As organizations ebb and flow within the dynamic setting of the third sector, change remains the constant. Change requires organizations to examine the quality and coverage of their existing products and services, reduce their expenses, locate new directions of movement and develop new relationships--all the while nurturing their environment. Inevitably, organizations face deciding on the main determinant of change—usually, a dichotomous decision—change leadership or change management. From this two pronged examination other questions naturally follow:

• How does change within society at large affect leadership and management within organizations?
• Under what conditions can leadership affect change? Under what conditions can management affect change?
• When the going gets tough, what is the case for changing leadership? What is the case for changing management?

We write from the premise that change is often asked and needed in society and within organizations. Organizations face change from a variety of sources and directions. Forces can originate internally, or externally. They include changing technological standards, shifting community needs, increasing client demands, reduced funds for administrative expenses, as well as changes in the broader social structure. Regardless of its specific origin, change is a constant in the non-profit world. Boards face a unique responsibility to understand the various relationships the organization maintains. As leaders, boards are challenged to find new directions and lead for positive change. Yet, leaders are found at all levels of the organization, and managers themselves must often serve as proactive change agents.

Maintaining and nurturing an effective organization requires all members of the organization to be attuned to potential change—both within the organization and in relation to its clients, community, competition, and the private and public sectors. Leaders and mangers who comprehend the change process can foster a "natural state" of change for third-sector organizations.

Motivation: Fear and Money

John Kotter, in his influential book, Leading Change, provides a blueprint for approaching change. Kotter begins his presentation by citing fear as primary motivator for change, titling an opening chapter as "Why Firms Fail." The idea that one must change or fail is a theme that resounds throughout the book and throughout much of the current private sector literature on change. The fear of being left behind, of failing, is often cited as a prime motivator in the market-directed environment.

Change in organizations intensifies as organizations find niche markets, tailoring their purchase of services and goods in an ever more selective and competitive business environment. The changing boundaries of business through globalization is one of the main concerns Kotter cites for the emerging business leader and manager. Globalization increases competition and pressure upon the organization while contributing to the potential demise of an organization through the shrinking market. The language of battle used throughout the book might be a bit strong for many nonprofit managers, and a bit stringent for those accustomed to thinking of their work in terms of positively impacting their communities. However, the process outlined by Kotter does provide a roadmap to potential success for change.

Kotter distinguishes sharply between management and leadership in his book. He explains that managers cope with the complexity of change, the nuances, while leadership is about coping with change. More specifically, managing involves planning, budgeting, staffing, controlling and problem solving, while, leadership involves a set of processes that create organizations in the first place or adapt them to significantly changing circumstances. Things are to managed, but people require leadership. Kotter sets as a tone of urgency with the idea that managers must create a sense of crisis so that people will understand why they need to change. What the organization requires are people with the attitude that they will never fail nor fear being left behind.

The first step of Kotter’s eight-stage transformation process is to establish a sense of urgency. During this step, while examining the market environment, the leader is instructed to identify and discuss potential crises or major opportunities. A second step involves the leader assembling a team with enough political power within the organization to lead the change effort. Then comes the crucial step of creating a vision. And following come the action stages of the process: communicate the change vision (4), empower employees (5), generate short-term and small wins (6), consolidate change (and produce more change) (7) and finally anchoring (8). The key to the eight step process of change occurs in step six. If leaders and the on-board managers can plan for visible performance improvements, create those improvements and reward those involved the process will develop a critical mass toward change. During steps seven and eight, the manager is instructed to fire those who are not on board, hire those who will be be players, and assign new projects and themes to change agents, thereby ensuring a leadership succession that will extend the path established by the leader and the coalition.

Kotter’s plan is very thorough and is practical in many aspects. But its grounding in the fear of being left behind means that it commits the organization to launching a change initiative in a climate of anxiety and fear. A very different approach to organizational tensions is found in the work of David Cooperrider and his associates at Case Western Reserve University. They call it "appreciative inquiry."

Motivation: Appreciation and Concern

The Appreciative Inquiry approach begins by viewing the organization as a positive force in the dynamic community, evaluating and understanding its strengths and weaknesses, and then preparing a plan to address these weaknesses and enhancing the strengths. This method of organizational change is identified as "appreciation," a means of understanding the organization’s position in its community and the importance of its work.

Appreciative Inquiry (AI) is defined by Cooperrider (1999) as the art and science of ferreting out the best in an organization through skillful questioning, and bringing key stakeholders together with the knowledge to plan the future or change the present. This process of promoting constant change was discovered by noting when members of organizations felt most alive within the system, and when they found themselves most committed to the mission and goals of the organization. Members of an organization, Cooperrider asserts, feel most dedicated when they are moving forward, achieving successes, and advancing with them. Thus, appreciative inquiry was born as a method of finding out how an organization’s members feel about the work they do. This approach is particularly significant for the work of third sector organizations, as many such groups have long held the position that what they do is as important as how you do it.

AI presents five principles to guide the organization confronting change:

1. The Principle of Constructionism, which says "you can create our own reality."
2. The Principle of Simultaneity, which asserts that inquiry is intervention, that the positive future can be defined.
3. The Poetic Principle, which explains that organizations are social creations and not machines, and that understanding the human experiences of the organization illuminates the real capabilities of the organization.
4. The Anticipatory Principle, which assures us that the future we anticipate is the future we create.
5. The Positive Principle, which asserts that if we can build on the positive of the organization, it will then be possible to move forward without getting caught in the trap of mindset negativity.

