98.5
Investment income*
0–25% 63 96.9
100%.
When asked about whether the NPOs had an office administrator to manage the day-to-day
financial affairs of the organisation, 73.8% confirmed that they had this position. The majority
of them (87.7%) also used the services of a professional accountant for their financial
management. For the more than a quarter of the organisations (29.2%) that owned their
offices and the more than half of the organisations (55.4%) that owned vehicles, there were
additional costs that needed to be met. To keep the expenses manageable, 76.9% of the
organisations developed and followed a policy on purchase and use of utilities such as
stationary, telephone, internet and power. While just over a half the NPOs (55.4%) had an
investment policy, 72.3% had plans to mitigate the loss of funding.
To understand how the NPOs managed their finance, a three-point (always, sometimes or
never) financial management rating scale consisting of 20 items was used to measure the
extent to which they followed the financial management practices. The scale included
practices related to the planning, budgeting, fundraising, accounting, controlling and
compliance. Figures 5.12 to 5.14 display the percentage of NPOs and the extent to which they
followed the practices of financial management. These figures show that there was
considerable variation among the NPOs in how they managed their finances.
166
Figure 5.12. Percentage of NPOs following financial management practices I
The CEO/manager prepares monthly/quarterly cash

63.1 26.2 10.8
flow projections and communicates this to the board
The organisation ensures that funds are raised in an

ethical manner consistent with the organisation’s 50.8 27.7 21.5
values and goals
The organisation allocates specific roles for board and

58.5 20 21.5
staff members in fund raising
The final annual budget clearly identifies the income,

various expenditures and overheads approved by the 56.9 32.3 10.8
board
The CEO/Manager consults all the staff to prepare

budget to make sure that the budget meets service 30.8 40 29.2
delivery plan requirements
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs

167
Figure 5.13. Percentage of NPOs following financial management practices II
The organisation ensures that staff and board

members dealing with financial matters receiving 50.8 24.6 24.6
appropriate training
The organisation renegotiates its contracts for

services regularly (and before the contract expiry
50.8 32.3 16.9
date) to reflect current costs and service needs
identified in the community
The organisation demonstrates its accountability by

sharing its financial information with the 35.4 44.6 18.5
community and the regulatory bodies *
The organisation remains accountable to funders

by providing financial statements as per the 67.7 26.2 6.2
funding agreements
The organisation periodically forecasts year end

revenues and expenses to assist in making sound 50.8 26.2 21.5
financial decisions during the year*
The organisation ensures that it has adequate

insurance coverage to minimise organisational risk 58.5 35.4 6.2
and liabilities
The organisation controls all the items owned by a

75.4 15.4 9.2
fixed assets register for reducing loss and risk
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs
100%.
168
Figure 5.14. Percentage of NPOs following financial management practices II
The organisation ensures that statutory deductions

(payroll taxes, superannuation contributions, etc.) are
64.6 26.2 9.2
properly made and paid on time to comply with its tax
obligations
The organisation ensures that bank reconciliations are

56.9 24.6 18.5
checked by someone who did not prepare them
The organisation ensures that the expenses are

properly authorised and approved by a designated 67.7 16.9 15.4
person before payment is made
The organisation keeps track of amounts owed to

others (e.g., suppliers) and owed by others (e.g., staff, 61.5 24.6 12.3
contracts payments )*
The CEO/manager checks the cash book every month

and confirms that the transactions are coded as per 72.3 16.9 10.8
the cost centres
The organisation ensures that entries in the cash

69.2 18.5 10.8
books are cross referenced to a supporting evidence*
The organisation records the details (date,

description, amount, etc.) of its transactions
84.6 12.3 3.1
(payments and receipts) in cash books according to
the standard chart of accounts
The organisation follows accounting practices that

47.7 41.5 10.8
conform to accepted standards
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Percentage of NPOs
100%.
To understand the level of financial management and the associated organisational risk in
finance management, a total financial management score was calculated for each NPO by
summating its rating of the extent to which it follows (always = 4, sometimes = 2 or never =
0) the financial management practices in the financial management rating scale. An associated
169
risk level was then gauged based on the management practice level and associated risk matrix
used in this study. Table 5-13. Frequency and percentage of NPOs: Finance management
practice and risk level shows the number and percentage of NPOs in each management
practice level and corresponding risk level. The table shows that a large number of NPOs
were able to demonstrate (44.5%) good financial management and low risk and only a small
percentage of NPOs (15.4%) were at high risk, as they demonstrated poor financial
management. On average, the NPOs demonstrated borderline finance management and were
at medium risk (M = 57.06, SD = 17.67, Median = 62). This shows that the majority of the
NPOs needed to improve their management of finance.
Table 5-13. Frequency and percentage of NPOs: Finance management practice and risk level
Borderline–Medium risk 17 26.2 27.4
Total 62 95.4 100.0
Missing* 3 4.6
Total 65 100.0
*Total scale score was not calculated for some organisations due to their not answering one or more item on the scale, which
A Kruskal–Wallis test was conducted to check whether the organisational age had any
influence on financial management. The test revealed a statistically significant difference in
financial management across the four organisational age groups (Group 1, established before
1980, n = 7; Group 2, established between 1981 and 1990, n = 14; Group 3, established
between 1991 and 2000, n = 24; Group 4, established between 2001 and 2010, n = 17 ), x2 (3,
N = 62) = 11.45, p = .010. The older age group (established before 1980) recorded a higher
median score (Md = 72) than the other two middle age groups, which recorded median values
of 68 (established between 1981 and 1990) and 63 (established between 1991 and 2000), and
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the younger group (established between 2001 and 2010) recorded the smaller median score
(Md = 58). A Mann–Whitney U test was conducted on the pair of group 1 (n = 7) and group 4
(n = 17) and using a Bonferroni correction (as recommended by Field , 2013, 2009) requiring
a p-value of less than .05 for results to be significant showed that there was a significant
difference in finance management between the oldest group (Md = 72) and youngest group
(Md = 58) U = 15, z = −2.83, p = .005, r = .58. This shows that the older the organisation was,
the better their management of finance.
To understand the influence of organisational income on the management of finance, a
Kruskal–Wallis test was conducted, as the variable did not meet the assumption of normal
distribution. The Kruskal–Wallis test revealed no significant difference between the three
organisational income groups (Group 1, $300,000–$500,000, n = 38; Group 2, $500,001–
$700,000, n = 16; Group 3, $700,001–$1 million, n = 11) in the management of finance, x2
(2, n = 62) = .428, p = .807. This means the finance management of NPOs did not differ with
their level of annual income.
5.7 Overall Management Practice Level and Risk

In addition to assessing the management practices and risk levels separately for each of the
management practice areas of the board, service delivery, human resources and finance, an
overall management score was calculated for each NPO to develop an understanding of the
overall management practice and risk level. This overall management score was based on an
overall management practice scale combining each of the management practice areas and
consisted of 90 items related to the dimensions of the board (measured by 30 items), service
delivery (measured by 12 items), human resources (measured by 28 items) and finance
(measured by 20 items). The minimum score for the overall management scale was 0 (0 × 90),
and the maximum score was 360 (4 × 90 = 360). The internal consistency and reliability of
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this combined overall management scale were very high, as the Cronbach’s alpha was .90,
ensuring that the scale measured the construct of management. An associated risk level was
then gauged based on the management practice level and associated risk matrix developed in
this study. Table 5-14. Overall management practice and risk level shows the number and
percentage of NPOs in each management practice level and corresponding risk level. The
table shows that more than half of the NPOs (63.1%) were at medium risk in terms of their
overall management, as management practice was borderline. However, only 10.8% of the
NPOs were at high risk, as their management practices were poor. Only two organisations
were able to demonstrate excellent overall management with no organisational risks. On
average, the NPOs demonstrated an overall borderline management and were at medium risk
(M = 222.75, SD = 43.19, Median = 222).
Table 5-14. Overall management practice and risk level

Total 53 81.5 100.0
Missing * 12 18.5
Total 65 100.0
Figure 5.15. NPO management risks: Summary provides a summary of management risks in
each area and the overall management risk of NPOs. As evident in the figure, for the majority
of organisations, the board management was borderline and at medium risk, service delivery
management was poor and at high risk, human resource management was borderline and at
medium risk, and financial management was good and at low risk. Combining all these four
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key dimensions, the overall management of NPOs can be summarised as borderline and at
medium risk.
Figure 5.15. NPO management risks: Summary
NPO Management risks-Summary

70 63.1
60 55.4
Percentage of NPOs
47.7
50 44.6
40 36.9
33.8 33.8
30 26.2
16.9 18.5
20 13.8 15.4
9.2 10.8
7.7
10 4.6 5 4.6 3.1
1.5
0
Governance Service delivery Human resources Finance Overall
management risk
Management risk areas
High risk Medium risk Low risk No risk
It is surprising to note that while 73.9% of NPOs were at either medium or high risk in terms
of their overall management practices, 61.5% reported that they were satisfied with their
management practices. More than half of the NPOs also felt that non-profit management is
different (56.9%) from public and business management. Figure 5.16. Management
satisfaction and sector difference: NPO responses shows the percentage of the NPOs’
responses to management satisfaction and sector difference in management.
Figure 5.16. Management satisfaction and sector difference: NPO responses

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70
61.5
60 56.9
Percentage of NPOs
50
40 33.8 32.3
30
20
10 4.6 6.2 4.6
0
Satisfaction with management Difference in sectoral management
NPO Responses
Yes No Not sure Did not answer
5.8 Commitment to te Tiriti o Waitangi

Many community organisations, not just iwi or hapū groups, are expected to make a strong
commitment to honouring te Tiriti o Waitangi, and their organisational structure and practices
often reflect this commitment. When asked about how the organisations demonstrated their
commitment to te Tiriti o Waitangi, all the Māori NPOs confirmed that they had a statement
in their constitution or founding documents outlining this commitment. The majority of the
non-Māori NPOs (79.1%) also confirmed that they had a statement in their organisational
documents about this commitment. However, more than a quarter of non-Māori NPOs
(27.9%) confirmed that their personnel did not have an understanding of the meaning of this
commitment to te Tiriti, and a quarter of them (25.6%) were also unsure about their
personnel’s understanding of this commitment. While most of the Māori organisations
confirmed that their people understood this commitment, a few of them (18.2%) were unsure
about their people’s understanding of the organisation’s commitment to te Tiriti o Waitangi.
Moreover, just over half of the non-Māori NPOs (53.5%) were able to confirm the
commitment through their activities; only less than half of them (41.9%) were able to
demonstrate this commitment through their staffing. More than half of the non-Māori NPOs
were also not able to build a relationship with the tangata whenua. This shows that non-Māori
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NPOs faced some challenges in demonstrating their commitment to te Tiriti o Waitangi,
which left a gap in cultural accountability.
5.9 Relationship between the Management of the Board, Human

Resources, Service Delivery and Finance
Correlational analysis was used to analyse the relationships between the four key variables.
Correlation analyses are used to describe the strength and direction of the linear relationship
between two variables (Pallant, 2011, p. 128). The summated scale scores for each of the
variables (as measured by the management practices rating scales) were used to run the
correlational analysis. The Pearson product-moment correlation (r) was used when the scores
on each variable were normally distributed, and Spearman’s rank-order correlation (rho) was
used when the distribution of one or both variables violated the assumption of normality.
Spearman’s rank-order correlation was also used for analysing the relationship between the
categorical variables (management risks). A percentage of variance was also calculated to
explain the strength of the relationship between variables. The results and interpretation of all
the correlation tests are provided below.
The relationship between the management of the board (as measured by the board
management rating scale, n = 60, M = 75.53, SD = 17.78) and service delivery (as measured
by the service delivery management rating scale, n = 57, M = 27.63, SD = 11.63) was
investigated using the Pearson product-moment correlation coefficient (r). Preliminary
analyses were performed to ensure there was no violation of the assumptions of normality,
linearity and homoscedasticity. There was a statistically significant medium, positive
correlation between the management of the board and service delivery, r = .32, n = 57,
p = .017, accounting for 10% of variance, indicating that the board management was
associated with service delivery management. When the NPOs followed the recommended
board management practices, they also followed the recommended practices of service
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delivery management, indicating a relationship between board management and service
delivery management.
management rating scale, n = 60, M = 75.53, SD = 17.78) and human resources (as measured
by the human resource management rating scale, n = 60, M = 63.93, SD = 16.43) was
investigated using Spearman’s rank-order correlation coefficient (rho). There was no
statistically significant correlation between the management of the board and human
resources, rs = .06, n = 57, p = .643, accounting for only 0.4% of variance, indicating that
there was no association between management of the board and human resources. This
indicates that the board management did not vary with the management of human resources or
vice versa.
The relationship between management of the board (as measured by the board management
rating scale, n = 60, M = 75.53, SD = 17.78) and finance (as measured by the financial
management rating scale, n = 62, M = 57.06, SD = 17.67) was investigated using Spearman’s
rank-order correlation coefficient (rho). There was a statistically significant medium, positive
correlation between management of the board and finance, rs = .34, n = 59, p = .009,
accounting for 11% of variance, indicating that board management was associated with
financial management. When NPOs followed the recommended board management practices,
they also followed the recommended practices of finance management, indicating a
relationship between board management and financial management.
The relationship between the management of service delivery (as measured by the service
delivery management rating scale, n = 60, M = 27.63, SD = 11.63) and human resources (as
measured by the human resource management rating scale, n = 60, M = 63.93, SD = 16.43)
was investigated using Spearman’s rank-order correlation coefficient (rho). There was no
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statistically significant correlation between service delivery and human resources, rs = .10,
n = 55, p = .456, accounting for only 1% of variance, indicating that there was no relationship
between the management of service delivery and human resources. This indicates that service
delivery management did not vary with human resource management or vice versa.
The relationship between the management of service delivery (as measured by the service
delivery management rating scale, n = 60, M = 27.63, SD = 11.63) and finance (as measured
by the financial management rating scale, n = 62, M = 57.06, SD = 17.67) was investigated
using Spearman’s rank-order correlation coefficient (rho). There was no statistically
significant correlation between the management of service delivery and finance, rs = .25,
n = 60, p = .061, accounting for only 6% of variance, indicating that there was no association
between the management of service delivery and human resources. This indicates that the
management of service delivery did not vary with finance management or vice versa.
The relationship between the management of human resources (as measured by the human
resource management rating scale, n = 60, M = 63.93, SD = 16.43) and finance (as measured
by the financial management scale, n = 62, M = 57.06, SD = 17.67) was investigated using
Spearman’s rank-order correlation coefficient (rho). There was a statistically significant
medium, positive correlation between human resource management and financial
management, rs = .33, n = 57, p = .015, accounting for 11% of variance, indicating that
finance management was associated with human resource management. When NPOs
followed the recommended financial management practices, they also followed the
recommended practices of human resource management, indicating a relationship between
financial management and human resource management.
Based on the above bivariate correlational analysis, it can be concluded that there was a
statistically significant positive relationship between the management of the board and the
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management of service delivery and finance, but not between the management of the board
and human resources. Furthermore, there was a significant positive relationship between the
management of human resources and finance, but not between the management of finance and
service delivery and management of service delivery and human resources. To explore these
relationships between the four key areas of management further, the relationships between
management risks in these areas were also investigated using Spearman’s rank-order
correlation. Table 5-15. Spearman’s rho correlation matrix shows the Spearman’s rho
correlation matrix.
Table 5-15. Spearman’s rho correlation matrix

