Serve or Conserve: Mission, Strategy, and Multi-Level Nonprofit Change During the Great Recession

Change is frequently afoot in the nonprofit sector, both in the wider institutional environment in which nonprofits operate and within the organizations themselves. Environmental transformations—funding sources, supply and demand for collective goods, and administrative norms—create the circumstances in which organizations operate. Internally, change involves the alteration of goals, practices, and personnel. To explore how multiple aspects of change intersect across levels, we ask how organizations’ practices influence their experience of and reaction to changes in the environment. Turning open systems theories inside out, we argue that internal planning, routines, and missions give rise to organizational mindsets that imbue evolving environmental circumstances with meaning. We illustrate our argument using a unique longitudinal dataset of 196 representative 501(c)(3) public charities in the San Francisco Bay Area from 2005 to 2015 to assess both accelerators and obstacles of change. Empirically, we investigate predictors of organizational insolvency and the ability to serve constituents in the wake of the Great Recession. We find that strategic planning decreases the likelihood of insolvency whereas an orientation toward the needy increases spending. We conclude with our contributions to understanding of multi-level organizational change and nonprofit strategy.