With its mantra that "imaging a positive future creates a positive future," some may be tempted to see AI as just one more example of the power of "positive thinking" or "accentuating the positive". But the significance of this approach may lie deeper than such cultural platitudes. AI challenges us to look at the organization as a specialist in something rather than a mysterious for desperately trying to get things right. AI sees the organization as a strong and positive force, which can refine and enhance its already functional positive attributes. If the organization can help to promote positive relationships with stakeholders, positive growth and positive changes to quality of work, it can address most problems as they occur. The organizational manager, according to AI, has no need to instill fear or "create" a sense of crisis. Rather, one should trust the four D’s Cooperrider identifies—Discovery, Dreaming, Design, and Destiny—and use the process of AI to find areas that might be improved upon by existing members of the organization without external stimulus.

Each major force within a nonprofit organization— its board, staff, and members—can play important an role in ensuring that change is productively addressed. Often, of course, change elicits feelings of anxiety. Proactively approached and candidly addressed, however, change can increase the viability of the organization as it challenges the future. And this takes us to the choice we explore in this chapter: change management or change leadership?

Often when we think of leadership we think of executives and board members of the boards. Usually, when we think of management we think of line managers. This compartmentalized view, although often accurate, is also often incomplete. Herman and Heimovics (1991: 131) observe that active nonprofit managers "have discovered that few activities in human endeavor are more fascinating, more challenging, and more rewarding than leading a nonprofit organization with an important mission." Such individuals are what we call "change managers", and part of their role involves acting also as "change leaders".

When change is warranted one must turn to such change leaders and change managers. Together, both sets of organizational actors are needed to address the challenges of change. Leaders must candidly examine goals and stimulate action while managers must direct and coordinate. The lines between leadership and change, when examined in the context of change, often become blurred.

Ultimately, it is the responsibility of all members of an organization to ensure that the challenges of change are adequately addressed . Nonprofit organizations are rightly advised to incorporate broad-based participation if they are to act effectively, as all members of the organization are affected by change in some fashion. This constant flux requires everyone in the organization to learn new processes, forge new relationships, and discover innovative ways of accomplishing tasks. And so the question remains: Change leadership or Change Management?

Organizational development has many facets, none of which is called upon more regularly than the refinement and improvement of management skills and structures. Strategic planning, in its attempt to help lay a roadmap for the organization, is critical to the success of change management. Continually examining the processes of the organization can help to illuminate the need and avenue for change. Implementing new technological applications is another part of change management. As the needs of the community or constituents change, technological advances in telecommunications and information handling can allow an organization to make change more effectively. Also vital, and often overlooked, is the development of a organizational culture and environment that supports change. Such an environment can be created most effectively through communication. With change management, communication is an enabler to changing the culture, behavior, and strategic direction of the organization.

Taken as a whole, the coordinated linkage of culture, behavior and strategy within a web of communication forms what we call "change management". Change management is uses organizational tools to ensure the continued success and viability of an organization. It not only rearranges established policies, practices, and procedures—it also creates new ones.

The requisites for leadership in a time of change are many. Change leadership requires the ability to communicate, empower, develop mutually beneficial relationships, innovate, learn, teach, and motivate others. Change leadership offers the opportunity to create a organizational culture that learns and a work environment that rewards. The task of the leader is to create a synergy from which perpetual energy can push change to the forefront of understanding for all individuals in the organization.

An example of effective change management in conjunction with change leadership has been the transformation of United Way organizations across the United States (Billitteri, 2000). Brian Gallagher, president of the United Way of Franklin County, Ohio observes that "Our business is community development, quality of life and human development." This rebirth of goals, moving from a collector/dispenser of goods and services to an advocate of quality of life, requires change at all levels. "The new strategy marks a significant attempt to rebuild donor loyalty and break away from an entrenched United Way model of operating (Billitteri, p. 21)."

Following on an era of management disgrace in the 1980s under the leadership of former CEO William Aramony (see below), United Way of America, the national facilitating organization of United Ways, has created a variety of productive initiatives. Included among these is "Project Blueprint", which seeks to increase the involvement of ethnic minorities as leaders on boards of local United Way agencies. Funded by grants from the W. K Kellogg Foundation and Ford Foundation, this project has involved more than 3,000 men and women in 50 communities in a variety of volunteer leadership experiences. Collaboration with key community leaders to help cities determine their most urgent social problems and then come up with the money and ideas to tackle them asks for both change management and change leadership to move to the cusp.

Mark O’Connell, president of the United Way of Metropolitan Atlanta, defines his task as bringing communities together, helping them "agree on what the work is," figuring out how to do it, and then holding "themselves accountable for returns, results and impact" (quoted in Billitteri, 23).

Change itself is normally undertaken to improve some aspect of an organization. As the organization transforms itself, it assures its survival and relevance vis-à-vis its community. The origin of change helps to suggest who ultimately has control. If change originates externally, it can dictate urgency. If change originates internally, it can help to nurture the goals important to the organization. Managing change is a method through which an organization prevents being managed by change. The issue of change becomes one of proaction versus reaction. Will the organizations push itself forward? Or, will it rather, allow itself to be pushed by the strongest forces as play in the broader society? An organization is transformed constantly by the dynamic environment in which it operates, but it can shape its responses to those forces.

Nonprofit organizations have a unique position in society. As both Kotter and Cooperrider assert, "vision", the stock in trade of the third sector, is a vital means of examining and introducing change. What differentiates AI from the and his business approach of Kotter is the conception that nonprofit organizations can live without the fear of failure, extinction, or lack of profits that drives Kotter’s model. The bottom line for nonprofits, after all, is only partially dollar-based. It is a fuller organizational view, which relates to the widest variety of quality of life changes, the positive advances that enhance life opportunities or prevent destructive behavior, keeping the market mindset in an appropriately secondary role. Thus, as the nonprofit organization approaches change, it can move forward with less trepidation, and from a different pattern of motivation and commitment.