Risk board Risk Risk human Risk
Correlations
services resources finance
Correlation
1.000 .263* .016 .299*
coefficient
Risk governance
Sig. (2-tailed) — .048 .905 .022
N 60 57 57 59
Correlation
.263* 1.000 .116 .208
coefficient
Risk services
Sig. (2-tailed) .048 — .399 .117
N 57 60 55 58
Spearman’s rho
Correlation
.016 .116 1.000 .230
coefficient
Risk human
resources Sig. (2-tailed) .905 .399 — .086
N 57 55 60 57
Correlation
.299* .208 .230 1.000
coefficient
Risk financial
management Sig. (2-tailed) .022 .117 .086 —
N 59 58 57 62
* Correlation is significant at the 0.05 level (2-tailed).
As with management practice, there was a small, but statistically significant, positive
correlation between governance risks and service delivery risk (rs = .26, n = 57, p = .048 with
7% variance) and a medium, but statistically significant, positive correlation between
governance risks and financial management risks (rs = .30, n = 59, p = .022 with 9%
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variance). There was no significant correlation between the risks in service delivery, human
resources and financial management. This demonstrates that the management risks in service
delivery and finance increased with risks in board management, but the management risks in
service delivery, human resources and finance did not vary with each other, although there
was a relationship between the management of human resources and finance.
5.10 Difference in Management between Māori and Non-Māori Non-Profit

Organisations
The majority of the NPOs (75.4%) were of the opinion that there was a difference in
management practices between Māori and non-Māori organisations. A small percentage
(4.6%) were not sure about whether there was any difference. Of the 21 Māori organisations
that responded to this question, 20 believed that there was a difference, and 29 of the 38 non-
Māori organisations that responded to this question also believed that there was a difference.
As the NPOs endorsed the belief that there was a difference in the management of Māori and
non-Māori NPOs, a series of independent samples t-tests and Mann–Whitney U tests were
conducted to investigate whether there were any statistically significant differences between
Māori organisations and non-Māori organisations in their management of the board, service
delivery, human resources and finance. The independent samples t-test is a parametric test
used to test for differences between two independent groups on continuous variables that are
normally distributed and meets the assumptions of homogeneity of variance (Pallant, 2016, p.
209). Partial eta squared effect size statistics (eta squared) were also calculated to indicate the
strength of the association. The Mann–Whitney U test is a non-parametric test used to test for
differences between two independent groups on a continuous measure when the assumption
of normality is violated (Pallant, 2016, p. 230). An effect size statistics (r) was also calculated
by using the standardised test statistic (z). The results and interpretation of all the independent
samples t-tests and Mann–Whitney U tests are provided below.

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An independent samples t-test was conducted to compare the management of the board
between Māori and non-Māori organisations. The assumption of variance was tested by
Levene’s test for equality of variance and it was found that the data did not violate the
assumption of equal variance, F = 1.34, p = .252. While the Māori organisations demonstrated
a slightly better board management than non-Māori organisations, there was no statistically
significant difference in the board management between Māori organisations (n = 20,
M = 76.50, SD = 17.49) and non-Māori organisations (n = 40, M = 75.05, SD = 18.13; t
(df = 58) = .30, p = .769, two-tailed). The magnitude of the differences in the means (mean
difference = 1.45, 95% CI: −8.38 to 11.28 was minimal (eta squared = .002).
An independent samples t-test was also conducted to compare the management of service
delivery between Māori and non-Māori organisations. The assumption of variance was tested
by Levene’s test for equality of variance and found that the data did not violate the
assumption of equal variance, F = .374, p = .543. While the non–Māori organisations
demonstrated a slightly better service delivery management compared with Māori
organisations, there was no statistically significant difference in the service delivery
management practices between Māori organisations (n = 19, M = 25.37, SD = 13.18) and non-
Māori organisations (n = 41, M = 28.68, SD = 10.85; t (df = 58) = −1.03, p = .308, two-tailed).
The magnitude of the differences in the means (mean difference = −3.32, 95% CI: −9.77 to
3.14) was very small (eta squared = .018).
Mann–Whitney U tests were conducted to compare the management of human resources and
finance between Māori and non-Māori organisations. While the Māori organisations
demonstrated a better human resource management than non-Māori organisations, there was
no statistically significant difference between Māori organisations (Md = 68, M rank = 34.58,
n = 20) and non-Māori organisations (Md = 59, M rank = 28.46, n = 40) in their practices of
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human resource management, U = 318.50, z = −1.28, p = .201, r = .17. In addition, while the
non-Māori organisations demonstrated slightly better financial management, there was no
statistically significant difference between Māori organisations (Md = 60, M rank = 31.80,
n = 22) and non-Māori organisations (Md = 63, M rank = 31.34, n = 40) in the financial
management of Māori and non-Māori, U = 433.50, z = −.10, p = .924, r = .01.
Additionally, a series of chi-square tests for independence (with Fisher’s exact test) was
conducted to investigate whether Māori organisations differed significantly from non-Māori
organisations in their management risks. The results indicated a statistically significant
difference between Māori and non-Māori organisations only in finance management risk (χ2,
n = 62, p = .039, Cramer’s V = .36 [medium effect]).
A series of correlational analyses were conducted to compare the correlation coefficients
between Māori and non-Māori organisations to investigate whether there were any significant
differences in the relations between the management of the board, service delivery, human
resources and finance. The summated scale scores for each of the variables (as measured by
the management rating scales) were used to run the correlational analysis. The Pearson
product-moment correlation (r) was used when the scores on each variable were normally
distributed, and Spearman’s rank-order correlation (rho) was used when the distribution of
one or both variables violated the assumption of normality. Spearman’s rank-order correlation
was also used for analysing the relationship between the management risks. A percentage of
variance was also calculated to explain the strength of the relationship between variables. The
results and interpretation of all the correlation tests are provided below. Earlier correlational
analyses revealed that, in general, there was a relationship between the management of the
board and the management of service delivery and finance, but not between the management
of the board and human resources. Furthermore, there was also a relationship between the
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management of human resources and finance, but not between the management of finance and
service delivery and management of service delivery and human resources.
management rating scale, n = 60, M = 75.53, SD = 17.78) and service delivery (as measured
by the service delivery management rating scale, n = 57, M = 27.63, SD = 11.63) was
investigated using the Pearson product-moment correlation coefficient (r). Preliminary
analyses were performed to ensure no violation of the assumptions of normality, linearity and
homoscedasticity. When the correlation coefficients were compared for Māori and non-Māori
organisations, it was found that the correlation between management of the board and service
delivery was statistically significant, positive and stronger for Māori organisations, r = .49, n
= 18, p = .043, accounting for 24% variance compared with non-Māori organisations, r = .24,
n = 39, p = . 142, with only 6% variance (statistically non-significant).
The relationship between management of the board (as measured by the board management
rating scale, n = 60, M = 75.53, SD = 17.78) and finance (as measured by the financial
management rating scale, n = 62, M = 57.06, SD = 17.67) was investigated using Spearman’s
rank-order correlation coefficient (rho). When the correlation coefficients were compared for
Māori and non-Māori organisations, it was found that the correlation between board
management and financial management was statistically significant, positive and stronger for
Māori organisations, rs = .72, n = 20, p = .001, with 52% variance compared with non-Māori
organisations, rs = .21, n = 39, p = .182, with only 4% variance (statistically non-significant).
The relationship between the management of human resources (as measured by the human
resource management rating scale, n = 60, M = 63.93, SD = 16.43) and finance (as measured
by the financial management scale, n = 62, M = 57.06, SD = 17.67) was investigated using
Spearman’s rank-order correlation coefficient (rho). When the correlation coefficients were
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compared for Māori and non-Māori organisations, it was found that the correlation between
human resource management and financial management was statistically significant, positive
and stronger for Māori organisations, rs = .44, n = 20, p = .050, with 19% variance compared
with non-Māori organisations, rs = .22, n = 37, p = .099, with only 5% variance (statistically
non-significant). To investigate whether financial management was related to staff
management or volunteer management, Spearman’s rank-order correlation coefficients (rho)
for Māori and non-Māori organisations were calculated. When the correlation coefficients
were compared for Māori and non-Māori organisations, it was found that there was a medium
positive correlation between volunteer management and financial management in Māori
organisations, rs = .45, n = 21, p = .039, accounting for 20% of variance. However, there was
no significant correlation between staff management and financial management in Māori
organisations, rs = .16, n = 20, p = .502, with only 3% variance. In contrast, there was a
significant and strong positive correlation between staff management and financial
management, rs = .53, n = 38, p = .001, with 28% variance in non-Māori organisations, but no
significant correlation between volunteer management and financial management, rs = −.01, n
= 38, p = .968 with no variance (0.01%). This indicates that while volunteer management was
associated with financial management in Māori organisations, staff management was
associated with financial management in non-Māori organisations.
Correlation analyses were also conducted to see whether there was any significant difference
between Māori and non-Māori NPOs in the relationship between management risks. Earlier
correlation analyses found that, in general, there was a relationship between risks in board
management and risks in service delivery and finance management. Spearman’s rank-order
correlation coefficients (rho) were used to determine the relationship between the
management risks. It is evident that there were some stark differences in the relationships
between management risks between Māori and non-Māori NPOs. In Māori organisations,
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management risk in governance was associated with management risks in service delivery (rs
= .59, n = 18, p = .010, variance = 35%) and finance (rs = .59, n = 20, p = .006,
variance = 35%). Additionally, management risks in volunteer management (rs = .56, n = 18,
p = .017) was associated with risks in service delivery and finance management (rs = .52,
n = 19, p = .006, variance = 27%). In contrast, in non-Māori organisations, significant
relations in management risks were only found between staff management and volunteer
management (rs = .44, n = 40, p = .004, variance = 19%), between financial management and
staff management (rho = .48, n = 38, p = .003, variance = 23%) and between volunteer
management and financial management (rs = .32, n = 38, p = .047, variance = 10%).

Four key findings emerged from the results of this study.
1. While the extent to which the NPOs followed management practices varied among the
NPSSOs in New Zealand, on average, they demonstrated an overall borderline
management practice and were at a medium management risk. Specifically, NPOs, on
average, demonstrated borderline management of the board, service delivery, human
resources and finance, and were at medium risk in the management of all these four
key areas. Additionally, while their staff management was borderline and at medium
risk, NPOs were at high risk in terms of their volunteer management, as they
demonstrated poor volunteer management. The results also indicated that the older the
organisation was, the better their finance and human resource management. However,
the organisational age did not have any influence on the management of the board or
service delivery. The medium risks in the management of NPOs show that they
needed to enhance the capacities in their management of the board, service delivery,
staff, volunteers and finance.

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2. There was a statistically significant positive relationship between the management of
the board and the management of service delivery and finance, but not between the
management of the board and human resources. Furthermore, there was a significant
positive relationship between the management of human resources and finance, but
not between the management of finance and service delivery and management of
service delivery and human resources. Accordingly, the management risks in service
delivery and finance increased with risks in board management, but the management
risks in service delivery, human resources and finance did not vary with each other,
although there was a relationship between the management of human resources and
finance.
3. There was no statistically significant difference between Māori and non-Māori
organisations in their management of the board, service delivery, human resources and
finance. Despite this, the majority of the NPOs believed that there was a difference in
the management of Māori and non-Māori NPOs. This belief was confirmed by the
statistical analyses on the relationship between the management of the board, service
delivery, human resources and finance. The results indicated that the relationship
between the management of the board and service delivery, the board and finance, and
human resources and finance were statistically significant and stronger for Māori
organisations compared with non-Māori organisations. Moreover, while volunteer
management was associated with financial management in Māori organisations, staff
management was associated with financial management in non-Māori NPOs.
Accordingly, in Māori NPOs, risk in board management was associated with risks in
service delivery management and finance management. The risk in volunteer
management was associated with risk in service delivery and financial management,
indicating volunteer influence on service delivery and financial management in Māori

185
NPOs. In contrast, in non-Māori organisations, staff management risk was associated
with financial management risk.
4. The results also demonstrated that the non-Māori NPOs faced some challenges in
maintaining their commitment to te Tiriti o Waitangi. These challenges were related to
lack of understanding of what this commitment means, and lack of staff and
organisational activities reflecting this commitment. They also struggled to develop
constructive relationships with the tangata whenua of the location where they
operated.
This chapter discussed the results of the survey conducted among the NPSSOs in Aotearoa
New Zealand to develop an understanding of the management of their board, service delivery,
human resources and finance. The next chapter will discuss these key findings in relation to
the literature to extend this understanding.

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CHAPTER 6: DISCUSSION

resources and finance. Accordingly, data were collected from 65 NPSSOs in Aotearoa New
Zealand through an anonymous survey to develop an understanding of the management of
NPOs. The previous chapter discussed the results of this survey and identified four key
findings in relation to the research questions. This chapter discusses these key findings in
relation to the research questions formulated to develop an understanding of the management
of non-profit social services in Aotearoa New Zealand. In addition to this, two outcomes were
achieved from this discussion as a contribution to the knowledge: development of an
ecological management model to conceptualise non-profit management and a management
self-assessment tool for NPOs to assess their management practices. This chapter finishes
with a brief discussion on the limitations of the study.
6.2 Research Question 1

