PBL 5: Third Sector:

Third Sector:

a part of society and the economy made up of organizations that are independent of the government (the public sector) and profit-making businesses (the private sector) driven by values and societal impact

What makes it difficult to define the third sector?

its extreme diversity, third sector organisations vary in size, structure, funding, purpose, level of professionalism, relationship with government and its main activity (fundraising, campaigning, service delivery)

• therefore there is no single leadership model

Issues in Boundaries of Public, Private and Third Sector

Each sector used to have clear boundaries (profit vs government vs value-driven) but now third sectors are changing more

How are Third Sectors Changing?

third-sector organisations increasingly:

• deliver services traditionally provided by government

• compete for government contracts

• adopt more business-like structures

• work closely with public organisations

How is there an increase in rising accountability?

rising accountability because organisations receiving public money have to demonstrate how it is being used, while their exact role and boundaries remain unclear.

• Moved more from grant funding to contractual relationships with governments

Fuzzy Boundaries of the third State

Questions if the third state can even be described as one coherent sectors since it is increasingly influenced by the state and market

Pros and Cons of Public Service Delivery

The state is keen for the third sector to play a more active role in delivery of public service through contracts

• Pros of Contract: funding, organisational growth, opportunity to expand

• Cons: threaten independence, values, financial sustainability, control over which services are provided

Full Cost Recovery and its Problem

Direct/service costs and Core/indirect costs

• lots of contacts only cover the direct service costs and not the core indirect costs.

• Third sectors still take them because their commitment to the cause/mission can encourage them to accept contracts even when the funding is inadequate

How do Contracts affect Independance?

Third sectors usually have their own values and missions, but dependance on government funding may threaten these

• third sector values contrast with objectivity and accountability

How can the sectors deal with conflicting values

Seperation and Third Sector Takes the Lead and Forcing

What is Serperation

Some third-sector organisations simply maintain limited interaction with government.

They remain independent, avoid government contracts,operate according to their own mission

Conflict is therefore limited because the two sectors interact relatively little.

What does it mean by them taking the lead?

The relationship does not always mean that government controls the third sector. Third-sector organisations can themselves influence government.

They may use money/donors and expertise to persuade government to change policy

How do third sectors force public sectors?

• they can threaten public sectors to change through political pressure, media exposure and public campaigns

Founders Syndrome:

tension that arises when the original founder fails to adjust his or her leadership style as the organisation continues to become more structured

• occurs because they find it difficult to letgo and allow the distribution of rresponsibility

Cormack and Stantons Two-Dimensional Model

Third sector has great diversity in:

• 1) the degree of complexity, (2) the nature of operations, and (3) the source of funding

these 3 factors make it difficult to arrive at a common basis for the requirements of a CEO in the third sector

Two-dimensional model generating a series of clusters:

• Scale/Complexity

• Main organisational activity: influence the type of leadership required

Passionate Leadership:

a strong emotional affinity with the raison d’etre of the organisation, a passion for it’s beliefs, a desire to succeed for the greater good of te organisation and a high degree of personal energy for the cause

Leader vs Leadership:

Leader: The individual person to whom leadership is attributed.

Leadership: A broader social process through which shared meaning is created.

• Day therefore argues that leadership emerges through the creation of shared meaning and sense-making

Distributed Leadership:

Leadership responsibilities are spread across:

• local organisations

• employees

• volunteers

Rather than one concentrated leader

What challenges is the third sector experiencing?

• increased demand for services with reduced resources

• Increased accountability expectations

• Changes in how performance is measured and managed

• Changed in how governments perceive the sector

For Profit Leadership

centers on maximizing financial returns, market share, and revenue growth through direct corporate authority and economic incentives

In which areas will third-sectors adapt the practise of for-profit

• Dealing with a wide range of stakeholders who expect consensus

• the need for innovative metrics to monitor performance

• the challenge of building an effective organisation with limited resources and training

RQ1: What does leadership mean within the third sector?

Leadership is an approach and leadership is personal qualities

What doe ‘leadership is an approach mean’

• maintain the reputation of the organisation (stand by vision)

• ensure ethical obligations are adhered to

• motivate people

• create a positive environment (creating a better world)

What does ‘leadership is personal qualities mean’

how leaders are perceived, emphasizing the importance of emotional traits and social skills

RQ2:What are the leadership challenges in and across the third sector?