We do not live in a world where one can assume that all members of the third sector are directed by the desire to serve broader social interests. The nonprofit sector does contain too many organizations that basically serve as tax-exempt businesses, and which deserve removal from the privileges of tax-exemption and the good name of the sector (Cf. Van Til, 2000). However, we believe it safe to say that a majority of managers and leaders of the third sector do share a vision that the third sector’s role is to serve by articulating and implementing visions of a better society.

Voluntary and nonprofit organizations often work best by promoting systematic change in their own community. Collaboration is key to this effort. By sharing information, ensuring that the necessary processes are available for community change, making good decisions the nonprofit organization advances the welfare of the areas they serve. Partnerships can be found through government, through the business sector and through the obvious collaboration of the nonprofit sector. Change, in the fashion presented here, requires the generation of a vision and applies the elbow grease of motivated action to drive toward implementation.

One of the largest obstacles to change is "getting people to change." Organizations, individuals and communities get caught in "comfort zones" that add to retrenchment and slow change. However, if an organization has been constructed by dedicated leaders, and is staffed with competent managers, and if its reason for being has been kept alive in the process, change can be achieved more effectively. We suggest the following steps in the process:

1. Engender an organizational culture that builds on the energies of each and every participant. Open lines of communication, in multiple directions help to nurture organizational culture. Through these lines of communication issues, ideas and goals are transmitted allowing the leadership and management of an organization to shape the message.
2. Build a collective vision of community development. By working collaboratively with others, the needs of the community are discovered, and the mission of the organization begins to emerge clearly.
3. Engender Sector Growth by staking out the future. By developing blueprints of collective change that improve aspects of life in the community an organization serves, capacity is built both within the sector and within your organization.
4. Develop new partnerships that blend service to the community and advocacy of needed change. Once the vision is defined, the real proof of the pudding emerges from what is accomplished. Serving needs when they are clear, and speaking strongly for what needs to be done are the two great tools of nonprofit organizations.
5. Reinforce positive change and fine tune activity and process. Appreciative process mandates one of the oldest principles of voluntary action: to tell people one works with how important is their work. Giving the further respect involved in fine-tuning that work to help make it even better is another splendid way to make an organization effective.

It is time for us to answer the question posed by this chapter: Change Leadership or Change Management? Our answer seems clear: not "either-or" but rather "both and". Change leadership to make it more inclusive, appreciative, and oriented to the advance of mission. Change management to make it support leadership, appreciate participation, and reflect mission.

But more: Develop a style called "change leadership" to continually address the shifting needs of organization and community. And manage the organization with a style called "change management" to keep alert to the ever-newness of the organizational task.

We next present eight cases, some showing how to do things right, others showing what can go wrong. Each of these cases has been developed by this chapter’s senior author, and several are reported elsewhere (Cf. Van Til, 2000, Van Til and associates, 2000). We start with a "pure" leadership case, the structure and process of organizing within the Religious Society of Friends.

Quakers, as members of the Religious Society of Friends are known, run a low-budget faith-based organization. Most Meetings (what other churches would call parishes) do not hire a minister to manage their affairs and guide their services. Quakers co-produce their own religious services by allowing attenders to rise and speak as they happen to be moved to do so. When no one speaks, the silence that is at the heart of Quaker worship prevails throughout the Meeting House.

A Quaker meeting, like the clusters of Meetings in regional structures called Quarters and Yearly meetings, governs itself by means of a series of working committees. Each member of the meeting assumes a responsibility for governance, and minimal employment is made of paid staffers. Within the Quaker system, with its strong emphasis on service and advocacy beyond the walls of the Meeting, leadership is broadly shared and management is largely a matter of voluntary commitment.

Within the various structures of Quaker governance, a number of principles emerge that characterize the process. One list includes the following, asserting that "Good Quaker governance":

• Joins participants in a shared process of discernment (reflection)
• Inspires a group to the best and fullest use of its members’ skills, experience, and wisdom (participation)
• Values and employs effectively the particular contributions of each participant (respect)
• Recognizes the collective advantage that accrues to a diversity of experience, perspective, and personal characteristics (diversity)
• Seeks a sense of the meeting by searching for, and developing, a substantial unity (consensus)
• Aims toward the achievement of valued actions, decisions, programs, and consequences (proactively)
• Leads and instructs its participants toward clear roles for implementation and follow-through (responsibility)
• Grows and changes dynamically as needs, missions, and environmental constraints emerge and change (flexibility)

The process of good Quaker governance values both process and outcome, and is notable for its effort to include the voices of all members in arriving at a consensual resolution. It polar opposite may be found in a second case, in which the prerogatives of the manager came to run roughshod on both mission and organizational process.

Power corrupts, we have been told, and the power of a nonprofit manager who combines his own force into an iron triangle with that of a complaisant board and a fearful staff has few limits. A remarkable book by John Glaser, formerly a key associate of United Way of America’s shamed executive, William Aramony, shows how easy it was for a nonprofit manager to forge that iron triangle into a force that provides one with all the wealth, sex, and power that anyone could wish for. (Of course, the down side is that you might get caught, as did Aramony, be tried and convicted, and spend most of the rest of your life in prison.)

