A Short Note on Managing the 501: Volunteer Management
http://www.law.cornell.edu/uscode/text/26/501
© 2014 EEASI Corporation

 

One of the finest texts on Managing an Organization was written by Professor Theodore Caplow at the University of Virginia. It was originally written (in 1976) to assist his wife as she approached managing a large not-for-profit charity organization. Since then it has been rewritten to accommodate its demand as a handbook for executives of major organization.

This excellent work, however, is not able to speak directly to 501 organizations concerning the inner workings of not-for-profit organizations. This short note will supplement any management text or handbook that can be used as a reference for managing organizations in general, but will speak specifically to the issues of managing 501s.

First and foremost how does a not-for-profit differ in the main from a for-profit organization? The answer is this:

A 501 organization must rely on volunteers to maintain the logistics train of the organization without a for-profit style system of rewards and punishments to motivate the volunteers

It is a fact that 501s in general cannot survive on membership dues or even donations without a cadre of volunteers to maintain the logistical train attached to the organization. It is said that logistics are 90% of warfare; further, it is a well known premise of generals that destroying the logistics base of an army will bring the army to its keens. Something similar can be said of the 501.

That brings us to the crucial point of management: Without volunteers the 501's very existence is brought into question; thus, management must devise the skills to work within the arena of the volunteer if they are to keep the 501 alive and on course.

The 501c3 can get help from the IRS in that donors of goods and services can use their donation to the 501c3 as a tax write off. Other 501s do not enjoy that privilege, hence the contribution to the maintenance of other 501's than the c3 must more heavily depend on volunteers.

Hence the 501 management structure must center around how one manages a cadre of individuals with having any control of the system of rewards and punishment over that cadre.

Since there is no system of rewards and punishments comparable to that in a for-profit organization available to the manager, a specialized approach must be developed that encourages cooperation and volunteerism. In particular, in the extreme, the management of the 501 must understand the difference between a manager who is a dictator versus a manager who is a facilitator and the impact this difference can have on the volunteer cadre.

Why the facilitator versus the dictator approach is relevant is that resistance to being told what to do is ingrained in the human personality, particularly the American personality. More specifically, the American personality is rebellious by nature. Our country was founded on this trait and this fact was recognized very early by the British generals during the French and Indian war: The American colonists do not like being told what to do.

The reason that this matters is that volunteers are not going to relate to the dictator approach or any approach that tries to motivate by threats or pressure, whether by tone or explicit words. In short, volunteers are not going to work for Theory X managers.

Because volunteers are so important, it is worth taking a moment to look more closely at the work of the volunteer versus the contractor or corporate employee. A key difference is that if a volunteer is given a specific task such as to keep the tennis courts free of leaves and they encounter a problem unrelated to leaves, they will usually go ahead and fix the unrelated problem if they can. Not so for the employee or contractor, especially a contractor that is being paid for their services. Because there are real costs involved in employment and contracting, doing something for free is out of the question. But the volunteer has no such limitation or motivation. As a result, volunteer help has a value far beyond that of the contractor or employee.

Where is the main source of volunteers? People volunteer for things that matter to them personally. Payment is irrelevant. The reward to the volunteer, their "payment", is doing something for the greater good of the organization. This cannot enter to the equation of the contractor and only enters into the equation of the employee of management organizations that practice Theory Z.

How does the facilitator differ from the dictator? Facilitators create an encouraging and positive environment in which a volunteer is enable and empowered to do the best job possible. The dictator, on the other hand, gives orders as to what to do, thus usurping the individual initiative of the volunteer and thereby diminishing their enthusiasm for being a volunteer. The volunteer in a facilitating environment is far more likely to do their best work than if they feel that they are being coerced or pressured to do a job. It is well established that this key difference in management styles can lead to significant productivity gains, even in for-profit corporations. But for the 501, it can spell life or death since by alienating the volunteers, one eliminates a workforce that will work for free. To replace this workforce will require cash payments by the 501 that they can ill afford to make since as is well known, membership dues are usually not sufficient to maintain the logistical train of the organization, especially a neighborhood recreational organization that offers high-cost facilities such as a pool.

In short, volunteers are the lifeline of a 501 organization because they maintain the logistics train, work for free and are willing to do any job they recognize needs being done without being asked; management styles can either encourage or discourage volunteerism because of the human factor of personality, particularly the rebellious, individualistic American personality. Facilitators are far better suited to manage 501s than dictators because a facilitator can better work without the need for a corporate-style system of rewards and punishments that is necessary and essential for the dictator.