How well do the non-profit social service organisations in Aotearoa New Zealand manage
their board, service delivery, human resources and finance? Are there any significant
differences between Māori and non-Māori non-profit organisations in their management?
All over the world, NPOs are operating in rapidly changing, complex, paradoxical, ambiguous
and multicultural contexts (Lewis, 2017). NPOs are currently operating in an environment
influenced by a neoliberal approach promoting competition among them to deliver social
services through contracting with governments that do not ensure sustainability and continuity
for the people who receive the services. Expected to ensure better value for money for
taxpayers, this quasi-market model of service delivery is putting massive pressure on NPOs to
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demonstrate efficient use of limited resources and accountability to the government while the
demand for services is on the rise (Gardner, 2016; Healy, 2014). The limited availability of
funding and delivering services in silos is resulting in NPOs not being able to provide holistic
services to the clients. This task environment is also informed by the NPM approach, which
promotes an audit culture and outcome perspectives in service delivery, forcing NPOs to
adopt a business management approach to their management (Healy, 2014). This is
characterised by the management of risk and performance measurement and decreased
participation of service users in the creation of social services. Cribb (2017) argued that the
need for organisational management is more critical than ever as the environmental context of
NPOs in Aotearoa New Zealand is rapidly changing in terms of government policy, funding
availability and client need. While the importance of proper management of NPOs is more
relevant than ever, the findings of this study indicate that, in general, the NPOs in Aotearoa
New Zealand are struggling with their management in this challenging and complex task
environment.
According to the results of this study, on average, the NPOs demonstrated an overall
borderline management practice and were at a medium management risk in terms of the
extent to which they followed the management practice. More specifically, the NPOs, on
average, demonstrated borderline management of the board, service delivery, human
resources and finance, and were at medium risk in the management of all these four key areas
of their internal functioning. Additionally, while their staff management was borderline and at
medium risk, the NPOs were at high risk in terms of their volunteer management as they
struggled with their management of volunteers. While the average scores position the NPOs at
a medium risk in all organisational management domains examined in this study, this needs to
be approached with caution. When examining the percentage of NPOs at low risk or no risk in
their management areas, the results suggest that 53.8% of the NPOs were at low or no risk in
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terms of their finance management as they demonstrated good or excellent financial
management. In addition, 26.1% demonstrated good or excellent staff management, 20%
demonstrated good or excellent board management, 21.5% demonstrated good or excellent
service delivery management, and 9.2% demonstrated good or excellent volunteer
management, placing them in a low or no risk category in these domains of management.
Moreover, while the organisational age did not have any influence on the management of the
board or service delivery, the results also indicate that the older the organisation was, the
better their finance and human resource management were.
When the differences in management between Māori and non-Māori organisations were
examined, the results revealed that there was no statistically significant difference between
Māori and non-Māori organisations in their management of the board, service delivery,
human resources and finance. Furthermore, the results suggest that, in general, both sets of
organisations’ management of the board, service delivery management and human resource
management were borderline and at medium risk. Although not statistically significant, the
results also indicated that the management of the board and staff were slightly better in Māori
organisations and the management of finance and service delivery was marginally better for
non-Māori organisations compared with Māori organisations. Despite their organisational
identity as Māori and non-Māori organisations, the results demonstrated that nine out of 10
NPOs were at either a high or a medium overall management risk. This broadly confirms the
previous, though limited, research findings concerning the significant organisational
challenges faced by NPOs in New Zealand. Regardless of their organisational identity as
Māori or non-Māori organisations, all NPOs are subjected to the same task environment,
which is a product of the neoliberal and NPM approach to social welfare and the economy.
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The available evidence suggests that the organisational challenges faced by NPOs in Aotearoa
New Zealand have fundamentally remained the same in the past 10 years. This research
evidence identified governance and board management as one of the key challenges faced by
the NPO sector (Cayley, 2008; Cribb, 2017; Darkins, 2010; Family and Community Services
& OCVS, 2005; Grant Thornton, 2005, 2008, 2009, 2011, 2013, 2016; Haigh, 2008). As the
demand for services is increasing, and the complex nature of issues people bring to the NPOs
in seeking assistance, service delivery has become another critical concern for NPOs (Cayley,
2008; ComVoices, 2014, 2016; Cribb, 2017; Darkins, 2010; Grant Thornton, 2009, 2011,
2013, 2016; Neilson et al., 2015). The issues with managing staff and volunteers has also
remained a key concern among NPOs over the years (Cayley, 2008; ComVoices, 2014, 2016;
Darkins, 2010; Family and Community Services & OCVS, 2005; Grant Thornton, 2005,
2009, 2011, 2013, 2016; Lee, 2012; NGO Health & Disability Network, 2013). Most
importantly, funding and other issues related to financial management have remained the
primary concern for all NPOs (BDO, 2016a; Cayley, 2008; ComVoices, 2014, 2016; Darkins,
2010; Family and Community Services & OCVS, 2005; Grant Thornton, 2005, 2008, 2009,
2011, 2013, 2016; NGO Health & Disability Network, 2013). Therefore, it is hardly
surprising that this study has identified that NPOs struggle with their management of the
board, service delivery, human resources and finance. However, it is of concern that the issues
have remained the same for over a decade, and the situation is not improving. As the
organisations carry significant risks in the management of these areas, which can lead to
substantial hardships for NPOs, they need immediate attention. The findings of this study
suggest that NPOs could improve their management of the board, service delivery, staff,
volunteers and finance, and enhance their capacities to do so.
As there is a consensus about the significance of proper management of NPOs to address the
challenges brought by the neoliberal and NPM context (Ahmed, 2013; Anheier, 2014;
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Hudson, 2009; Renz, 2010a), it remains a mystery as to why the NPOs consistently reported
the same challenges and struggled to manage their board, service delivery, human resources
and finance. It is clear from the findings of this research and other evidence that NPSSOs in
New Zealand face significant challenges in the areas of the board, service delivery, human
resources and finances, and are at risk in terms of their management. These risks could
eventually affect their organisational functioning and their survival if they are not doing so
already. Therefore, NPOs need to critically reflect on how they manage their board, service
delivery, human resources and finance to find ways to survive in the complex task
environment where they compete with each other for resources and to justify their
organisational existence. Reflecting on their internal management practices would assist the
organisations to improve their management practices, reduce organisational risks, develop and
maintain organisational efficiency and effectiveness, and ultimately fulfil their mission.
NPOs go through a life course, and they may experience stressors and events that could
disturb their internal functioning and fit with the environment. To achieve the organisation–
environment fit, NPOs need to continually assess the stressors in their internal subsystems and
the environmental layers and needs to enhance and strengthen their adaptive capacities and
problem-solving abilities by strengthening their subsystems. NPO management should be a
process aiming to improve the organisation’s ability to manage stress points and improve their
responsiveness to the internal and external environments. As part of this management process,
NPOs are required to assess the strengths and weaknesses of the organisation first by looking
into their internal management of organisational subsystems, such as the board, service
delivery, human resources and management. This self-assessment could assist the NPOs to
understand how they respond to their environment as well. When organisations evaluate
themselves on their management practices, it will give them an opportunity to be critically
reflective learning organisations and engage in an organisational change process. A reflective

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learning organisation can react and respond creatively and intuitively to its weaknesses with
the new learning about itself. Being a critically reflective learning organisation not only
encourages the organisation to engage with its own structures and processes to understand
what is happening within it and how this is influenced by the context, but also how to act on
this understanding. Organisational self-assessment is key to capacity building (James, 2014)
and can be a very constructive process (Paton, Foot, & Payne, 2000). For instance, the
evaluation of the long-term outcomes of the SCOPE project in New Zealand by Oliver (2009)
revealed that NPOs that used the SCOPE assessment tool gained improvements in the
different domains of their management, such as governance and internal relationships.
Similarly, in their study of 122 NPOs, which included an online self-assessment of board
performance by the study participants, Harrison and Murray (2015) found that the self-
assessment was an effective means of change in the governance process because it facilitated
reflection on their performance and making decisions for improving governance. This shows
the efficacy of self-assessment. To be a critically reflective learning organisation, NPOs
should be able to assess and reflect on how they manage against a set of management
practices because these practices can offer a broad view of what good management would
look like. While practice guidelines could be normative and prescriptive (Anheier, 2014;
Lewis, 2014), based on their empirical research, Herman and Renz (1999, 2008) confirmed
that more effective NPOs are more likely to use the correct management practices. This study
has developed an NPO management self-assessment tool (see Appendix 1) based on the
literature review and the results of this study. This self-assessment tool reflects the
questionnaire used in this study for data collection, ensuring that the tool is empirically tested
and has construct validity and reliability. This self-assessment tool has four management
rating scales to measure the management of the board, service delivery, human resources and
financial management. For a scale to be reliable, the internal consistency (the degree to which
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the items that make up the scale are all measuring the same underlying attribute) should have
a minimum level of .7 Cronbach’s alpha value (Pallant, 2016). The reliability analysis
indicated that the scales have good internal consistency, as the Cronbach’s alpha coefficient
reported in the current study were above .7 for all scales (board management = .82, service
delivery management = .87, human resources management = .80 and finance management =
.91). The Cronbach’s alpha for the combined management scale was .90, indicating an overall
high internal consistency and thus reliability for this self-assessment tool.
The NPO management self-assessment tool looks at NPOs’ observance of the recommended
management practices in four critical areas of NPO management: the board, service delivery,
human resources (staff and volunteers) and finance. It is expected that the tool could
potentially help organisations to identify their strengths and the areas where they need to
improve in terms of their organisational management. Every organisation is different, and
their management will reflect this. While a “one size fits all” management approach is
unlikely to work (Herman & Renz, 2008), the practices of good management practice are the
same for most organisations most of the time (Lewis, 2015; Renz, 2010c). This self-
assessment tool focuses on the key aspects of NPO management and provides a general
indication of the strengths and weaknesses of the organisation’s management and the risks
they carry in relation to their observance of management practices. This is not an exhaustive
list of all aspects of non-profit management, it is not an audit and it does not describe a
standard set of procedures that are relevant in every situation. The practices listed in the
management rating scales are related to the role and purposes of management in those areas
and are the foundation stones of good practice. These practices were derived from the
literature on NPO management and the organisational assessment tools that are congruent
with the management processes identified in the academic literature. The self-assessment tool
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and the instructions for using the tool are provided in Appendix 1: Non-profit management
self-assessment tool.

Is there any significant relationship between the management of the governance board, human
resources, service delivery and finance in non-profit organisations in New Zealand? Do these
relationships vary between Māori and non-Māori organisations?
Billis (1996) argued that the internal components of NPOs interact with each other, and an
understanding of those interactions is essential for the study and control of significant
organisational change and future organisational survival. However, while the existing
literature on NPO management provides many insights about various domains of NPO
management, such as the board, service delivery, human resources and finance,
independently, no explicit assertions or conclusions about the interrelation between these
areas of NPO management can be found in the literature. This is a significant gap in our
knowledge about non-profit management. The systems thinking employed in this study
argued that NPOs are systems made of subsystems that are interacting with each other
(Coulshed et al., 2006; Gardner, 2016; Jones & May, 1992). Because NPO management
involves four essential elements—the board, service delivery, human resources and finance—
they can be considered the subsystems in NPOs. Accordingly, a view on the management of
NPOs includes looking at the relationship between the internal organisational elements of the
board, service delivery, human resources and finance. According to the results of this study,
there was a relationship between the management of the board and the management of service
delivery and finance, but not between the management of the board and human resources.
Furthermore, there was a significant positive relationship between the management of human
resources and finance, but not between the management of finance and service delivery and
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management of service delivery and human resources. Accordingly, the management risks in
service delivery and finance increased with risks in board management, but the management
risks in service delivery, human resources and finance did not vary with each other, although
there was a relationship between the management of human resources and finance.
The fact that service delivery management did not have any statistically significant
relationship with the management of human resources and finance was a surprising finding
from a systems thinking perspective because all elements of management are expected to
interact with each other. As paid staff, often with the assistance of volunteers, primarily
deliver the services of the NPOs, one could speculate that there should be a relationship
between human resources and service delivery. One possible explanation for this result is that
while professional staff or volunteers provide the services, the resource allocation, managerial
control related with service delivery, and supervision of staff and volunteers rest with the
CEO. In other words, while the staff and volunteers provide the services, they are managed by
the CEO. Although this study did not find a relationship between the management of human
resource management and service delivery, one could still speculate a relationship between
the management of them, which is controlled by the CEO. Moreover, CEOs act as a link
between staff, volunteers and the board, and largely control the organisational resources
allocated to people for various jobs. As the CEO connects and balances all the subsystems
such as the board, service delivery, human resources and finances in NPOs, they need to be
considered the key element of NPO management. This has implications for how we see NPO
management from a systems thinking perspective.
The conceptual framework of systems thinking employed in this study proposed that there
should be a relationship between all the organisational elements of the board, service delivery,
human resources and finance. However, according to the results of this study, while the
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relationships found between organisational elements seemed to be linear and positive, a
relationship could not be found between all the organisational elements, thus questioning the
propositions of systems thinking about the relationships between organisational elements. As
the results found a relationship between some of the organisational elements, the proposition
of systems thinking is partly confirmed. However, an examination of the nature of the
relationship between the management of organisational elements of internal functioning
between Māori and non-Māori organisations showed that the relationship between
organisational elements is indeed a matter of comparison.
It is essential to acknowledge that the measurement of management was based on practices
mainly drawn from literature mainly informed by Western Eurocentric perspectives and
theories and may not reflect Te Ao Māori (Māori world view) and mātauranga Māori (Māori
knowledge). While the management practice standards may be relevant and useful for Māori
organisations, I acknowledge that this may not reflect Māori management thinking and there
are limitations to their cultural interpretation and relevance. In fact, Mika and O’Sullivan
(2014) argued that American and European thinking dominate the theory and practice of
management in New Zealand and alternative indigenous perspectives are not readily
considered. However, Hollis-English (2012) argued that Western theories could be of use for
Māori when interpreting situations relevant to organisational practice. As a result, “Māori
management tends to integrate Māori and Western management theories and practices to
achieve Māori-defined purposes within Māori organisational settings” (Mika & O’Sullivan,
2014, p. 651). However, a “particular worldview that is influenced by one’s experiences of
being connected to a whānau, hapū and iwi, being indigenous in Aotearoa and having
embedded in one’s ancestry, specific values and traditions belonging to that culture” (Hollis-
English, 2015, p. 6) could influence Māori thinking. Research evidence on the management
differences between Māori and non-Māori NPSSOs is almost non-existent.

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According to the results of this study, both Māori and non-Māori NPOs believed that the
management of Māori NPOs is different from the management of non-Māori NPOs. The open
comments received from both Māori and non-Māori organisations suggested that while there
may not be much difference in what they do in terms of management, there are significant
cultural differences in how they do this. The comments from Māori organisations suggest that
te Tiriti o Waitangi is a cornerstone for their organisations and te Tiriti articles and practices
are embodied in all organisational policies, and that management processes reflect Māori
values and practices. According to their view, Māori organisations are being governed and
managed in accordance with tikanga Māori and have values founded upon tautoko (support),
āwhinatanga (empathy), whanaungatanga and whakapapa. Te Kanawa, Hanita and Rihia
(2016) support this view by arguing that many Māori organisational practices centre on
whanaungatanga and tau utuutu (reciprocity) to facilitate the aspiration to koha tuku rua atu
(redistribution) of resources to support whānau, hapū and iwi. Interestingly, the non-Māori
organisations believed that in Māori organisations, decision making tends to be collectivistic
and consensus based and there is more consultation with the communities they serve. Mika
and O’Sullivan (2014), in fact, supported this by confirming that Māori managers achieve
consensus as the ideal decision-making process through hui (meetings). While the non-Māori
organisations did not comment on the decision-making processes in their organisations, one
could speculate that the decision making is manager driven.
When the relationships between the management of organisational elements were compared
between Māori and non-Māori organisations, the results demonstrated that the relations
between the management of the board, service delivery and financial management were
stronger and more significant for Māori organisations compared with non-Māori
organisations. The results also indicated that volunteers had a strong and vital influence on
financial management in Māori organisations, whereas in non-Māori organisations staff

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influenced financial management. There was also a strong relationship between staff
management and volunteer management in Māori organisations compared with non-Māori
organisations. The results also suggested that in Māori organisations, there was an association
between the risks in the management of the board, service delivery and finance. Furthermore,
there was an association between risks in volunteer management and risks in service delivery
and financial management, indicating volunteer influence on service delivery and financial
management. In contrast, in non-Māori organisations, only the risks in the management of
staff and finance were associated with each other.
The board and volunteers had a significant influence on the day-to-day management of the
Māori organisations. This supports the notion that the division between governance and
operational management does not exist in the leadership models of some Māori organisations
(Mueller et al., 2006). Whakapapa is a consideration in determining governing and
managerial appointments, especially in communally based Māori organisations (Mika &
O’Sullivan, 2014). As Māori see their services to the community as an extension of everyday
family responsibility as opposed to a different activity (OCVS, 2007), it is not surprising that
the volunteers and the board have a strong influence on the day-to-day management of Māori
organisations. This could also mean that Western ideas of boundaries and confidentiality are
different for Māori (Moorhouse, personal communication, 2017). The concept of free will or
free choice in Western conceptions of volunteering is not relevant to Māori organisations
because the commitment of unpaid labour is a high cultural expectation and norm (OCVS,
2007). Therefore, the Western understanding of volunteering, philanthropy, community work
and the separation of community and family are not readily transferable in a Māori context
(Robbins & Williams, 2002, as cited in Hollis-English, 2012; Tennant et al., 2006). For
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Māori, volunteering is based on the notion of whanaungatanga and mahi aroha15 or
volunteering is performed out of love, sympathy or caring and through a sense of duty
(OCVS, 2007). Volunteering is considered an essential aspect of fulfilling cultural obligations
for the benefit of whānau, hapū and iwi. Mahi aroha is also central to maintaining a sense of
identity and for keeping Māori culture and traditions (OCVS, 2007).
The role of the kaumatua (elder) is of high relevance to Māori organisations despite whether
their involvement is formal or informal. Eketone (2002) argued that the place of kaumātua
(elders) as cultural and spiritual overseers is invaluable and unquestioned in Māori
organisations. It is their role to make sure that the tikanga is observed and the mana
(status/prestige/integrity) of everyone is upheld and that the concepts of tapu
(sacred/restricted) and noa (non-sacred/unrestricted) are respected (Eketone, 2002). Kaumātua
are seen as the acknowledged repository of the kaupapa of mahi aroha (expert guidance to
ways of helping communities) (OCVS, 2007). Rangatiratanga (leadership) is considered an
essential element of managing Māori organisations (MSD, 2013b). The involvement of the
broader Māori community in setting organisational strategies as part of kinship connections is
a commitment to this principle (MSD, 2013b). In this sense, the concept of leadership has a
broader meaning in a Māori context and is a significant consideration in some Māori
organisations. Essentially, Māori management is characterised by whakapapa (a genealogical
connection to and identity as Māori) and tirohanga Māori (Māori world view) and involves
the adoption of kaupapa Māori, mātauranga Māori, tikanga Māori and whakahaere Māori
(Māori management practices) (Mika & O’Sullivan, 2014, pp. 655–656). As Mika and
O’Sullivan (2014) pointed out, it can be concluded that while Māori organisations might have
adopted many Western modern management practices, they do approach the tasks and
15A Māori term used as an alternative to volunteering and defined as the voluntary or unpaid work or mahi undertaken, not
including day-to-day household maintenance or care of immediate family sharing the home (OCVS, 2007).
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processes from a specific cultural lens that is informed by cultural imperatives such as the
tikanga and kawa (protocol) of the organisation, community expectations and individual,
organisational circumstances. Te Kanawa et al. (2016) proposed that having the courage to
simply “be Māori” by being connected to values and to each other, whenua (land), culture, the
world and history is the key to the success of Māori organisations. More research from a
kaupapa Māori point of view is required to understand the extent and the underlying features
of this cultural lens.