Glaser's book is about United Way’s head, heart, soul, and various other bodily parts at United Way of America in the Aramony years. Glaser gives us a peek behind the veil of nonprofit piety, beginning with his own initial employment interview with Aramony. Glaser was a community organizer and activist, and Aramony is quoted as saying to him: "Your resume is full of shit, Glaser, but I like your eyeballs" (Glaser, 1994: p. xxiii). Later on, Glaser recounts, a similar test was applied to the women who worked for Aramony: "(I)t often appeared that raises and perquisites were increased in direct proportion to their attractiveness."

With their pleasing eyeballs and feminine charms, his staff accepted their rewards in higher than competitive salary, and swallowed the abuse that Aramony dished up on the slightest pretense. The madhouse that was the elegant United Way headquarters in Alexandria is described in a vivid dissection of Aramony's leadership style. The workplace was a roller coaster that shifted rapidly through the ranges of manic and depressive moods of the leader. Aramony would scream "Fire his ass" about an employee, and then agonize when he learned that his order had actually been implemented. "Only when Aramony was out of town could the staff begin to do productive work" (Glaser, 1994: 74-75).

"Aramony required planning for everyone but himself." "(H)e felt he 'owned' people because of the high salaries he paid them (Glaser, 1994: 81, 91). Glaser (1994: 104-106) presents a powerful recounting of the staff roles made available in Aramony's fiefdom:

• Chief Financial Officer, a friend or long-term associate who "rarely, if ever" questioned Aramony's expenditures;
• Office Wife, the administrative assistant who traveled with the boss, occupied a room connecting to his, and was available for personal service 24 hours per day;
• Bagman, who handled Aramony's private financial affairs and discharged unwanted employees (a role Glaser apparently played for several years);
• Court Jester, a male who bonded with the chief and joined him in his favorite pastimes of dining, gambling, and playing the horses; and
• Golden Boy/Girl, the new member of the team who was counted on to resolve any organizational problem, but then quickly fell from favor.

Board roles played during this organizational interlude were no more flattering. While in daily life playing the game of corporate or nonprofit management with apparent success, board members clearly were invited to check their good judgment at the door when entering United Way meetings. Aramony staged his board meetings with meticulous care, making members as comfortable as he could, and accepting in return their consideration of him as not only "the expert", but also one who embodied "all of the noble virtues of those who spend their lives serving others." Among the board members of United Way of America and its infamous spin-offs were such notables as then Girl Scouts of the U.S.A. executive Frances Hesselbein, identified by Glaser as a "close Aramony colleague (Glaser, 1994: 167).

Readers of Glaser's volume will wonder why he allowed prominent nonprofit attorney Bruce Hopkins to write both an Introduction and an Afterword to his volume. These chapters do offer some comic relief on the matter, especially when Hopkins (p. xix) observes: "Readers will find this statement hard to believe, but I will repeat it: Bill Aramony did not break a single federal law."

In a splendid concluding chapter on "lessons learned," however, Glaser (1994: 235-248) redeems himself by offering the following 13 pieces of advice, presented verbatim below:

1. A charity is a charity. It is part of the voluntary sector, not the business sector, and must abide by the constraints imposed by the history, ethics, and public perceptions of the sector.
2. Charitable activities must be defensible in the court of public opinion.
3. Charities must represent constituents.
4. Character is more important than administrative ability.
5. Boards must really evaluate staff.
6. Boards must know their legal responsibilities.
7. Boards should have conflict of interest statements.
8. Boards should have viable internal standing committees.
9. Boards should have a risk management plan.
10. Boards should set acceptable salaries and ranges.
11. Boards should enforce equal application of policy.
12. Boards should set terms of office.
13. Boards should bring in outside evaluators.

Glaser suggests that the basic lesson in the United Way fiasco involves the development and sustenance of countervailing points of power and influence within the nonprofit organization. The painful case that he recounts reminds us that there is no special virtue that inheres in section 501 (c). As the distinguished scholar of nonprofit action, Ralph Kramer (1998) has demonstrated in summarizing a quarter-century of comparative research on nonprofit organizations: the legal "ownership" of an organization-whether it is governmental, nonprofit, or for-profit may be far less important than the quality of services provided by the organization. Form may mean much less than function in assessing the nonprofit world.

The price of effective organization is continuing vigilance, for nonprofit organizations can be useful vehicles in society. When led by someone of dubious will and character, however, they are among the easiest of organizations to corrupt.

The message is often delivered to nonprofit organization executives: Become more entrepreneurial, nonprofit execs are often urged by trainers, authors, and other pundits in the field. Find a service niche, your own place in the nonprofit market, and make it pay for your organization! Don't be so nice about it. Learn to be more aggressive!

When the scandal at the Foundation for New Era Philanthropy hit the press in 1995, it was clear that Jack Bennett, New Era's founder, was as consummate a nonprofit entrepreneur as the field has ever known. He played every emotional chord perfectly to convince his donors of his personal commitment to the variety of causes, largely religious, to which his foundation was apparently dedicated.

Donors and donees alike were shocked by the revelations, as well they might be, having handed over sums up to the $11 million given by one hapless Rockefeller, and down to the $300 provided by a group of school kids in West Philadelphia, purportedly for the purpose of learning about philanthropy. (What a foundation!: Everyone a donor, no one a beneficiary-save for the nonprofit exec himself, of course, and a few family and friends.)

One disillusioned New Era-ite confessed to his own dismay at judging character when he reflected on Bennett's frequent participation in Philadelphia area prayer breakfasts. Bennett, this acquaintance noted, "prayed so well." Another New Era broker, a minister, solicited donations from putative "donees" and then had the audacity to invite a further donation in the form of a "thank offering" to his own nonprofit front organization.

