Defining failure in the nonprofit organization: The case of four human service agencies

Private nonprofit human service organizations provide a spectrum of services that aim to resolve societal problems. Their failure may leave needed and desired services unprovided or not provided sufficiently to meet public demand. However, the concept of organizational failure has not been examined for the nonprofit organization. This research addresses the deficiency in the literatures of organization failure and nonprofit organizations.^ An eight category typology, developed from a review of the current literature and findings from expert interviews, is initially presented to define nonprofit organization failure. A multiple case study design is used to test the typology in four nonprofit human service delivery agencies. The case analysis reduces the typology to five types salient to nonprofit organization failure: input failure, legitimacy failure, adaptive failure, management failure and leadership failure.^ The resulting five category typology is useful to both theory builders and nonprofit practitioners. For theory development, the interaction of the failure types extends the literature and lays a foundation for a theory of nonprofit organization failure that diffuses management and leadership across all of the failure types, highlights management and leadership failure as collective functions shared by paid staff and the volunteer board of directors, and emphasizes the importance of organization legitimacy.^ From a practical perspective, the typology provides a tool for diagnosing failure in the nonprofit organization. Using the management indicators developed for the typology, a checklist of the warning signals of potential failure, emphasizing the key types of management and leadership, offers nonprofit decision makers a priori examination of an organization's propensity for failure. ^