How do the NPOs manage their relationships with other organisations and demonstrate their
commitment to te Tiriti o Waitangi?
The results demonstrated that the non-Māori NPOs faced some challenges in maintaining
their commitment to te Tiriti o Waitangi. These challenges were related to lack of
understanding of what this commitment means, and the lack of staff and organisational
activities to reflect this commitment. In addition, they struggled to develop constructive
relationships with the tangata whenua of the location where they operated.
Te Tiriti o Waitangi protects the rights of Māori as tangata whenua and validates the existence
of tauiwi (others who came to Aotearoa New Zealand after Māori) (Munford & Sanders,
2010). A key intent of the Treaty of Waitangi was to uphold relationships of mutual benefit
between the indigenous peoples of Aotearoa and all those who had come, and were to come,
to settle here. All NPOs—not just iwi or hapū groups—are expected to make a strong
commitment to honouring te Tiriti O Waitangi, and their organisational structure and
practices need to reflect this commitment (Freeman & Thompson, 2005a). While the
indigenous Māori population comprises only 15% of the population, the MSD (2013b)
pointed to the fact that Māori children, young people and families are overrepresented in cases
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of socio-economic deprivation, harm and neglect, and NPOs are required to be fully
responsive and bridge the socio-economic gaps between Māori and other New Zealanders.
This requires all the NPOs to understand and value Māori culture, values and heritage (MSD,
2013b), and adds another cultural accountability layer to NPO management. The results
indicate that the commitment to te Tiriti was expressed as a statement in the constitution or
other foundational documents in all the Māori organisations and the majority of the non-
Māori organisations. This commitment to te Tiriti was also often verbalised in the vision,
mission and value statements. While the formalisation of this commitment to the Treaty was
appreciable, the results also suggest that there was a lack of understanding of the articles and
practices of the Treaty and their relevance to the organisational functioning among the board
members, staff and volunteers in a majority of the non-Māori organisations. The Treaty
practices were derived from the Treaty and the most well known are partnership, participation
and protection (Margaret, 2016). However, these are defined by the New Zealand
governments, the articles of te Tiriti o Waitangi provide a better foundation for developing
and maintaining the commitment to te Tiriti o Waitangi (Margaret, 2016).
According to the results of the study, while almost all the Māori organisation’s staffing
structure, policies and services reflected their commitment to the Treaty, many non-Māori
organisations’ staffing, policies and services did not reflect their commitment to the Treaty. A
number of non-Māori organisations were uncertain about what this commitment to the Treaty
means in practice and how they could achieve this commitment, indicating a lack of cultural
awareness and the need to undertake training. The results also suggest that while some non-
Māori organisations used the services of a kaumatua for cultural advice, more than half of the
non-Māori organisations did not develop any ongoing relationship with the tangata whenua,
thus showing lack of commitment to partnership with Māori. The current contracting regime
requires NPOs to demonstrate their commitment to the Treaty (Sanders et al., 2008), and the
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findings suggest that this is an ongoing challenge for non-Māori organisations. This finding
confirms the assertion made by Margaret (2016) and Sanders et al. (2008) that there is
considerable uncertainty about how the Treaty’s bicultural requirements can effectively be
articulated in practice. Margaret (2016) argued that in the context of NPOs, a commitment to
te Tiriti and biculturalism is more than demonstrating cultural competency to engage with
Māori as it is “equated in organisational contexts with a focus on ritual aspects of Te Ao
Māori, for example, karakia [prayer], waiata [song], mihi whakatau [official welcome
speech], rather than shifting power relationships, for example by moving to co-governance”
(p. 9). Hollis-English (2012) argued that while many social service organisations have taken
significant steps to implement te Tiriti o Waitangi, cultural tokenism is still very prevalent
among social service organisations in New Zealand. As organisations tend to hand over their
cultural responsibilities to their Māori staff, Hollis-English (2012) suggested that the
organisations should instead review their level of cultural capabilities as an organisation.
Margaret (2016) suggested that “re-normalising Māori culture is a critical aspect of being
Treaty honouring” (p. 9). Similarly, Hollis-English (2012) suggested that non-Māori staff
need to put Māori processes into action according to tikanga by acquiring the skills and
knowledge and should not compromise cultural practices and beliefs when they work with
Māori service users. Margaret (2016) described the ultimate destination for NPOs to work
with the Treaty as “living the relationships envisioned by the Treaty (honourable kāwanatanga
[government] and tino rangatiratanga)” (p. 12). Embracing the Treaty is an ongoing process
of change at both the organisational level and the personal level. This shows that
organisational staff, board members and volunteers need to engage in capacity building to
acquire the relevant cultural knowledge and skills to work with Māori and demonstrate their
commitment to te Tiriti o Waitangi.

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6.5 Ecosystem Model of Non-Profit Organisation Management

The conceptual framework of systems thinking adopted in this study to guide the research
enquiry argued that NPOs are open systems consisting of interrelated elements interacting
with their task environments (Anheier, 2005; Coulshed et al., 2006; Gardner, 2016; Jones &
May, 1992; Lewis, 2014). The results of this study were only able to partly confirm this
proposition, as relationships between the management of various organisational elements
were not found between all the organisational elements. Nevertheless, the earlier discussion
argued that the relationship between the organisational elements is a matter of comparison
due to organisational identities and can significantly vary between organisations, as observed
between Māori and non-Māori NPOs. The role of the CEO emerged as an influence on
determining the relationships between the management of various organisational elements
such as boards, service delivery, human resources and finance. The literature on NPOs
suggests that NPOs interact with an external task environment, and NPOs need to
simultaneously attend to multiple levels of management challenges in a typically complex,
insecure, ambiguous, rapidly changing and multicultural environment for their survival and
growth (Anheier, 2014; Lewis, 2014; Rahman, 2007; Schmid, 2004; Worth, 2014). The
literature on the NPO sector in New Zealand demonstrated that NPOs face many
environmental challenges (see Chapter 3) and they need to navigate through a complex
multilayered environment to function and fulfil their organisational purposes. As evident from
the discussion on NPOs’ commitment to te Tiriti o Waitangi, there is also a cultural context
that influences the task environment and internal functioning of the NPOs. This cultural layer
has a significant influence on the management of NPOs.
Schmid (2004) argued that NPOs have very limited or no control over the political, economic,
social, technological, legal and cultural elements of this external environment, and these
external factors have considerable power and control over NPOs and influence their
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emergence and dissolution. For example, political decisions regarding allocation of resources
to particular target populations such as mental health patients or victims of violence have an
immediate impact on the stability of NPOs that provide services to these people. Therefore, it
can then be argued that to understand NPO management fully, we need to look at the
management of the interrelated internal organisational elements within the context of the
environment in which they operate. While systems thinking explains the relationship between
organisational elements and the relevance of the environment, it does not articulate what this
environment is, how many layers it has, and who guides the organisations to navigate through
the environment. This suggests that we need to reconceptualise NPO management as a
multidimensional process consisting of various interrelated subsystems that are influenced by
a multilayered environment, which consists of many other systems. Moreover, systems
thinking is very generic in its approach and does not contextualise the arguments in relation to
NPOs. The current literature on NPO management does not provide theoretical models that
explain the interrelated nature of the elements (subsystems) of internal management and the
external environment. Therefore, this thesis argues that a reconceptualisation of NPO
management is necessary, and combining the ideas from systems thinking with the literature
on the external environment into a conceptual model will provide an integrated and
comprehensive view of NPO management that explains the interactions between the
subsystems within an NPO and its interaction with the external environment. A conceptual
model can be beneficial for NPO managers, professional staff, academicians and students
because it is a descriptive way of showing the relationship between a number of elements and
describing phenomena such as NPO management (Chenoweth & McAuliffe, 2017). A
conceptual model demonstrates the relationships between the elements rather than explains it
and lays out tasks for practitioners and managers. A model can also be considered a theory
depicted logically and graphically (Teater, 2014). Accordingly, this study proposes an
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ecosystem model of NPO management to fill the knowledge gap in the NPO management
literature. Figure 6.1. Ecosystems model of NPO management provides a visual
representation of the ecosystem model of NPO management. The focus of the ecosystem
model is on the relationship between organisational elements of the board, service delivery,
human resources and finance and how NPOs as an organisational system interact with the
multilayered task environment in which they operate to carry out their organisational mission.
The task environment is considered one of the main determinants of the organisation’s
survival along with the dynamics of the management of internal elements. This model is
concerned with populations of NPOs rather than individual organisations.

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Figure 6.1. Ecosystems model of NPO management
The ecosystem model (Figure 6.1) of NPO management brings together a system lens on
NPOs with an ecological lens on the environment in which they operate. Using a system lens,
this model proposes that NPOs are open systems that comprise interdependent and interacting
subsystems and are part of a supersystem of the NPO sector as a whole. The ecological lens
on the environment proposes that the environment in which the NPOs are operating consists
of a number of systems and is the main determinant of NPOs’ survival and growth.
Combining these two lenses, the ecosystems model focuses on the interactions within the
206
NPOs and across environmental systems and argues that NPO management should focus on
the organisation–environment interactions. These organisation–environment interactions are
complex, and NPOs need ‘boundary spanners’ to navigate through these interactions to ensure
their survival and growth (Robbins & Barnwell, 2006). Boundary spanners connect with all
the subsystems in an organisation and act as a mediator between the subsystems and between
the NPO and the various environmental systems (Robbins & Barnwell, 2006). The leaders of
the organisation—the board and the CEO—are the boundary spanners for NPOs because
“organisations do not interact with their environment; their members do” (Silverman, 1970, as
cited in Jones & May, 1992, p. 47). The current organisational challenges faced by NPOs
span across boundaries, and so must the leadership. Boundary-spanning leadership is defined
as the ability to establish connections across the boundaries to make the organisation
adaptable to changes in its task environment so that it can achieve its organisational mission.
Boundary spanners represent the organisation, link the NPOs to the external environmental
systems and assume the responsibility to fulfil the organisational mission. The purpose of
non-profit management is then to improve the interaction between the organisational
subsystems and between the organisation and the various systems in its environment and to
promote adaptation between the organisation and its environment.
Based on the literature review and findings of this study, the model argues that an NPO can be
considered an open system composed of four key subsystems that interact with each other—
the board, human resources, service delivery and finance—and is part of a larger supersystem
known as the non-profit sector. The CEO and the board of the NPO are considered the
boundary spanners because the CEO is connected with all the subsystems in the NPO and acts
as a mediator between subsystems and between the NPO and the environmental system. The
board is also considered the boundary spanner as the legal authority of the NPO, and assumes
the stewardship and represents the NPO in the external environment. The external
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environment consists of three layers: microsystems, mesosystems and macrosystems. These
layers are explained below:
 Microsystems—The microsystems refer to the various environmental systems NPOs
have a direct one to one inter-organisational interaction with within the immediate
environment. These microsystems include funding bodies such as government
ministries or departments, philanthropic funders, commercial organisations or
individual donors, regulatory bodies, service users, umbrella organisations and other
NPOs that may collaborate or compete with each other in delivering services. The
microsystems also include other government departments NPOs may work with on
behalf of their service users and commercial organisations that associate with NPOs
for reasons other than funding. Importantly, the NPO connects the two critical aspects
of their functioning: service users and funders.
 Mesosystems—Mesosystems refer to the various environmental systems that do not
directly interact with the NPOs as active systems, but have the potential to affect the
functioning of NPOs. They include broader social systems such as media, economy,
politics, law and technology. For example, a change in government could result in
radical policy shifts and law changes that could severely affect the way NPOs
function. Advancements in technology such as virtual therapies could make existing
modes of service delivery obsolete and thereby threaten the organisation’s ability to
offer services.
 Macrosystems—Macrosystems refer to the broader cultural systems in the society
within which the organisations exist. They include notions such as biculturalism,
multiculturalism and discourses on identity based on age, gender, sexuality, abilities,
class, ethnicity, citizenship, history, geography and social justice. This environmental
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layer is often difficult to articulate, as it may be invisible or purposefully hidden in
our society due to various political and cultural assumptions. However, they inform
and influence the mission and organisational goals of NPOs and accordingly
influence the delivery of the services.
The nested conceptualisation of the organisational subsystems and multiple layers of
environmental systems indicate that change in any part of the system can lead to change for
the NPO and can radically affect the way NPOs function and manage. While the CEO acts as
the boundary spanner within the organisation, the board also acts as a boundary spanner,
linking the organisation and the environmental system. The organisational vision, mission,
goals and values should mandate the boundary spanning. The board and the CEO through
their boundary-spanning role should contribute to managing environmental uncertainty and
protect the core (staff and services) from undue disruption by removing the need for it to
interact directly with the environment. The ecosystem model of NPO management is a
helicopter view of the management of NPOs in their interconnected and multilayered reality.
However, it is also helpful to appreciate that no theory, concept, model or approach can
consider all influencing factors, and the complexity of NPO management requires that we
develop broad perspectives such as the ecosystem model developed in this study.
6.6 Limitations of the Study

The aspirations of a PhD thesis are always constrained by the limited resources available, and
this thesis is no exception. Unfortunately, but inevitably, this thesis has all the shortcomings
of a PhD project—an under-resourced and inexperienced researcher who has attempted to
tackle a complex task of combining two disciplinary subjects: management and social work.
This study has a number of possible limitations. The study attempted to develop an
understanding of the management of NPSSOs in Aotearoa New Zealand. While the NPO
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sector in Aotearoa New Zealand consists of both expressive and service organisations, this
study focused only on NPSSOs that were registered as a charity under the Charities Act 2005.
While the findings may provide some insights into the management of NPOs in general and
may assist other types of NPOs to understand how they manage their board, service delivery,
human resources and finance, the findings are mainly limited to social service organisations.
While the findings of the study may be useful to NPOs in other countries, its generalisation is
limited to New Zealand NPOs. The relatively small sample size (N = 65) of this study has
limitations to the generalisability of the findings. While the intended sample size was 16% of
the population, the study was only able to collect data from 28% of the intended sample size.
However, this response rate was similar to the response rate of surveys conducted among
NPOs in New Zealand. Furthermore, the inclusion and exclusion criteria set for the study to
achieve the purpose of the study could have prevented many organisations from participating
in this study. This research used a cross-sectional survey and thus gathered data prevailing at
that time.
The study has used an anonymous self administered survey for data collection to make the
study feasible in terms of cost, time and geographical access to organisations. The
confidential nature of the survey also helped to minimise the social desirability bias.
However, the method of data collection prevented the researcher following up on participant
responses and getting additional comments on the management of board, service delivery,
staff, volunteers and finance. While alternative data collection methods such as an interview
may be helpful in clarifying the participant responses, the reponses could be influenced by
social desirability biases and do not gurantee any additional information. Moreover, the
constraints of a PhD project in accessing the resources to conduct a large-scale survey were
also a limitation of this study.