How were Bennett and his New Era partners consummate nonprofit entrepreneurs? Let us count the ways. First, they knew how to talk the talk: their work at the foundation was "pro bono"; they acted as true volunteers; their work aimed only at the purposes of doing God's will on earth. And, second, they could walk the walk: they knew how to set up for-profits to self-deal with; they fabulously enriched themselves by contracting with their own firms for services; they knew how to take their pieces of the action.

The word "entrepreneur" is best translated from the French as "the middle-man who takes"--"entre" meaning "between"; "preneur" meaning "taker". Bennett put himself between the donor and the donee, and how he did take!

The concept of entrepreneurship was introduced into the social sciences by the Austrian political economist Joseph Schumpeter, and has been lionized since in business schools as the answer to a variety of ills: first the rigidity and bureaucratization of traditional corporate structures, and more recently the failure of the economy to provide jobs for business school graduates. The rise of nonprofit management as an arena for education and training has moved the concept into our field, for similar reasons.

But entrepreneurship without ethics can be a dangerous force. Without a grounding in the traditions, values, and ethics of voluntary action, without a rooting in organizations accustomed to abiding by both the letter and the spirit of the law-the entrepreneur is nothing but another middle-person out to grab and take, a broker in it for self-interest, a corrupter of the nonprofit dream.

The next case involves a gathering of managers, mostly ministers, as well as a number of volunteer participants they designate. This group was organized in 1999 in the Fettersville neighborhood of Camden, New Jersey. Fettersville was developed by Richard Fetters, himself a Quaker as well as political and civic leader, in the year 1833. In that year, Fetters purchased land from Charity and Grace Kaighn between Line and Cherry Streets and Third Street and the Delaware River and laid it out into lots offered for sale at low rates and easy terms. Among the buyers of these plots were a number of freed slaves, several of whom later joined the ranks of the city's most respected residents. The remarkable past of this area reveals a place of community pride and authentic historical wonder that is today in an active process of rediscovery. Although not much of the physical fabric of Fettersville remains, a group of its citizens are seeking to base the future of the neighborhood on the principles and traditions that shaped its past.

The contemporary neighborhood known as Fettersville consists of about half of Camden City's Bergen Square census tract. The boundaries of the neighborhood run from Line Street to Atlantic Avenue and from Broadway, west to the Delaware River. These approximately eighty square blocks include a population that is 65% African-American and thirty- five percent primarily Hispanic. The layout of this community is split between residential and industrial uses, which has created a serious land use dilemma. The residents of this neighborhood find themselves immersed in an area of abandoned buildings, trash-filled vacant lots, open-air drug markets, and industrial excesses such as fumes and other wastes.

Fettersville contains one of the largest numbers of abandoned buildings in the entire city of Camden and until the recent implementation of a new water main in the area this neighborhood had not experienced any noticeable development investment in nearly thirty-five years. Furthermore, the new water main required the tearing up of major city blocks running through the community, which the city have yet to repave. The abandoned building close-up program is no longer in the community, which has encouraged problems of squatters and drug markets. Keeping in mind that these abandoned structures are located directly adjacent to occupied homes, concerns over sanitation and security plague the area. This neighborhood has become a haven for the mentally ill and homeless of the city, while the children who reside in this area have few places to go. Fettersville lacks any public park or open green space in all of its eighty square blocks. In fact the children of this neighborhood are faced with dangerous elements every day, such as the huge open ditch at the corner of Third and Cherry Streets.

The current reality of industrial uses adjacent to residential uses has caused major problems in the community. Fettersville has several brownfield areas within its boundaries. Industrial companies who have gone bankrupt or simply moved out of the area have left behind contaminated sites. Also, in recent years there has been a massive encroachment of quasi-public corporations, such as the South Jersey Port Corporation, gobbling up vacant and abandoned property in the neighborhood for non-residential uses. Meanwhile, Fettersville has not experienced the development of any new housing in nearly eighty years and very little renovation has been done on existing structures. This neighborhood like all other areas of Camden City has become a host to the low-income, elderly, the disabled, the unemployed, and underemployed.

Over the past half-century, neighborhood residents failed to influence policies of growth-dominated municipal planning within the city of Camden. More recently, a range of nonprofit corporations have proposed and executed several projects involving the development of waterfront lands along the Delaware River. These plans have not brought any significant benefits to the residents of neighborhoods like Fettersville. But there remains in that community a beacon of hope that has shone since the development of this community by Richard Fetters. Contemporary visions being developed from within the neighborhood include the embracing of subcultures and the resolution of ethnic tolerance that could rebuild a sense of community pride. This neighborhood has discovered an opportunity to address its pressing current needs by reinventing its submerged past.

Fettersville began that process of rediscovery supported by a crumbling physical structure, a weakening economic base, and a set of organizational assets primarily consisting of a set of churches and other faith-based organizations. A recent "civil society census" discovered active organizations within the community within only nine of the 25 possible categories identified by Kretzman and McKnight (1993).

Traditional means of community organization within communities like Fettersville tend to be ineffective in the contemporary city. In Fettersville, a deep sense of distrust, both of established authority and of each other, characterizes many residents. Looking into the future a group of local residents and organizational leaders came to the realization that the implementation of state/government developed initiatives have failed to reach deeply into the community. The interaction among certain residents of the area gave rise to an emergent sense of community and the creation of a grassroots organization, a collaborative of local groups who took upon themselves the power of reinventing a community.

