Democracy and Management: Organizational Practices and Nonprofits’ Contributions to Society

Abstract

Nonprofit organizations contribute to society through service provision, advocacy, and community building. As they face the challenge of pursuing a social mission while operating in a market economy, many adopt businesslike practices in response. Nonprofits’ tendency to adopt such practices has become a contested scholarly topic, with, however, limited empirical evidence. Using survey data from nearly 600 nonprofits in the Vienna region, we examine how organizational practices—specifically businesslike managerial and democratic ones—relate to nonprofits’ emphasis on service provision, advocacy, and community building. Democratic and managerial practices follow institutional logics that may activate interpretation frame effects that influence organizational goals. Contrary to concerns in previous literature, we find that implementing managerial practices is harmonious not only with service delivery but also advocacy and, to some extent, community building. Democratic organizing, conversely, supports community building while reducing service delivery focus. Combining these practices can support a balanced societal role profile.