210
The research involved studying the management of indigenous Māori organisations, and the
questionnaire used to measure the management practices were mainly drawn from non-Māori
sources and probably reflected a Eurocentric view on non-profit management. There is not
enough indigenous research on the management of Māori social service organisations, and the
research had to rely on generic management practices heavily influenced by Western
Eurocentric management perspectives. While the Māori organisations that participated in this
study self-identified themselves as Māori organisations and voluntarily participated in the
study, a provision was included in the questionnaire to indicate whether any particular
management practice standard was not applicable to the organisations and to comment on this
further. However, no Māori organisations selected this not applicable option, thus indicating
that the suitability of the management practices applied to them as well. Nevertheless, it has
to be acknowledged that the measurement of variables in this study might not have reflected a
Māori world view or values. As I am non-Māori, I obtained specific cultural advice from
Māori in this project to minimise any cultural bias I had. The cultural advice obtained from
two Māori advisors helped me to verify the cultural appropriateness of the research and
confirm the cultural meaning of the Māori concepts and terms I used in this study.
Understandably, this thesis will not be the last word on the issues that it addresses, and in
many instances, it asks more questions than it could ever hope to answer.

This chapter discussed the results of the survey conducted among NPSSOs in Aotearoa New
Zealand to develop an understanding of the management of the board, service delivery,
human resources and finance. Based on this discussion, a management self-assessment tool
was developed for NPOs to assess their management practices. Based on the findings on the
relationship between organisational management elements, this chapter presented an
ecosystem non-profit management model to develop a comprehensive view of the non-profit

211
management. This model was developed by combining the systems thinking conceptual
framework used in the study and the environmental lens that emerged from the literature
review. This chapter also discussed how NPOs demonstrate their commitment to te Tiriti o
Waitangi. The chapter ended with a discussion on the limitations of the study. The next,
concluding chapter discusses the overview of the study and the implications of this research
for management theory, practice, research, education and policy. It then finishes with
suggestions for future research and a final reflection on the research process.
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CHAPTER 7: CONCLUSION
As those who have come before us have said “Nā tōu rourou nā taku rourou ka ora ai te iwi”.
If I share what I have and you share what you have, then all of the people benefit
(Whakataukī—Māori proverb).
NPSSOs are a very important aspect of New Zealand society, and more and more New
Zealanders are relying on these organisations for their health and well-being needs. Despite
their growing presence and importance, NPOs face significant challenges that threaten their
growth and survival, and will have an impact on the health and well-being of New
Zealanders. Proper management of NPOs and their resources is more important than ever
now. Within this context, the overall purpose of this cross-sectional quantitative study was to
develop an understanding of how NPSSOs in Aotearoa New Zealand manage their board,
service delivery, human resources and finance, and maintain their commitment to te Tiriti o
Waitangi. To develop this understanding, this study sought to examine the relationships
between the management of the board, service delivery, human resources and finance and to
investigate whether there was any difference between Māori and non-Māori organisations in
their management of these organisational elements. To help with this enquiry, systems
thinking was employed as the conceptual framework because NPOs are considered open
systems with interdependent parts continually interacting with their task environments. The
following picture of the management of NPSSOs emerged from this enquiry.
The evidence from this research suggests that the management of the board, service delivery,
human resources and finance is a significant issue for NPSSOs in New Zealand irrespective of
the organisations’ cultural identity as Māori and non-Māori organisations because both
demonstrated a borderline management practice and presented a medium risk. Because of
this, the NPOs should examine their management practices in order to improve them and
213
become critically reflective learning organisations to achieve their organisational mission. A
reliable and valid management self-assessment tool was developed for this purpose of self-
assessment (see Appendix 1). An examination of the relationships between the management
of the board, service delivery, human resources and finance found that the systems thinking
proposition about the relationships between these four organisational elements needs to be
approached with caution as they are a matter of comparison and they vary significantly based
on organisational identities, such as Māori and non-Māori organisations. The role of the CEO
emerged as a potentially significant influence on these relationships between these
organisational internal elements. This shows that a simple systems thinking conceptual
framework is no longer sufficient to understand the management of NPOs, especially when
they operate in a complex task environment characterised by a neoliberal and NPM approach
to social service delivery. As systems thinking is no longer sufficient, there is a need to
reconceptualise NPO management in a way that acknowledges the interrelated organisational
elements of internal functioning and the influence of the external task environment.
Accordingly, an ecosystem non-profit management model was developed to offer a
comprehensive view of non-profit management. This model was developed by combining the
systems thinking conceptual framework used in the study to understand the internal
management of NPOs and the environmental lens that emerged from the literature review. As
evident in the suggested model, NPO management is a complex phenomenon that consists of
the management of internal organisational elements and the organisation’s interactions with
the external environment. The CEO and the board acting as boundary spanners of the NPOs
link the organisation to the multiple systems in their task environment in order to be adaptable
to the changes in the environment. As the non-Māori NPOs struggled with demonstrating
their commitment to te Tiriti o Waitangi, this thesis also argues that they need to develop their
cultural competence as organisations to be a culturally accountable organisation. This

214
understanding on the management of NPOs has implications for theory, practice, research,
policy and education.
7.1 Implications for Theory and Research

This research has confirmed that although a matter of comparison, there is a relationship
between the organisational elements of management and that practices in one area of
management affect the other areas, offering a useful insight into the NPOs’ functioning and
internal management. However, this research has also argued that to understand the complex
nature of NPO management, a simple systems thinking approach is not sufficient because
their multilayered complex environment heavily influences the NPOs. Therefore, the
ecosystem model of management developed in this study has implications for theory and
practice. It offers a relatively simple view of NPO management without losing its complexity.
This model conceptualises the interaction between the complex multilayered environmental
context and interrelated internal organisational elements in an easily understood visual
diagram and offers a framework for scholars, practitioners and policy makers interested in
non-profit management. This model suggests that any research examining the comprehensive,
holistic nature of non-profit management should consider both the internal management and
the external environment and the exchange that happens between these two. This offers an
objective, value-neutral view on non-profit management. From a research viewpoint, this
study also offers four empirically tested and reliable management rating scales to assist future
researchers who want to research on the management of NPOs.
7.2 Implications for Practice

This study offers insight into the management of the board, service delivery, human resources
and finance, and indicates that NPOs need to improve their management of the board, service
delivery, human resources and finance because the organisations in this study demonstrated
215
less than ideal management practice and were at risk, and suggests that NPOs need to be
critically reflective learning organisations. Rather than merely pointing this out, this research
offers a valuable self-assessment tool for NPOs to review, reflect and act on their
management practices. It is expected that the self-assessment tool will help the NPOs to
understand the recommended practices of management in relation to the board, service
delivery, finances and human resources, and to develop an understanding of what good
management could look like. As the majority of the organisations that participated in this
study struggled with their management practices, this could be a wider issue in the sector, and
the findings may apply to many organisations. Therefore, it is of paramount importance for
boards, CEOs and staff to sit together and engage in a critical reflection on their management
practices by using tools such as this so that they can appreciate the strengths and weaknesses
of their management practices and put strategies in place to develop their capacities to
manage the organisations in an ever-changing, complex and uncertain environment. This will
also help them to understand the importance and processes of organisational change and
articulate their role in this change. As the non-Māori organisations struggled to demonstrate
their commitment to te Tiriti o Waitangi, there is a need for cultural education for those
organisations so that they can understand the significance of te Tiriti for their organisations
and learn how to incorporate the articles and practices into the organisational management to
be a culturally competent organisation and to demonstrate cultural accountability.
7.3 Implications for Policy

During the period of this research, successive National governments governed New Zealand,
and their approach to the non-profit sector was characterised by a neoliberal ideology and
NPM approach to service delivery. Towards the end of this research, in October 2017, a new
Labour-led coalition government was formed after the 2017 general elections and the
implications of this huge change for the non-profit sector are yet to be known. The evidence
216
from this research on the historical context of the NPO sector suggests that NPOs face
significant change and organisational challenges whenever there is a change in government.
NPOs have been facing significant challenges such as lack of adequate funding that emerged
from government policy. As a result, NPOs struggle with their internal management and need
to work on building their management capacities. As most of the NPOs rely on government
contracts for their functioning, new contractual arrangements should consider the capacity
building needs of NPOs in terms of management and commitment to te Tiriti o Waitangi. This
study has suggested that the external environment, especially the microsystems, are heavily
influenced by government funding and regulatory bodies, and they have a significant impact
on how NPOs are managed. The literature suggests that this relationship is tense now and the
new government could potentially ease the pressure on NPOs in terms of contractual
arrangements, compliance and letting them follow their mission rather than government
agendas.
7.4 Implications for Education

There is a general tendency to undervalue the importance of organisational management in
social work education. When organisational management issues are addressed in social work
education, the focus is on teaching generic management skills without acknowledging the
difference in the organisational contexts. This also evident in the textbooks on social work
management. This tendency to focus on generic management should be revisited in
educational programmes because, as this research has argued, NPOs are a different set of
organisations from government and commercial organisations because they have multiple
bottom lines. Management approaches developed in the public sector and the commercial
sector are not appropriate for the non-profit sector due to their value orientation and mission-
driven nature. Moreover, the management programmes offered in New Zealand management
schools focus on business management and do not deal with non-profit management. No
217
specific non-profit management programmes are available in New Zealand at the time of
writing, leaving a significant gap in the management education. Although there are private
consultants who run small professional development training programmes, the absence of
tertiary programmes in non-profit management undermines the importance of non-profit
management as a discipline. Since NPOs struggle with their management and need to develop
their management capacities, this gap should be addressed with priority by the educational
organisations.
7.5 Recommendations for Future Research

In general, there is a scarcity of research on non-profit management in New Zealand and more
research in this area is needed to bring diverse perspectives on NPO management. While this
study provides a new model of non-profit management, there is a need for more
comprehensive empirical research on the impact of the external environment on
organisational strategies and structures, especially given the rapid changes in those
environments. The impact of government policies on organisational standardisation would be
an interesting topic to investigate. More research should also be conducted on how NPOs
manage their interactions with the various layers of the external environment. As this study
suggested a difference in management between Māori and non-Māori organisations, more
research is needed on the value differences in management. Kaupapa Māori research on
Māori NPOs could explore the particular cultural values and practices that guide their
management. Māori-initiated kaupapa research could also provide an indigenous view on
Māori management in NPOs. More qualitative research is also needed to explore managers
and boards’ views on their subjective management experiences. Also, detailed case study and
narrative research could provide a detailed comparative account of the organisational
management in NPOs with different sizes and annual budgets. This study has demonstrated a
strong female domination among boards, staff and volunteers, and more study is needed to
218
understand the impact of gender differences in management. The research also identified the
role of CEOs in being the boundary spanner, and more research is needed on their role and
influence in the management and success of NPOs. This study focused on only four key areas
of non-profit management, but there are a number of other dimensions, such as marketing,
and further research on NPOs’ market orientation in a contracting environment could be
useful. This research focused on the management processes related to board, service delivery,
human resources and finance rather than managerial issues such as staff burnout and high
CEO turnovers. While these issues are relevant to NPOs, they are exploratory and explanatory
in nature rather than descriptive. As these issues were not related to the purpose and the
questions of this research, they were not within the scope of this research although they are
valid concerns among NPOs. These are certainly areas of further research and both qualitative
and quantitative studies in this area could offer further insights into the wider non profit
management scholarship.
The ecosystem model of non profit management presented in this study identifies CEOs and
Board as boundary spanners of their organisations linking NPOs with external micro,meso
and macro systems by using feedback from both external and internal systems. However,
within the context of non profit social service organisations in Aotearoa New Zealand, this
process is largely reactive than proactive. As NPSSOs are required to align their management
processes in accordance with contracting and legal requirements, they are forced to engage in
a reactive way and do not have the power to engage in a proactive way. As NPSSOs focus on
delivering direct services as part of their contract with government agencies, they do not
consider proactive behaviours such as advocacy and lobbying as their primary function and
engage in them directly. Most of the NPSSOs associate with national umbrella organisations
such as Hui E who are engaged in proactive behaviours such as adovocacy and lobbying for
the non profit sector on behlaf of NPSSOs. However, this was not within the scope of this
219
research and further qualitative research is required to understand the proactive behaviour of
national umbrella organsiations. Further research in this area could provide more insights into
the proactive nature of NPOs.
7.6 Final Reflection

As a professionally trained social worker, it is essential that I reflect on my PhD journey. This
research has informed me about the role and scope of NPOs in our society and the economic
and social value they add to the society. It has also taught me about the enormous challenges
they face in addressing the diverse welfare needs of New Zealanders. I learned so much about
the non-profit sector in New Zealand, but more importantly, this journey also taught me to
how to do research and how not to do research. I had many “aha” moments during this
journey, and I also faced significant challenges. However, finishing the thesis taught me how
to be a resilient researcher, just like how resilient the NPOs are. I finish with a newfound
appreciation for the non-profit sector in New Zealand. Despite the challenges they face, most
of them tend to stick around somehow to enlarge people’s choices in life and to support their
health and well-being. The survival of the non-profit sector is critical to every aspect of
human existence, and this research was a modest attempt to contribute to the wealth of
knowledge and skill in the non-profit sector.