The Fettersville Collaborative seeks to act as a celebration of the meeting of minds, ideas, agendas, and even personalities. The Collaborative has organized itself in the face of the many difficulties and obstacles involved in democratic participation. It embraced its community because Fettersville's residents have nowhere else to go, plagued as they are by handicaps of race, economics, education, and social fabric. The creation of a collaborative marks a sense of hope among a group of low-income urban residents that recognizes the strength of their ties to a community they cannot afford to leave. In that commitment, they are joined by others tied to community through ancestry and belief. Included in the Collaborative's research and activity are several elderly residents, who remember a time when the social fabric was not so torn, and a set of church pastors, tied to the community by the assignment of their ministry. The rediscovered history of this urban space has sparked a resurgence of African-American history and tradition within this bleak Camden urbanscape.

The grassroots neighborhood organization that has developed in Fettersville draws upon support from several faith-based groups in the area, as well as from a number of individuals attracted to the process of discovery and organization. Its process is a dynamic, and often turbulent, one. Meetings of the collaborative evince the dynamics of group organizing in a raw and diverse urban context. The conflict that inevitably arises is often based in passions radiating within many members of the collaborative. But the determination of this community to reinstate family history and community pride has revealed a remarkable power found in destroyed areas of urban America. The "end of the line" has stopped in this community at a place where communication and mutual partnership is almost mandatory.

The Fettersville Collaborative experienced a challenge to its viability during the study period (Spring 2000), when one of its constitutive members withdrew from participation in protest against what it perceived as inappropriate behavior on the part of representatives of another church. This withdrawal effectively stymied the collaborative from taking any action, as its by-laws require active consent of all members any action can be taken. Considerable meeting time was consumed during the impasse period by repeated comments from the members whose behavior had been rendered suspect of "negativity", and, at this writing, it remains unclear how and when this particular conflict will be resolved, if at all.

Other differences between participants within the collaborative were also addressed in a direct fashion not without a certain testiness of tone. Usually initiated by the lay representatives of one collaborative member, these challenges were directed toward resource persons from city and university who were occasionally seen to be lagging in the delivery of information or studies they had promised. The statements were usually explained in terms of "telling truth", and in one case gave rise to a heated "back and forth" exchange of the following sort:

A: You never did the narrative we asked you to do.

B: I am doing it now.

A: We may not want you to do it now.

B: Your demand was for me to start at the beginning.

A: It was a request.

B: It sounded like a demand to me.

Conflict between members of the collaborative was not all that troubled the effort; occasional conflict within participating member organizations was also evident. At times the executive of a participating organization was observed to have withheld information from volunteer participants within his own organization, in effect protecting his organization from what might have been perceived as an untimely interest on the part of the collaborative.

The President of the collaborative during this period accommodated these various conflicts with considerable tolerance. In his view, the collaborative’s aim was to bring needed development to Fettersville, and if that development was at times a noisy and even sloppy process, it was a process leading to a worthy end.

Deborah Gardner, in a study of the founding process of the Nathan Cummings Foundation, describes, step by step, the transformation of one man's vision into an effective and humanely administered nonprofit organization. The visionary, a grocer named Nathan Cummings who came eventually to direct the Sara Lee Corporation, established the foundation in 1949. The enterprise moved into high gear when Cummings died in 1985, leaving it assets worth $200 million.

Nathan Cummings hoped his foundation would allow his grandchildren to join in common cause, and "accustom them to the understanding what we must contribute to worthy causes, thus sharing our good fortune with those less fortunate than we are." His children and grandchildren pitched in enthusiastically to this task, and participated actively as volunteers in building what has become one of our country's most active and enlightened philanthropies.

Gardner's study of the foundation rehearses familiar lessons of organizational development, lessons not always learned or followed by leaders of many nonprofit organizations. She shows how the Nathan Cummings foundation struggled in its process of growth, and ultimately built into its very structure five enduring truths of successful nonprofit management:

1. The organization embodies, and does not outgrow, its founding spirit of voluntary concern. In the Nathan Cummings case, family members committed to serve the board without compensation, and that tradition continues to this day as non-family members play increasingly central board roles.
2. Board members are selected with an eye toward the future as well as a respect for the past. Gardner shows how non-family members were carefully selected, with the assistance of a search firm. At the same time, younger family members were groomed for eventual board service by being selected as "board associates".
3. The Board enables itself to struggle with the definition of its role, its workload, and its relationship to the executive director. In the Cummings case, the board worked hard to shape its own agenda, eventually adopting the practice of a regular retreat session to work through tension and workload issues.
4. The inevitability of board-staff tensions is recognized, confronted, and resolved--at least for the time being. The relationship between an active and vital CEO, like Cummings' Charlie Halpern, and a powerful and committed board, like the one built at Cummings, was never all sweetness and light. Gardner quotes Halpern, a prominent public service lawyer: "The proper line between management and board had to emerge from a process, not start as a given. I started with it as a given." As the organization matured, direct lines of communications were developed and encouraged between board members and mid-level staff, and considerable progress was achieved in developing a sense of "harmonious partnership" among all members of the organization.
5. While the internal organization of a nonprofit is a crucial requisite for its success, its ultimate test lies in the generation of an effective external program to advance its mission and goals. At the Nathan Cummings Foundation, evaluation became a central activity of the foundation's annual retreat, or "decision-making forum". Gardner writes that "The end result was an entirely new way of evaluating grant programs, proposals and projects, dubbed 'Objectives, Strategies, Outcomes', or OSOs for short."

These five simple, but also powerful, tests--voluntary concern, quality of board, executive leadership, partnership with staff, and external productivity--can be applied to any nonprofit organization. Consider three major Washington-based groups: CIVICUS (the world alliance for citizen participation); America's Promise (the follow-up vehicle to the Presidents' Summit on America's Future); and NCRP, the National Committee for Responsive Philanthropy, a leading advocacy organization in the field--the organizations that are subjects for three final cases presented in this chapter.