Recovering from a recession ,building collaborative relationships, remaining innovative and distinctive, building and developing less capability, reinforcing the legitimacy of the sector

What does the recession/financial crisis force leaders to focus on

• make decisions, take action under pressure and communicate decision to internal and external stake holders

• consumer-centric mindset (vision and business values must not be compromised)

• Delivering more services with less resources without compromising quality

what does building collaborative relationships focus on

driven to find a balance between preserving their own place in the sector while being confident enough to share knowledge for a wider benefit

• they have to identify a) who to align with and b) what form of collaboration

what does remaining innovative and distinct focus on

for vast majority of the sector their are not enough resources to fund services, so leaders must find new ways to provide services (new organisational models)

The capacity to innovative and remain distinctive is a critical determinant of long-term survival in the third sector

what does building and developing capability focus on?

Leadership is scarce despite rising demand. The small pool of appropriately skilled leaders are continuously being drained of talent to public and private sectors

Roles are shifting from technical or operational to collaborative and networked, needing political awareness and strong influencing skills.

what does reinforcing legitimacy of the sector focus on

the sector must maintain its core purpose, especially now-a-days when politicians are questioning the legitimacy of charities campaigning social issues (especially if they are in receipt of government funding)

What is overall goals of leadership in third sector?

Boundary crossing  bringing the experience of working in the private and/or public sector to the third sector

prove effectiveness, provide framework that cannot be imported from the corporate world, needed at all levels, innovation, enacted ethically

What are the two volunteering management approaches?

Universal Approach: one set of best practices for all and they will work regardless of context

Contingent Approach: Relies on several more factors on how to manage volunteers, the right approach depends on the right situation 

Different Types of Universal Approaches:

Susan Ellis: 9 necessary functions of successful volunteer programs (Volunteer Involvement task outline)

UPS Foundation: ‘Elements of volunteer resource management’

Machine and Paine: Nine Indicators for Achieving Quality (Quality Standard that Involve Volunteers)

UPS Foundation: elements of volunteer resource management

each component falls under three categories: policy and program structure, management and program evaluation

• management of volunteers requires these three in all organisations

What are the Conditional Volunteer Management factors split into contigent factors

• Volunteer-Focused and Organisational Focused

What are the three different types of volunteer-focused theories?

• Rochester: Four Models of Involving Volunteers in Small Voluntary Organisations

• Meijs: Elaborate on Rochester framework, propose proram managements and membership managements models

• Rehnborg: Volunteer Involvement Framework

Rochester: Four Models of Involving Volunteers in Small Voluntary Organisations

Service Delivery, Support Role, Member/Activist and Co-worker

Meijs and Collleagues: Develop program management on membership management models which are distinguised by:

Organisational Goal Dimension and Volunteer-Paid Staff Dimension

What is organisational and volunteer goal dimensions

mutual support organisations: volunteer-run and need membership management model

service delivery organisations: volunteer supported and need program management model

Volunteer run organisatins vs volunteer-supported organisations

Rehnborg: Volunteer Involvement Framework: Two Dimensions

1.Volunteer Connection to Service: affiliation focused (generalist) or skills focused (specialist)

• desire to fulfill a goal of the group or a specific mission

• share skills or gain skills

2. Volunteer ‘time for service’

• short term episodic or long term ongoing

Program/Organisation-Focused:

Masduff: the prevailing culture or worldview of the program or organisation influences the appropriate management of volunteers

DImensions of the Macduff Framework

Extent to which worldview/culture of the volunteer program

1. Promotes radical change vs regulation

• dramatic shifts in existing structures vs upholding status quo

2. Exhibits flexibility vs stability

• collaborative decision making vs protocol and ordered programming

4 categories of volunteer programs:

traditional (regulation and stability), social change (radical and stability), serendipitous (regulation and flexible) and entrepreneurial (radical and flexible)

What are higher levels of non-profit accountability related to

higher levels of an organisations commitment to operating standards

higher levels of transformational leadership

How does commitments to organisations operating standards increase accountability

Operating standards provide guidelines tomeasure accountability within organisations

How does transformational leadership increase accountability

without an effective leaders there can be no practical way to ensure adherence to guidelines

Paul Definition of Accountability

Paul (1991): holding individuals and organizations responsible for objectively measured performance.

Lawry Definition of accountability

Lawry (1995): willingness to endure, and even invite, public scrutiny; accepting responsibility for decisions and their consequences.

Romzek and Dubnick Definition of Accountability

Romzek & Dubnick (1987): how agencies manage diverse expectations inside and outside the organization

Fry Definition of Accountability:

associated accountability has to de with felt responsibility

Kearns Framework for Accountability

• Compliance or Legal Accountability (following the rules),

• Negotiated Accountability (addressing implicit standards that have not been codified),

• Professional/Discretionary Accountability (doing the right thing even when not enforcable)

• Anticipatory Accountability (monitering and participating legislative activities related to accountability)

Brody Framework for Accountability

promising conceptual framework for examining organizational accountability

(a) fiscal responsibility/avoidance of fraud, (b) good governance, (c) adherence to mission and donor direction, and (d) demonstration of the organization’s program effectiveness