220
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Appendices
Appendix 1: NPO Management: Self-Assessment Tool

How to use the tool
This management self-assessment tool consists of four three-point (Always, Sometimes, or Never) rating
scales providing statements about the management practices related to four key areas of non-profit management:
board (30 statements), service delivery (12 statements), human resources (28 statements) and finance (20
statements). The rating points are assigned a numerical score (Always=4, Sometimes=2 and Never=0) to
calculate the organisational risk in each of these management areas. The most useful way to use this tool is to
complete it in a 2-3 hour workshop meeting, with input from the board, Chief Executive Officer, staff and a
selection of volunteers. Taking each statement of management practice, in turn, discussing whether it is true, or
is in place, or happens in the organisation and providing a score based on the extent to which the organisation
follows each management practice in respective areas (4= Always, 2= Sometimes and 0= Never). An agreement
is needed on a score based on what actually happens, not on what is supposed to happen, or what is documented
in organisations’ policies and manuals. After scoring every statement in each area, the next step is to add up the
total for each rating scale and calculate a summary rating by dividing the total score by the number of items in
each rating scale. Transfer the total score and summary rating into the three-level management practice and risk
level table (Poor practice & High risk, Borderline practice & Medium risk and Good practice and Low risk) as
per the score interpretation table available after the scales. Scores between 0-50 percentage of the maximum
score obtainable are considered as poor practice and high risk, 51-75 percentage regarded as borderline practice
and medium risk and 76-100 percentage are considered as good practice and low risk (refer to the table for the
scores for each scales). Organisations can then prepare a visual diagram of the management practice and risk by
plotting the summary score of each scales into the management profile-plotting sheet provided at the end of this
tool. While the rating scores give an indication of how well the organisation manages its board, service delivery,
human resources (staff and volunteers) and finance and the management risks they carry, the real value in this
exercise is the conversations and the details of issues discussed in the organisation and the action taken on their
management practices. The results of this assessment also can be used in the organisational strategy building
exercises.
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Board Management Rating Scale (Always=4, Sometimes=2, Never=0)
No Board management practices Rating

(4, 2 or
0)
1 The board ensures that it is focussed on organisational governance to realise the
organisational vision, mission, values and goals and the manager/CEO is focused on day to
day operations of the organisation
2 The board acts as leaders and governing trustees of the organisation on behalf of the
community while carrying out organisation’s mission and goals
3 The board deals with strategic issues and supports the chief executive to carry out his/her
operational functions
4 The board ensures that it meets its obligations as a legal entity and receive legal advice
when necessary
5 The board attempts to maintain a positive relationship with the key stakeholders in the
organisation's field of practice
6 The board evaluates the performance of the CEO/manager at regular intervals in relation to
previously determined set of expectations
7 The board ensures that it has at least the minimum number of members as required by their
bylaws or the law
8 The board follows its rules and regulations when it appoints and terminates members from
the board
9 The board's nomination process ensures that the board remains appropriately diverse and
non-discriminatory reflecting the community and service users with respect to gender,
ethnicity, culture, economic status, age, disabilities and skills or expertise
10 All the new board members go through an orientation process to learn about organisational
vision, mission, values, goals, bylaws, policies and services
11 All the board members are aware of their roles and responsibilities and carry out their duties
according to the board operations manual
12 All the board members receive regular ongoing training and information about
developments in the non-profit sector
13 The board maintains a code of ethics and conduct and follows them when necessary
14 The board follows their attendance policy strictly when it makes policy decisions
15 The board members receive agendas and materials relating to significant decisions in
advance of their board meeting
16 The board handles urgent matters between its meetings as they arise
17 The board maintains a conflict of interest policy and make sure that its members comply
with the policy
18 The board maintains and strictly follows a policy of prohibiting employees and members of
their immediate families from serving as board chair or treasurer
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19 The board ensures that it reviews the risk at regular intervals and organisation has adequate
insurance policies to cover loss, damage to people, equipment, and buildings.
20 The board follows a formal process of communication between the board and the operations
21 The board forms or reviews the organisational strategies by reviewing its mission and vision
based on a detailed analysis of external environment
22 The board plans and develops the organisational strategies by consulting the staff on
matching the external environment and the internal competencies
23 The board ensures that the organisational vision remains current and reflects the desired
state of the change agreed by all members of the board
24 The board ensures that the organisational mission statement provides a time frame and clear
strategies to achieve the vision
25 The board ensures that the goals of the organisation clearly communicate the organisation's
purpose and services to meet community needs.
26 The board ensures that, by soliciting community input, its mission and activities remain
valid and provide benefit to the community in a culturally competent manner
27 The board with the assistance of staff converts the organisational strategies to achievable
annual plans till the next round of strategic planning process
28 The strategies/annual plans establish an evaluation process and performance indicators to
measure the progress toward the achievement of goals and objectives
29 The board ensures that through work plans, human and financial resources are allocated to
ensure the accomplishment of the goals in a timely fashion
30 The board communicates the organisational strategies/annual plans to all stakeholders:
service recipients, board, staff, volunteers, funding partners, and the general community
Total board management score (Add together the rating of 30 statements)
Summary rating (Divide the total score by 30)
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Service Delivery Management Rating Scale (Always=4, Sometimes=2, Never=0)
No Service delivery management practices Rating

(4, 2 or 0)
1 The service delivery planning is conducted by the staff under the guidance of the
executive director/manager in accordance with organisation’s vision, mission, goals,
and values
2 The annual service delivery planning begins with the review of the last year’s
performance and finishes with the plan for the next year
3 The organisation uses national and international research to keep up-to-date with the
latest developments in their field of practice to inform its service delivery planning
4 The annual service delivery planning clearly identifies the human and financial
resources required to deliver the services to meet organisational goals
5 Clients and potential clients have the opportunity to participate in service delivery
planning
6 The organisation carefully considers issues related to culture in its service delivery
planning
7 The service delivery planning predicts output, outcome, impact, efficiency, and
quality assurance for each service and develops performance measures to verify them
8 The organisation develops a service delivery plan with time frame for each of its
programmes/services to track its progress
9 The planning gives adequate attention to matching the work to be done and the
competency to do the work in terms of staff training and capacity building
10 The organisation provides necessary training for the staff to implement new
programmes and services.
11 The organisation conducts periodic monitoring of each programme/service to ensure
its effectiveness and efficiency including service user satisfaction surveys
12 The organisation evaluates each programme/service to establish its outcome and
impact and to comply with all internal and external reporting requirements
Total service delivery management score (Add together the rating of 12 statements)
250
Human Resource Management Rating Scale (Always=4, Sometimes=2, Never=0)
No Staff management practices Rating

(4, 2 or 0)
1 The organisation fills the vacant positions promptly to prevent interruptions to
services delivery and ensure fair workload
2 The organisation follows non-discriminatory hiring practices
3 The organisation recruits staff through a competitive recruitment process
developed and guided by human resource professional
4 The organisation provides clear job descriptions that provide details such as
qualifications, responsibilities, reporting relationships, performance indicators and
review when it recruits staff members
5 The organisation offers a competitive remuneration plan to all employees in
accordance with their qualifications and experience and conducts a periodic
review of salary ranges and benefits
6 The organisation provides an induction programme for all the new staff regarding
its vision, mission, values, policies, and procedures
7 The organisation ensures that all the board members and staff have access to the
written personnel policy and they follow the policies
8 The organisation follows a systematic and fair method for the assignment of new
or existing staff to specific jobs to protect their workload
9 The CEO/Manager carefully reviews and responds to ideas, suggestions,
comments, and perceptions from all staff members
10 The organisation supports and provides opportunities for meeting employees'
professional development needs
11 The organisation supports all the professional employees such as social workers
and counsellors to become members of their respective professional bodies
12 The organisation supports all the professional employees such as social workers to
obtain necessary registration and maintain their annual practising certificates
13 The organisation maintains contemporaneous records documenting staff time in
program allocations
14 The organisation follows a clear and fair policy and process for managing all the
workplace conflicts and complaints
15 The chief executive officer/manager or their delegated authority conducts and
documents employee performance appraisals of all the staff annually
16 Individual employees are acknowledged and rewarded for their outstanding
contribution to the organisation’s activities
Total Staff Management Score (Add together the rating of 16 statements)
251
No Volunteer management practices Rating

(4, 2, or 0
1 The organisation defines a clear purpose for all the volunteer jobs in volunteers
within the organisation
2 The organisation provides well-explained job descriptions for all volunteer positions
in the organisation
3 The organisation actively recruits volunteers according to a well-defined volunteer
management plan
4 The organisation follows a volunteer recruitment policy that does not discriminate,
but respects, encourages, and represents the diversity of the community
5 The organisation provides appropriate training and orientation to the agency to
assist the volunteer in the performance of their volunteer activities and offers
training with staff in such areas as cultural sensitivity
6 The organisation is respectful of the volunteer's abilities and time commitment and
has various job duties to makes sure that jobs are not given to volunteers simply
because the jobs are considered inferior for paid staff
7 The organisation periodically evaluates each volunteer’s engagement with the
organisation to understand the strengths and weaknesses of its volunteer programme
8 The organisation does some type of volunteer recognition or commendation
periodically, and staffs continuously demonstrates their appreciation towards the
volunteers and their efforts
9 The organisation proactively responds to the ideas, suggestions and comments from
volunteers
10 The organisation provides opportunities for program participants to volunteer
11 The organisation maintains contemporaneous records documenting volunteer time
in program allocations
12 Financial records are maintained for the volunteer time spent on programs and
recorded as in-kind contributions
Total volunteer management score (Add together the rating of 12 statements)
252
Financial Management Rating Scale (Always=4, Sometimes=2, Never=0)
No Practices of financial management Rating

(4, 2 or 0)
1 The CEO/Manager consults all the staff to prepare budget to make sure that the budget
meets service delivery plan requirements
2 The final annual budget clearly identifies the income, various expenditures and
overheads approved by the board
3 The organisation allocates specific roles for board and staff members in fundraising
4 The organisation ensures that funds are raised in an ethical manner consistent with the
organisation’s values and goals
5 The CEO/manager prepares monthly/quarterly cash flow projections and communicates
this to the board
6 The organisation follows accounting practices which conform to accepted standards
7 The organisation records the details (date, description, amount etc.) of its transactions
(payments and receipts) in cashbooks according to the standard chart of accounts
8 The organisation ensures that entries in the cash books are cross-referenced to a
supporting evidence
9 The CEO/Manager checks the cash book every month and confirms that the
transactions are coded as per the cost centres
10 The organisation keeps track of amounts owed to others (e.g., suppliers) and owed by
others (Eg; staff, contracts payments etc.)
11 The organisation ensures that the expenses are properly authorised and approved by a
designated person before payment is made
12 The organisation ensures that bank reconciliations are checked by someone who did not
prepare them
13 The organisation ensures that statutory deductions (payroll taxes, superannuation
contributions etc.) are properly made and paid on time to comply with its tax
obligations
14 The organisation controls all the items owned by a fixed assets register for reducing
loss and risk
15 The organisation ensures that it has adequate insurance coverage to minimise
organisational risk and liabilities
16 The organisation periodically forecasts year end revenues and expenses to assist in
making sound financial decisions during the year
17 The organisation remains accountable to funders by providing financial statements as
per the funding agreements
18 The organisation demonstrates their accountability by sharing its financial information
with the community and the regulatory bodies
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19 The organisation renegotiates its contracts for services regularly (and before the
contract expiry date) to reflect current costs and service needs identified in the
community
20 The organisation ensures that staff and board members dealing with financial matters
receiving appropriate training
Total financial management score (Add together the rating of 20 statements)
Summary rating (Divide the total financial management score by 20)
Score Interpretation
Transfer the total score and summary rating for each scale into the table below, record the management
practice, and risk level as per the scoring scheme on the management practice and risk table provided. If
organisations received, poor practice and high-risk rating in any of the management practice areas, it indicates
serious problems with the management of that areas and board and the CEO should meet to discuss how the
management can be improved. If the practice is borderline and risk is medium, the board and CEO still needs to
discuss how the management practices in those can be improved. If the practice is good and the risk is low,
immediate discussion is not needed, but still, may need to make improvements and further reduce the
organisational risk.
Dimension Total score Summary Practice

rating & Risk level
Board management
Service delivery management
Staff management
Volunteer management
Finance management
Total Human resources management
(Staff management + volunteer
management)
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Management practice & Risk level table
Dimension Poor practice Borderline Good practice

& practice & Low risk
High risk &
Medium risk
Board 0-60 61-90 91-120
Service delivery 0-24 25-36 37-48
Staff management 0-32 33-48 49-64
Volunteer management 0-24 25-36 37-48
Total human resource management 0-56 57-84 85-112
(staff management+ volunteer management)
Finance 0-40 41-60 61-80
Overall management 0-180 181-270 271-360
Management Profile Plotting
Based on the summary rating calculated for each management areas, NPOs can prepare a management
profile plot to visualise their management practice and risk level. A management profile-plotting sheet is
developed for NPOs to use and is demonstrated in figure 6.3. The management profile-plotting sheet consists of
four axes: board management, finance management, service delivery management and human resource
management. A visual management overview can be created by plotting the summary rating (0-4) of each
management scale on to the corresponding axes of the profile plot and drawing a line to connect each point on
the axes. This will give a learning profile for the organisation on their management practices and organisational
risk. Figure 1 displays an ideal management profile plot where the summary rating for each axes is four. When a
line is drawn to connect each point on the axes, it presents a very balanced management profile. If organisations
have different levels of risk in each area, then the plot will demonstrate an unbalanced management profile as
can be seen in figure 2 In this example, the board management is at high risk, service delivery management is at
low risk, human resource management at high risk and finance management at medium risk demonstrating an
unbalanced, non-ideal management profile. The aim of management should be achieving a profile plot as
visualised in figure 6.3 so that the organisations are at low or no risk in terms of their management practices.
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Figure 1.. Balanced and ideal management profile plot
Note: if the NPO does not have any volunteers, replace the human resource management summary rating with
staff management summary rating to create the profile.