CIVICUS, founded in 1994, was governed in 1998 by a board of directors chaired by the distinguished Indian community developer, Rajesh Tandon. The board is composed of citizens of nineteen different nations, working in tandem with Executive Director Miklos Marschall, the former Deputy Mayor of Budapest. Its founding board process was a lively one, as members assembled twice yearly from various corners of the earth. In 1997 a board retreat was held, facilitated by an outside expert.

A recurring concern at these meetings has been a choice between organizational models: On the one hand the traditional North American nonprofit model of a strong director as primary among board equals, on the other the traditional European model of a strong board chair guiding the efforts of a staff cum secretariat. Marschall, who himself came to see the values of the strong executive model, reports that dialogue on this issue remains lively, and that a "hybrid" model has emerged, in which conflicts are frequent, but typically resolved by "tolerance and patience."

CIVICUS quite clearly passes the five tests derived from the Cummings experience: Its board members volunteer to gather from the corners of the globe; they have been carefully selected to balance a wide range of diversity concerns; they struggle actively with their role and their relation to the director; they directly face, and seek to resolve, the inevitable board-staff tensions that characterize the modern nonprofit; and, together, board and staff have succeeded in creating an organization that has been extraordinarily productive.

Few organizations so young can point to the range of achievements CIVICUS has amassed in four short years: two highly successful world assemblies, a small bookshelf of useful publications, policy positions hammered out by widely varying, and influential, constituent participants. Its current agenda involves a major role in the United Nations' emerging "Millennial Forum", and the creation of a process to strengthen ties between corporations and civil society organizations throughout the world. As board chair Tandon puts it, these efforts are being designed to create a future in which nonprofit organizations will fill "front-row seats" in all aspects of the global development process.

America's Promise, the second nonprofit we hold to the Gardner tests, has chosen a very different organizational approach than CIVICUS. An important part of the difference reflects AP's founding conception as being a temporary organization, intended to complete its work by the year 2000.

Organized during and immediately after the Presidents' Summit on America's Future of April 1997 as its follow-up vehicle, AP's first year has been organizationally turbulent. Within its first year of existence, AP was already under its third executive director; the organization has also experienced a fair amount of turnover among its board of directors, as well.

Applying the Gardner tests, one sees that AP took a few tentative steps (Test One) toward incorporating the voluntary spirit it so vigorously advocates into its own organizational life, particularly if the provision of roles for interns and board spouses are counted as volunteering. Its board, however (Test Two) appears to have been selected on the most traditional of grounds from the ranks of corporate and political America. That AP has not chosen to include young persons on its board, including reclaimed youths at risk, seems to counter its elevated rhetoric regarding youth service and empowerment.

As this organization ages, it has yet to demonstrate a maturation of its board (Test Three). America's Promise has yet to harness a board fully committed to providing the accustomed work, wealth, and wisdom. Three figures continue to dominate its process: Board Chairman Colin Powell, philanthropist Ray Chambers, and Senior Vice-President Gregg Petersmeyer. The result?: An organization built that strongly favors the traditional European model (and probably, a wag might observe, its Prussian variation).

Compare (Test Four) the CIVICUS board and staff resolving their conflicts through tolerance and patience with the observation of a Presidents' Summit volunteer, there at the founding. She recalls seeing AP's first director completely distraught, having received the order from General Powell to completely reassemble several hundred copies of a press packet because one telephone number listed therein was off by a single digit.

Operating in a mode of continuous short-term, or even crisis, planning, America's Promise is certainly beginning to make its mark within circles of corporate and community life in many American cities (Test five). Its real impact, however, remains to be assessed--the direct impact it will ultimately be found to have had on the quality and quantity of attentive response to the needs of millions of American youth at risk in hundreds of cities and towns.

The third organization to be held to the Gardner test, the National Committee for Responsive Philanthropy (NCRP), was founded in 1976 out of the Donee Group of the Filer Commission, a major review of philanthropy’s structure and process. As the Donee Group, an informal component of the commission’s process, those who would come to call themselves the NCRP represented a set of organizations whose interests, they feared, would continue to be ignored by major philanthropic institutions. These interests and organizations represented an array of individuals and groups disadvantaged by structures of privilege and power in American society, a coalition NCRP would come to identify as "disenfranchised" from participation in the recognition and rewards of philanthropic giving.

By 1978 NCRP the group had taken its organizational form, and filed an amicus brief in a lawsuit challenging the fairness of the Combined Federal Campaign (the CFC), a struggle it would persist in for two decades. In the following year, the NCRP held its first national conference, on the topic of alternatives to the United Way, another interest it continues to hold until the present day.

As the NCRP developed in its work, a range of issues was addressed, foremost among which were the accountability of philanthropy, the accessibility and monopoly of United Way, the openness of the Combined Federal Campaign, the impact of community foundations, corporate giving to racial/ethnic populations, and the emerging role of conservative philanthropy and public policy. By 1998, NCRP, led throughout its entire organizational life by Robert Bothwell, had become widely recognized throughout the philanthropic world as an important advocate for social justice and fairness in philanthropic practice.

Applying Gardner’s tests to NCRP, we see that NCRP has sought to build a strong board into its structure (Test One), and to develop a lean staff of persons well acquainted with philanthropic practice into its structure.

Its board, (Test Two) has been carefully selected to represent the diversity of its principal constituencies: activist organizations, and particularly those representing groups disenfranchised from conventional philanthropic process—women, people of color, poor persons, and the like.

