Abstract

The not-for-profit sector’s role in the American economy is substantial. In 2009 there were more than 1,569,572 tax-exempt organizations accounting for 8.11% of all wages and salaries paid in the United States. Public charities reported nearly $2.6 trillion in total assets in 2007 and individuals gave $229.28 billion in 2008 to not-for-profits (National Center for Charitable Statistics, 2010). Considering the magnitude and financial impact that not-for-profit organizations (NPO) have on local communities and the national economy, it is vital to assess how these organizations are managed and what if any effect management practices have on their performance. Two main issues that frustrate the analysis of the managerial effect on agency outcomes are defining which management practice/s significantly impact an entity’s economic performance and what is the optimal method to measure management practices. There were two purposes of this quantitative research investigation. One was to study the impact of 18 management practices defined as “operations (three practices), monitoring (five practices), targets (five practices), and incentives (five practices)” (Bloom and Van Reenen, 2007, 1393 - 1397) on the performance of NPOs in the metropolitan area of southeast, Wisconsin. The second intention was to describe which management practices had the most significant impact on those not-for-profits in the study that had exhibited growth in the number of employees employed. The basis of this research project was derived from a study (Keller, 2010) conducted of not-for-profit agencies located in southeast, Wisconsin. An examination of the survey data of NPOs demonstrated that management practices had a strongly significant effect on the organizational performance of not-for-profit organizations at the 2.85E-07 level of significance and the discovery of five optimal management practices of the highest performing not-for-profit organizations: Targets are Ambitious; Attracting Talent; Retaining Talent; Rewarding High Performers; and Corporate Performance Dialogue.