256
Figure 2. Unbalanced Management Profile Plot

257
Appendix 2: Ethics Approval Letter

258
Appendix 3: Research Information Sheet
College of Arts
Albert Kuruvila
PhD Candidate
Social Work and Human Services Programmes
Social of Social and Political Sciences
Private Bag 4800
Christchurch 8140
Tel: +64 3 3642 987, Fax: + 64 364 2498
Email: [email protected]
Subject: Invitation and Information Sheet to Participate in PhD research project
Dear
Greetings and Peace!!!
Your organisation is invited to participate as a subject in the research project: A Study on the
Management of Non-Governmental Social Service Organisations in New Zealand. The project
is being carried out as a requirement for the degree of Doctor of Philosophy (PhD) in Social
Work in the University of Canterbury by Albert Kuruvila under the supervision of Dr. Annabel
Taylor (senior supervisor) and Dr.Andrew Frost (associate supervisor).
The aim of this project is to describe and analyse the management practices of nongovernmental
social service organisations in New Zealand to understand and investigate how well they
manage their board of governance, strategic planning, human resources, finances, service
delivery, and networking. I hope that the results of the study will help us to understand better,
how these organisations are being managed and improve the performance of the sector to help
and empower individuals and communities in New Zealand.
Your involvement in this project will be providing information about the management practices
of your organisation as a manager/ board member. The information will be collected through
an anonymous questionnaire, and you or your organisation will not be identified as a participant
in the study without your consent. The project does not seek any personal information about
you, any other staff, the board of directors and volunteers since the unit of the study is the
organisation you represent not the individuals. The time required for responding to the
questionnaire is calculated as approximately 2 hours. The organisation’s participation is
voluntary, and as a participant, you have the right to withdraw from the project at any time,
including withdrawal of any information provided; without any consequences, until your
questionnaire has been added to others collected. Because it is anonymous, it cannot be
retrieved after that. Please note the code number on the questionnaire and quote this number if
you decide to withdraw at from the project after returning the questionnaire.
259
In the performance of the tasks and application of the procedures, there are no risks to your
safety and health, and you will not be subject to any experiments.
In return for this participation, the organisation will be able to receive an electronic copy of the
report from the University of Canterbury library database after the thesis examination. I believe
that the research tool has potential to help your organisation in self-assessing the practices in
governance and management and will examine any issues of concern for better performance
and management.
The results of the project may be published, but you may be assured of the complete
confidentiality of data gathered in this investigation. The identity of participants will be
unknown through the entire process of the research. To ensure anonymity and confidentiality,
the questionnaire will ask neither the organisational details nor the l details of the person filling
the questionnaire. Since the research aims to see the general patterns, the data will be
generalised, and no individual organisation will be named in the results. Only I, and my
supervisors, will have access to the information about the organisation. The questionnaire will
be kept in a locked cabinet at University of Canterbury in accordance with the Privacy Act
(1993) and will be destroyed after the degree is awarded. Electronic data will be kept for 10 years
in password-protected computers and then will be deleted from the researcher’s home computer,
work computer and any other storage devices. The hardcopy and electronic copy of the thesis will
be deposited in the library of University of Canterbury, Christchurch. Please note that the PhD
thesis is a public document via the University of Canterbury library database and anyone who
searches the database will have access to the thesis report.
By completing the questionnaire, it will be understood that you have consented to participate in the
project, and that you consent to the publication of the results of the project with the understanding
that anonymity will be provided. As it is an anonymous questionnaire, there is no consent form to
complete.
If you have any questions or want more information, I request you to contact me at the phone
numbers below or by email. If you have any concerns about your rights or treatment in this research,
you may contact my supervisors at 03-3642444(Dr.Annabel Taylor) and 03-3642987 ext 8449
(Dr.Andrew Frost).They will be pleased to discuss any concerns you may have about
participation in the project.
The project has been reviewed and approved by the University of Canterbury Human Ethics
Committee.
I request you to return the completed questionnaire within four weeks in the postage prepaid
envelope enclosed with this letter.
Thank you for your valuable time and help with the research project.
Kind Regards,
Albert Kuruvila
PhD student, School of Social and Political Sciences, University of Canterbury
Private Bag 4800
Christchurch 8140
Ph : 03- 3642987 ext-3485 (office), 03-3572582 (Home) : 0211058274 (Mobile)
Email: [email protected] or [email protected]
260
Appendix 4: Data Collection Instrument- Questionnaire

QUESTIONNAIRE
Title of the Project: A Study on the Management of Non-Governmental Social Service
Organisations in New Zealand.
Code No:
Please read the following note before completing the questionnaire.

The following inclusion and exclusion criteria are set for this study to meet the objectives of
the study and the valid and reliable measurement of the phenomena under study. The
organisations are requested to ensure that they meet the criteria to participate in the study
before answering the questionnaire.
Inclusion Criteria
 a registered charity under the provisions of Charities Act 2005

 incorporated either under the Incorporated Societies Act 1908 or the Charitable Trusts
Act 1957
 an operating age of at least three years as on 31 March 2010
 employing at least three full-time equivalent (FTE) staff16
 an annual income between NZ$300,000 and NZ$1 million.
Exclusion Criteria
 Membership-based Māori organisations will not be considered for the study unless
their primary activity is social service to the Māori population.
Disclaimer: The questionnaire is designed to collect accurate and authoritative information

regarding the governance and management of Non-Governmental Organisations in New
Zealand. Legal requirements and practice standards stated are capable of change due to new
legislation. All stated legal aspects are in effect as of December 30, 2012. The self-assessment
nature of this questionnaire can be utilized with the understanding that the provision of this
questionnaire does not constitute professional legal and tax advice or other professional services.
The questionnaire has been prepared based on the detailed review of the following guidelines,
reports, and materials.
16FTE is the sum of all full-time employees plus half the number of part time employees. The FTE was calculated on the
basis that two part-time employed people are equivalent to one full-time employed person.
261
1) Checklist of Non Profit Organisational indicators edited by Carter McNamara

published by Greater Twin Cites United Way, USA (year not known)
2) Self-Assessment Tool for organisations edited by Fay Freeman and Sandy Thompson
under SCOPE project funded by Tindal Foundation, NZ ,2005
3) Mango’s Financial Health Checklist published by Mango, UK, 2009.
4) Grant Thornton Not for Profit Survey 2009/2010 published by Grant Thornton NZ,
2009.
5) Defining the Non Profit Sector: New Zealand by Margaret Tennant, Jackie Sanders,
Michael O’Brien, and Charlotte Castle published by The John Hopkins Centre for
Civil Society Studies, Baltimore, 2006.
6) A Handbook of NGO Governance by Marilyn Wyatt published by the European

Centre for Not-for-Profit Law, Budapest, Hungary, 2004.
7) Tax Information for charities registered under the Charities Act 2005 (IR 256), Inland
Revenue, April 2009.
How to use the Questionnaire?
The questionnaire consists of both open-ended and closed-ended questions under each
management practice areas, such as the board of governance, human resource management,
financial management, service delivery and networking. These questions are followed by a
box of statement of management practice defined in a three-point rating scale, which
represents what is required to have a healthy, well governed, and managed organisation. Each
of the statements asks the organisation to rate or judge its performance in specific areas of
governing/managing the organisations.
The organisation can rate their score to the following ways to each statement of practice
according to what actually happens in the organisation, not what is supposed to happen. Rate
the organisation’s current practice against each of the best practice statements as honestly and
accurately as can. Enter the rating in the box.
 Rate 4 if the organisation has the practice stated always in its operations
 Tick the box 2 if the organisation has the practice stated sometimes in its operations
 Tick the box 0 if the organisation never has the best practice stated in its operations
Some practices may not be applicable to some organisations or may be unaware of the
application to its operations. Please enter N/A or unsure appropriately.
262
SECTION A: GENERAL PROFILE OF THE ORGANISATION (Please tick relevant

box or circle)
1) Geographical area of operation: Auckland Wellington Christchurch
Other (Please specify):
2) Type of operation : A) National with regional office B) Regional only (specify)

___________________ C) Local community groups
3) Year of Establishment: A) Before 1980 B) Between 1980-1990 C) Between 1991-2000 D)

Between 2001-2005 E) Between 2006-2010
4) Sector of operation : A) Health B) Disability services C) Family and child

development D) Community development E) Youth services F) Mental health
G) Domestic Violence H)Other (please specify) ___________________
5) Type of registration:
A) Incorporated society under the Incorporated Societies Act 1908 B) Charitable society
and Trust under the Charitable Trusts Act 1957
6) Does the organisation identify itself as a Māori /Iwi social service organisation? Yes No
6A) If the organisation is a Māori organisation, do you operate as a Māori Trust under the
Māori Trust Board Act 1955? : Yes No
7) Primary beneficiaries of organisation : A) Māori/iwi groups B) Pacific people

C) Asian people D) People of any culture
8) Year of registration under the Charities Commission:
9) Does the organisation have submitted annual returns with supporting financial reports to
Charities Commission? : Yes No
10) Did the organisation submit an annual report and audited financial statements for the last
3 years to either Registrar of Incorporated Societies or trusts (please circle)? :Yes No
263
11) Does the organisation obtain the following tax-exempt status from IRD?
A) Non -business income tax exemption : Yes No
B) Business income tax exemption : Yes No
C) Gift duty exemption : Yes No
D) Donee status : Yes No
E) Resident withholding tax (RWT)-certificate of exemption: Yes No
F) Fringe benefit tax (FBT) exemption : Yes No
12) Did you file tax reports to IRD on a regular basis such as Employee Registration form (IR
345), Employee Deduction form (IR 345) etc ? Yes No
13) Does the organisation registered for Goods and Service Tax (GST) with IRD? Yes No
14) Does the organisation offers Payroll giving through PAYE tax system? Yes No
15) What is the Annual Budget of the organisation A) $ 300,001 -$ 500,000 B) $500,001-
$ 700,000 C) $ 700,001-$1 Million
16) Number of Paid Staff : 16A) Full time - 16B) Part time-
17) Number of Volunteers : 17A) Full time - 17B) Part time-
18) Number of Governing Board Members:
19 ) Governing body members: A) Male: B) Female:

264
SECTION B: GOVERNANCE AND ROLE OF BOARD OF DIRECTORS (Please tick

relevant box or circle)
Governance refers to the role that the board has in developing and realising the vision and
mission of the organisation, being a protector of its values, reputation and other resources and
managing risk. Good governance requires an efficient board to oversee the overall functioning
of the organisation. It is very important that a board is aware of its leadership roles and poor
board operations, when undetected can adversely affect the entire organisation.
20) Does the organisation have a formally established governing structure? : Yes No
21) Do you have subcommittees under the board of governance? : Yes No
If yes, which of the following committees does your organisation have (Please tick)
A) Audit committee B) Investment Committee C) Development Committee
B) D) Programme Committee E) Human Resource Committee H) Funding Committee

I) Any other (please specify) ________________________
22) How often does the board meet in a year? A) Once in every six months B) once in every
three months C) every month D) Never
23) Is the chief executive a member of the board? Yes No
23A) Does the chief executive act as the chair of the governing board?: Yes No
24) Do the members of the staff including the chief executive officer have the right to vote in
the board? : Yes No
25) Is the organisation’s financial statement subject to independent audit? : Yes No
If yes, does the auditor separately meet with your board or audit committee at least once in a
year? : Yes No
26) Does the board perform an annual self-assessment of its activities and performance? :
Yes No
27) Does the organisation offer remuneration for its board members?: Yes No
27A)If yes please specifies the amount /year:
28) Does the board meet without any paid staff, including CEO/Executive director of the
organisation? : Yes No
29) Does the organisation have a written statement of its vision? Yes No
30) Does the organisation have a written statement of its mission to achieve its vision? Yes
No
31) Does the organisation have a written set of organisational values? Yes No
265
32) Does the organisation have written objectives which describe its activities and
programmes? : Yes No
33) Does the organisation have a strategic planning exercise every three to five years to
review its vision, mission, objectives, values and strategies? : Yes No
33A)If yes, does the organisation keep a strategic planning document which is accessible to
all the stake holders? : Yes No
Board Management Rating Scale (Always=4, Sometimes=2, Never=0)
No Board management practices Ratin

g
(4, 2
or 0)
1 The board ensures that it is focussed on organisational governance to realise
the organisational vision, mission, values and goals and the manager/CEO is
focused on day to day operations of the organisation
2 The board acts as leaders and governing trustees of the organisation on
behalf of the community while carrying out organisation’s mission and goals
3 The board deals with strategic issues and supports the chief executive to
carry out his/her operational functions
4 The board ensures that it meets its obligations as a legal entity and receive
legal advice when necessary
5 The board attempts to maintain a positive relationship with the key
stakeholders in the organisation's field of practice
6 The board evaluates the performance of the CEO/manager at regular
intervals in relation to previously determined set of expectations
7 The board ensures that it has at least the minimum number of members as
required by their bylaws or the law
8 The board follows its rules and regulations when it appoints and terminates
members from the board
9 The board's nomination process ensures that the board remains appropriately
diverse and non-discriminatory reflecting the community and service users
with respect to gender, ethnicity, culture, economic status, age, disabilities
and skills or expertise
10 All the new board members go through an orientation process to learn about
organisational vision, mission, values, goals, bylaws, policies and services
11 All the board members are aware of their roles and responsibilities and carry
out their duties according to the board operations manual
12 All the board members receive regular ongoing training and information
about developments in the non-profit sector
13 The board maintains a code of ethics and conduct and follows them when
necessary
14 The board follows their attendance policy strictly when it makes policy
decisions
15 The board members receive agendas and materials relating to significant
decisions in advance of their board meeting
16 The board handles urgent matters between its meetings as they arise
266
17 The board maintains a conflict of interest policy and make sure that its
members comply with the policy
18 The board maintains and strictly follows a policy of prohibiting employees
and members of their immediate families from serving as board chair or
treasurer
19 The board ensures that it reviews the risk at regular intervals and
organisation has adequate insurance policies to cover loss, damage to people,
equipment, and buildings.
20 The board follows a formal process of communication between the board
and the operations
21 The board forms or reviews the organisational strategies by reviewing its
mission and vision based on a detailed analysis of external environment
22 The board plans and develops the organisational strategies by consulting the
staff on matching the external environment and the internal competencies
23 The board ensures that the organisational vision remains current and reflects
the desired state of the change agreed by all members of the board
24 The board ensures that the organisational mission statement provides a time
frame and clear strategies to achieve the vision
25 The board ensures that the goals of the organisation clearly communicate the
organisation's purpose and services to meet community needs.
26 The board ensures that, by soliciting community input, its mission and
activities remain valid and provide benefit to the community in a culturally
competent manner
27 The board with the assistance of staff converts the organisational strategies
to achievable annual plans till the next round of strategic planning process
28 The strategies/annual plans establish an evaluation process and performance
indicators to measure the progress toward the achievement of goals and
objectives
29 The board ensures that through work plans, human and financial resources
are allocated to ensure the accomplishment of the goals in a timely fashion
30 The board communicates the organisational strategies/annual plans to all
stakeholders: service recipients, board, staff, volunteers, funding partners,
and the general community
Additional comments
267
SECTION C: SERVICE DELIVERY (Please tick relevant box or circle)

Effective organisations plan and develop their operational activities every year in a way that
directly meets the organisation’s vision, mission and values. They effectively deliver
appropriate and well run services and programmes for the beneficiaries and assure their
quality by regular monitoring, reviewing and appropriate evaluation.
34) Does the organisation have an annual planning exercise to operationalise the strategic
planning every year? : Yes No
34A) If yes, does the organisation prepare an annual planning document which identifies the
programmes and the resources? :Yes No
35) Does the organisation prepare an annual report which reflects the achievements and
failures congruent with its annual plan?: Yes No
35A) If yes, does the organisation publish it for the community? : Yes No
36) Does the organisation undertake a risk profile assessment? : Yes No
36A) If yes, what are the main areas of risk assessment: A) Loss of staff B) Organisation’s
assets C) Fraud D) Loss of income E) Natural disaster F) Legislation and
government policy
37) How often does the organisation review the risk profile : A) 0-6 months B) 6-12
months C) 12-24 months D) Never
Service Delivery Management Rating Scale (Always=4, Sometimes=2, Never=0)
No Service delivery management practices Rating