As this organization aged, it gradually came to the recognition that its leadership was beginning to "age in place" (Test Three). After 22 years of executive service, Robert Bothwell, long perceived as the very spirit and voice of the organization, announced his resignation to assume a three-year research position with the group. The replacement process promised to present severe challenges to the organization, accustomed as it had become to Bothwell’s steady and devoted leadership hand.

The NCRP board committed itself to a determined process of governance, decision-making, and conflict resolution (Test Four). Board meetings were regularly held, and occasionally took the form of retreat-type reflection.

As a national advocacy organization, whose recommendations are based on solid research, NCRP clearly made its mark in circles of third sector policy and practice. Like the Nathan Cummings Foundation and CIVICUS, it found that a partnership between an able and determined executive and a willing and independent board provided the best path to achieving its organizational goals.

The cases we present demonstrate that change is often a difficult process. If an organization does not have steady leadership to provide vision and direction in the dynamic environment in which it exists, it can lose its way as did the United Way of America under Aramony. Without leaders who can anticipate change, unify forces and communicate ideas—change is inevitably doomed. Managers must ensure that leaders are kept abreast of environmental changes and changing clientele expectations, even if their role is as constrained as it is within the Quaker Meeting. Managers can also ensure that through open communication channels, change is effectively implemented, monitored and evaluated. Bothwell at NCRP, Halpern at Nathan Cummings, Tandon and Marschall at CIVICUS all showed that change can be mastered within the nonprofit organization. Externally driven or internally created, change will have its effect. The question is how it can be shaped to advance the organization's vision and mission.

Let us take a closer look at how the seven nonprofit organizations that are the subject of the cases above chose to address change. Table 1 shows the variety of choices.

The eight cases we present range from the proudest successes to the most shameful corruptions of nonprofit organizations in recent American life. They indicate that both leaders and managers can perform their associational roles successfully or unsuccessfully. And the cases suggest the responses that may be taken to reward or correct patterns of leadership and management.

Successful patterns, Table 1 suggests, are manifold in the nonprofit world. A leader like NCRP's Bothwell can shape and manage an organization well over a long period of time. A manager like Nathan Cummings Foundation executive Halpern can perform critical leadership as well as administrative roles.

Nor need either function be filled by a single individual acting alone. A team like CIVICUS' Tandon and Marschall can play the roles of leader and manager, respectively, and build a thriving and productive organization. And, as the Quaker model suggests, teams of leaders can themselves manage a voluntary organization successfully and productively.

Success, sweet as it is, is by no means guaranteed to a nonprofit organization. An organization like America's Promise, headed by a beloved national hero, can still perform erratically. On a local level, the effort to create a community collaborative, as in Fettersville, can founder in the face of the seemingly conflicting interests between major nonprofits within the community. Even more discouragingly, charlatans like Aramony and Jack Bennett can corrupt a nonprofit organization to the point that its very viability is threatened.

In these difficult cases, when it is appropriate to change leadership, or to change management? We believe that when an organization is struggling, such as America's Promise or the Fettersville Collaborative, the proper intervention should take the form of assisting the leader or manager whose actions are most responsible for the organization's distress. Of course, if the leader involved is a retired military hero like Colin Powell, not just anyone can walk into his office to suggest he rethink his ways. Making such interventions, however, is the job of the nonprofit board, difficult as this task can be. If the problem resides with one or more of the organization's managers, the board may find the task easier to address, particularly if its leader can provide direction to the task.

Once an organization crosses the line into wholesale corruption, there is often no viable alternative to the removal of the offending leader or manager. If the board has not been drawn into the corruption, firing the manager may both remove the problem and allow the organization to right itself. Such was the course successfully taken by United Way of America. If, on the other hand, the board and its leader are the perpetrators of the offensive activity, it may be necessary to dissolve the entire organization, as was done in the case of the Foundation for New Era Philanthropy.

Change, we conclude, is an inescapable reality in nonprofit organization management. We either cope with it, or it copes with us. Lead for change, manage for change--or find ways to change leaders, or change managers. Firing is the last resort; teaching and learning better ways of leading and managing is far less disruptive and often all that is required. However, the responsibilities of making nonprofit organizations are great, and the potential of this organizational form can easily be wasted. Change must be served.

REFERENCES

Billitteri, Thomas J., "United Ways Seek a New Identity". Chronicle of Philanthropy, March 9, 2000.

Cooperrider, David L., ed. Appreciative Inquiry: Rethinking Human Organization Toward a Positive Theory of Change. Stipes Publishing L.L.C., 1999.

Gardner, Deborah S., A Family Foundation: Looking to the Future, Honoring the Past. New York: The Nathan Cummings Foundation, 1997.

Glaser, John S. The United Way Scandal: An Insider’s Account of What Went Wrong and Why. New York: Wiley, 1994.

Herman, Robert D., and Heimovics, Richard D. Executive Leadership in Nonprofit Organizations. San Francisco: Jossey-Bass, Inc., 1991.

Kramer, Ralph M. "Nonprofit Organizations in the 21^st Century: Will Sector Matter?" Working paper of the Aspen Institute Nonprofit Sector Research Fund, Washington, D.C., 1998.

Kotter, John P. Leading Change. Boston: Harvard Business School Press, 1996.

Kretzmann, John P., and John L. McKnight. Building Communities from the Inside Out. Chicago: ACTA Publications, 1993.

Van Til, Jon. Growing Civil Society: From Nonprofit Sector to Third Space. Bloomington, IN: Indiana University Press, 2000.

Van Til, Jon, and associates. "Associations as Assets in the Urban Community: A Study of Two Inner-City Neighborhoods in Camden." Camden, NJ: Senator Walter Rand Institute for Public Affairs, Rutgers University, 2000.

June, 2000

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