(4, 2 or 0)
1 The service delivery planning is conducted by the staff under the
guidance of the executive director/manager in accordance with
organisation’s vision, mission, goals, and values
2 The annual service delivery planning begins with the review of the last
year’s performance and finishes with the plan for the next year
3 The organisation uses national and international research to keep up-to-
date with the latest developments in their field of practice to inform its
service delivery planning
4 The annual service delivery planning clearly identifies the human and
financial resources required to deliver the services to meet
organisational goals
5 Clients and potential clients have the opportunity to participate in
6 The organisation carefully considers issues related to culture in its
7 The service delivery planning predicts output, outcome, impact,
efficiency, and quality assurance for each service and develops
performance measures to verify them
8 The organisation develops a service delivery plan with time frame for
each of its programmes/services to track its progress
268
9 The planning gives adequate attention to matching the work to be done

and the competency to do the work in terms of staff training and
capacity building
10 The organisation provides necessary training for the staff to implement
new programmes and services.
11 The organisation conducts periodic monitoring of each
programme/service to ensure its effectiveness and efficiency including
service user satisfaction surveys
12 The organisation evaluates each programme/service to establish its
outcome and impact and to comply with all internal and external
reporting requirements
Additional comments:
SECTION D: HUMAN RESOURCE DEVELOPMENT AND MANAGEMENT Please

tick relevant box or circle)
Effective organisations have appropriate and motivated staffs with appropriate qualifications
and experience. The NGO sector requires staffs who honour the vision, mission, and values of
the sector. Effectively managed organisations provide appropriate training and development
opportunities for staff and volunteers. NGOs tend to attract many volunteers and they need a
good volunteer management plan to obtain the maximum benefits from volunteers. In
appropriate staff will adversely affect programme delivery and thus compromise the
organisational purpose.
38) No. of staff : 38A) Male_____ 38B) Female_____
39) No. of Volunteers : 39A) Male_____ 39B) Female_____
40) Does the organisation have a written personnel handbook/policy that is regularly
reviewed and updated: a) to describe the recruitment, hiring, termination and standard work
rules for all staff; b) to maintain compliance with government regulations including
holidays act, occupational and health safety, Parental leave etc? : Yes No
41) Does the organisation follow an equal opportunity employment policy in terms of gender
and ethnicity? : Yes No
42) How does the organisation usually advertise its vacancies? A) Media advertisement
B) Website advertisement C) Newsletter advertisement D) Professional
associations E) Word of mouth F) Internal advertisement
43) Does the organisation have a human resource manager/talent advertiser with HR
qualifications? : Yes No
44) If you are a Māori organisation, do you employ people from other ethnic groups?
: Yes No N/A
269
45) If you are a Māori organisation, do you have any additional requirements such as
knowledge of teo reo Māori and tikanga Māori when you recruit staff? Yes No N/A
If yes, please specify:
Human Resource Management Rating Scale (Always=4, Sometimes=2, Never=0)
No Staff management practices Rating

(4, 2 or 0)
1 The organisation fills the vacant positions promptly to prevent
interruptions to services delivery and ensure fair workload
2 The organisation follows non-discriminatory hiring practices
3 The organisation recruits staff through a competitive recruitment
process developed and guided by human resource professional
4 The organisation provides clear job descriptions that provide details
such as qualifications, responsibilities, reporting relationships,
performance indicators and review when it recruits staff members
5 The organisation offers a competitive remuneration plan to all
employees in accordance with their qualifications and experience
and conducts a periodic review of salary ranges and benefits
6 The organisation provides an induction programme for all the new
staff regarding its vision, mission, values, policies, and procedures
7 The organisation ensures that all the board members and staff have
access to the written personnel policy and they follow the policies
8 The organisation follows a systematic and fair method for the
assignment of new or existing staff to specific jobs to protect their
workload
9 The CEO/Manager carefully reviews and responds to ideas,
suggestions, comments, and perceptions from all staff members
10 The organisation supports and provides opportunities for meeting
employees' professional development needs
11 The organisation supports all the professional employees such as
social workers and counsellors to become members of their
respective professional bodies
12 The organisation supports all the professional employees such as
social workers to obtain necessary registration and maintain their
annual practising certificates
13 The organisation maintains contemporaneous records documenting
staff time in program allocations
14 The organisation follows a clear and fair policy and process for
managing all the workplace conflicts and complaints
15 The chief executive officer/manager or their delegated authority
conducts and documents employee performance appraisals of all the
staff annually
16 Individual employees are acknowledged and rewarded for their
outstanding contribution to the organisation’s activities
270
No Volunteer management practices Rating

(4, 2, or 0
1 The organisation defines a clear purpose for all the volunteer jobs in
volunteers within the organisation
2 The organisation provides well-explained job descriptions for all
volunteer positions in the organisation
3 The organisation actively recruits volunteers according to a well-
defined volunteer management plan
4 The organisation follows a volunteer recruitment policy that does not
discriminate, but respects, encourages, and represents the diversity of
the community
5 The organisation provides appropriate training and orientation to the
agency to assist the volunteer in the performance of their volunteer
activities and offers training with staff in such areas as cultural
sensitivity
6 The organisation is respectful of the volunteer's abilities and time
commitment and has various job duties to makes sure that jobs are not
given to volunteers simply because the jobs are considered inferior for
paid staff
7 The organisation periodically evaluates each volunteer’s engagement
with the organisation to understand the strengths and weaknesses of
its volunteer programme
8 The organisation does some type of volunteer recognition or
commendation periodically, and staffs continuously demonstrates
their appreciation towards the volunteers and their efforts
9 The organisation proactively responds to the ideas, suggestions and
comments from volunteers
10 The organisation provides opportunities for program participants to
volunteer
11 The organisation maintains contemporaneous records documenting
volunteer time in program allocations
12 Financial records are maintained for the volunteer time spent on
programs and recorded as in-kind contributions
271
SECTION E: SYSTEMS OF OFFICE MANAGEMENT (Please tick relevant box or

circle)
Effective organisations will have effective office systems and infrastructure such as building,
vehicle, computers etc. A good office supports everyone with appropriate workloads and
ensures that when staff members are out working they know that they have back up. A good
office means policies and practices are in use for all transactions and making sure everyone
follows the rules.
46) Does the organisation has a specific office administrator/receptionist apart from CEO and
other staff? : Yes No
47) Does the organisation has a website? : Yes No
47A) Does the organisation maintain any social media platform to inform the public about its
activities? Yes No
48) Does the organisation own its office? : Yes No
49) Does the organisation has vehicles for its field operations? : Yes No
50) Does the organisation’s buildings and office space are accessible to people with
disabilities? : Yes No
51) Does the formal communication system consist primarily of written or computer based
communication? : Yes No
52) Does the agency have specific locations where notices and other written communication
can be seen or received? : Yes No
53) Does the organisation has a policy on purchase and use of stationery, telephone and other
utilities? : Yes No
No Office management practices Rating
1 Information systems are in place, providing secure, timely, accurate and

relevant information to all relevant staff
2 An appropriate qualified or experienced person /firm manage the website
and social media platforms of the organisation and they are updated on a
regular basis.
3 Computer systems (including email) are adequate and effective and there
are regular backup systems in place.
4 All staff members are aware of the organisation’s information systems, are
knowledgeable in their use, and make use of them as needed.
5 The manager holds regular staff meetings in groups or as individuals.
6 Each staff meeting has an agenda and minutes for the same.
7 The organisation has a policy on keeping private information according to
Privacy Act (1993) and has processes and measures to adhere to this law.
272
8 The organisation has a flexible work arrangement system for its employees.
9 The organisation has a policy and procedure manual for all areas of its
operations and they are reviewed and revised on a regular basis.
SECTION F: FINANCIAL MANAGEMENT (Please tick relevant box or circle)

Effective financial management is like a wheel with several spokes such as planning,
budgeting, fund raising, accounting, internal control systems, compliance of laws, rules and
regulations, audit and external reviews. This is the fuel of organisation and absence of any of
these means organisations are at risk.
54) What are the main sources of funding for the organisation? (Please indicate
approximate % of each source)
A) Individual donations ---B) Grants from philanthropic institutions ----C) Grants from
government -----D) Fees for the services ----E) Government contracts-----F) Membership
subscriptions------ G) Interest/investments -----H) Street appeals ---- I) other funding------
55) Does the organisation prepare an annual budget prior to the start of the financial year,
showing proposed expenditure and income? Yes No
56) Does the annual budget show the sources of funding? : Yes no
57) Does the organisation have external auditor? : Yes No
57A) Does the organisation use external fund raisers? Yes No
58) Does the organisation have a qualified accountant : Yes No
59) Does the organisation use any computer accounting programmes? Yes No(If yes, circle
the programme is being used)
59A) MYOB B) XERO C) Other (specify):
Financial Management Rating Scale (Always=4, Sometimes=2, Never=0)
No Practices of financial management Rating

(4, 2 or
0)
1 The CEO/Manager consults all the staff to prepare budget to make sure that
the budget meets service delivery plan requirements
2 The final annual budget clearly identifies the income, various expenditures
and overheads approved by the board
3 The organisation allocates specific roles for board and staff members in
fundraising
4 The organisation ensures that funds are raised in an ethical manner consistent
with the organisation’s values and goals
273
5 The CEO/manager prepares monthly/quarterly cash flow projections and

communicates this to the board
6 The organisation follows accounting practices which conform to accepted
standards
7 The organisation records the details (date, description, amount etc.) of its
transactions (payments and receipts) in cashbooks according to the standard
chart of accounts
8 The organisation ensures that entries in the cash books are cross-referenced
to a supporting evidence
9 The CEO/Manager checks the cash book every month and confirms that the
transactions are coded as per the cost centres
10 The organisation keeps track of amounts owed to others (e.g., suppliers) and
owed by others (Eg; staff, contracts payments etc.)
11 The organisation ensures that the expenses are properly authorised and
approved by a designated person before payment is made
12 The organisation ensures that bank reconciliations are checked by someone
who did not prepare them
13 The organisation ensures that statutory deductions (payroll taxes,
superannuation contributions etc.) are properly made and paid on time to
comply with its tax obligations
14 The organisation controls all the items owned by a fixed assets register for
reducing loss and risk
15 The organisation ensures that it has adequate insurance coverage to minimise
organisational risk and liabilities
16 The organisation periodically forecasts year end revenues and expenses to
assist in making sound financial decisions during the year
17 The organisation remains accountable to funders by providing financial
statements as per the funding agreements
18 The organisation demonstrates their accountability by sharing its financial
information with the community and the regulatory bodies
19 The organisation renegotiates its contracts for services regularly (and before
the contract expiry date) to reflect current costs and service needs identified
in the community
20 The organisation ensures that staff and board members dealing with financial
matters receiving appropriate training
Additional comments
274
SECTION G: RELATIONSHIP MANAGEMENT & NETWORKING (Please tick

relevant box or circle)
Effective organisations are well known in their communities and maintain good relationships
with individuals and groups. They usually keep good rapport with like minded organisations,
government agencies and corporate sector to serve its vision and mission in line with their
values and ethics. Organisations can represent their communities’ voice through networking
with other organisations for lobbying and advocacy which could initiate changes in public
policy. Effective organisations are also transparent and accountable to its bye-laws, values
and all stakeholders such as government, staff, beneficiaries, funders and community at large.
60) Is the organisation a member of any professional association? If yes please specify
______________________________________
61) Does the organisation network with a variety of organisations (i.e. local and central
government entities, businesses and other non-profit and community agencies, iwi, hapu, etc):
Yes No (If yes please specify ____________________________________)
62) Does the organisation believe that the Charities commission is helpful for the NGO
sector? : Yes No
63) Does the organisation associate with any business organisations for fund raising or any
other matters? : Yes No
64) Does the organisation associate with other NGOs on common issues/themes? : Yes No
65) Does the organisation actively participate in the community consent process sought by
government pertinent to its activities? : Yes No
66) Does the organisation believe in a competitive rather than collaborative approach? Yes
No
67) Does the organisation feel that accepting government contracts /grants compromises
organisational vision and mission? Yes No
SECTION H: Te Tiriti O Waitangi (Please tick relevant box or circle)
Many community organisations, not just iwi or hapu groups, make a strong commitment to
honouring Te Tiriti O Waitangi. Organisational structure and practices reflect that
commitment.
68) Does the organisation have a statement in its constitution or founding documents that
outlines its commitment to Te Tiriti O Waitangi?
Yes No
69) Do the organisation’s personnel (Board members, staff and volunteers) understand the
principles of the Treaty and incorporate those principles in the delivery of services? :
Yes No
70) Does the programmes and activities operate in a way that reflects above commitment to
Te Tiriti O Waitangi.? : Yes No
275
71) Do the structure and staffing reflects our commitment to Te Tiriti O Waitangi? : Yes
No
72) Has the organisation built strong, ongoing relationships and is there cohesion with
Tangata Whenua, relevant Māori groups, organisations and institutions? : Yes No
Additional Comments:
SECTION I: ADDITIONAL QUESTIONS (Please use additional sheets if necessary)

73) Is the organisation satisfied with the prevailing management systems /practices in the
organisation? : Yes No
If no, why and what improvement do you want to bring in the present management practices
of this NGO?
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
---------------------------
74) Do you agree with the popular view that NGOs need a distinct management system
different from the management of business and public sector organisations?:Yes
No
If Yes/No, why do you think so?
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
---------------------------
75) Do you think that there is a need for a specific management model that is more suited to
NZ NGOs from NGOs in other countries? : Yes No
If yes/no , why do you think so?
276
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-----------------------------------------------------------------------------------------------------------------
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-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
---------------------------
76) Do you think that is there any difference in the management of Māori/iwi organisations
and non Māori organisations?: Yes No
If yes, please state the differences.
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-------------------------------------------------------------------------------
277
Appendix 5: Charities Register-Screenshot

Kuruvila, Albert - Final PHD Thesis

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Management of Non-Profit Social Service Organisations in

Aotearoa New Zealand

A thesis submitted in partial fulfilment of the requirements for the

Doctor of Philosophy in Social Work

Christchurch, Aotearoa New Zealand

Department of Human Services & Social Work

School of Language, Social and Political Sciences

organisations face these challenges due to a lack of proper management of these

resources and finance, and their commitment to te Tiriti o Waitangi.

A quantitative research methodology using a cross-sectional survey design informed by

being critically reflective learning organisations to improve their management practices. A

Māori and non-Māori organisations, a reconceptualisation of systems thinking is necessary to

management takes place. Accordingly, an ecosystem management model was recommended

resources; finance; ecosystem management; non-profit social service organisation

3.3 Contemporary Issues Confronting the Non-Profit Organisation Sector in Aotearoa

5.8 Commitment to te Tiriti o Waitangi ..................................................................................... 173

Table 1-1. Value of the non-profit sector ................................................................................................ 6

Glossary of Māori Terms

Kaupapa Māori Māori philosophy

Kōhanga Reo Māori language nest

Koha tuku rua atu Redistribution

Mahi aroha Volunteering/unpaid work

Mātauranga Māori Māori knowledge

Mihi whakatau Official welcome speech

Tangata whenua People of the land

Tau utuutu Reciprocity

Tauiwi Others who came to New Zealand after Māori

Te Ao Māori Māori world view

Te reo Māori Māori language

Tino rangatiratanga Self-determination/autonomy

Tirohanga Māori Māori world view

Whakahaere Māori Māori management practices

Whānau Extended family

ANGOA Association of Non-Governmental Organisations of Aotearoa

researcher, trainer and consultant. Throughout my professional experience as a social worker,

training and consultancy as different; instead, I considered them to be complementing

activities in developing my knowledge about NPOs.

management of NPOs. This tempted me to do further research on the management of NPOs as

social work profession. However, in my experience as a social work educator, I have

research motivated me to undertake a doctoral study in this area.

wider non-profit sector studies.

Ehara taku toa, he takitahi, he toa takitini

the cultural appropriateness of this research for Māori.

Sargisson (School of Psychology, University of Waikato) and Dr.Surej P John (Waikato

administrative support she provided for the project.

patient and empathetic to me all these years. I really appreciate it.

contributions challenged my thinking, widened my views and developed my understanding.

first person in the family with a PhD.

1.1 Overview of the Chapter

relevance of management to social work. This is followed by an overview of the context of

concludes with an overview of how the thesis is organised.

1.2 Social Work and Management

organisational operator if the social worker wants to be an effective practitioner.

management is to plan, organise, administer and manage programmes and organisations

p. 229). Social workers have an ethical responsibility to challenge organisational management

practice of management in social service organisations should be ethical within a broader

1.3 Context of the Study

globe. Variously known as non-profit organisations (NPOs), not-for-profit organisations

Increased knowledge in information technology, a high level of literacy among the