Nonprofit Entrepreneurship: Organizational and Personal Traits

This report investigates the influence of organizational and personal characteristics on the entrepreneurial intentions and activities of nonprofit organizations (NPOs). It explores the challenges faced by NPOs in securing funding and maintaining their social service focus while pursuing revenue generation. The study examines the impact of executive traits, such as attitude, subjective norms, perceived behavior control, and self-efficacy, on entrepreneurial intentions, along with organizational factors like an active board of directors, management/community support, and collective efficacy. The research employs the theory of planned behavior to analyze these characteristics. The report also defines key terms like intrapreneurship and entrepreneurship, providing a comprehensive literature review of relevant studies. It highlights the importance of understanding these traits for enhancing the long-term sustainability and entrepreneurial success of NPOs. The report emphasizes the significance of social entrepreneurship as a means of balancing financial sustainability with social purpose and the implications for policy makers and nonprofit leaders.

Running head: IMPACT OF ORGANIZATIONAL AND PERSONAL TRAITS ON NON-
ORGANIZATION’S ENTREPRENEURSHIP
The Impact of Organizational and Personal Character Traits on a Nonprofit Organization’s
Intention towards Entrepreneurial Activity
Leigh Lester-Holmes
Maharishi University of Management

IMPACT OF ORGANIZATIONAL AND PERSONAL TRAITS ON NON-
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The Impact that Organizational and Personal Character Traits have on a Nonprofit
Organization’s Intention Towards Entrepreneurial Activity
Nonprofit Organizations(NPOs) are charged with “problems of our society in the twenty-
first century face are— poverty, racism, environmental degradation, lack of health protection,
declining trust in governments” (Eisenberg, 2005). In order to deal with these issues, many
organisations struggle to maximize funding for their activities as the sources of funding vary
widely from donations to the sale of goods and services. However, most receive a large part of
their funding from government sources (Renz, 2010). With cutbacks to government and private
funding in recent years, many agencies have struggled.
It must be acknowledged that NPOs have always for new ways of raising funds. This
effort has intensified as a result of the cutbacks as stated. This includes strategies that have
historically been for-profit. Unlike their for-profit brethren, NPOs have social service focus and
for that matter experience a challenge to maintain that while also focusing on revenue
production. Social entrepreneurship appears to be the happy medium between financial
sustainability and social purpose (Mair & Noboa, 2006). NPOs have often found it difficult to
garner the support to compete in the for-profit space (Tuckman, 1998).The question I have asked
is why more NPOs have not moved towards social entrepreneurial endeavors?
Purpose of Study
The purpose of the study is to understand the impact of organizational and individual
characteristics towards entrepreneurial behaviors in a non-profit setting. The objectives of a
company is set with the help of the core values and principles which are brought by the
entrepreneurs, therefore in a non-profit organisation there are certain characteristics traits of the

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ORGANIZATION’S ENTREPRENEURSHIP 3
entrepreneur that drives the objectives of the company as well as motivates others to be
associated with the cause without having a financial motive.
With the help of the theory of planned behavior (TPB) characteristics that exist in the
executive leadership teams of NPOs will be explored. The organizational attributes of
entrepreneurial NPOs that affect the intention to be entrepreneurial will also be reviewed and
analyzed in the research. Understanding which set of characteristics has more significant impact
on the entrepreneurial plan of the NPO will help future leadership teams focus their training in
these areas. Thus this analysis will provide the most beneficial long-term sustainability of the
organization. Another recently coined term intrapreneurship will be analyzed in the research. The
concept explains the attributes of an employee which is similar to that of an entrepreneur
(Antoncic and Hisrich, 2003).
Research Question 1:
What are the individual characteristics of the executives of non-profit organizations have? What
are the impacts of the characteristic traits on the entrepreneurial intention of their NPOs?
H1a - The NPO executive’s attitude towards intrapreneurship will have a positive impact
on the entrepreneurial intention of the organization.
H1b. The NPO executive’s subjective norms about intrapreneurship will have a negative
impact on the entrepreneurial intention of the organization
H1c. The NPO executive’s perceived behavior control about intrapreneurship will have a
positive effect on the entrepreneurial purpose of the organization.
H1d. NPO executive’s self-efficacy will have a positive impact on the entrepreneurial
intention of the organization.

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The literature indicates additional variables that can have an impact on intentions. The
variables include demographics such as age (Kautonen et al., 2010) a person who is young may
have a fresh approach towards the objective of an organisation or an experienced person also
may have a fresh approach depending on the type of experience they have over the years, and
family business (Van Auken, Fry, & Stephens, 2006) if the organisation is a family business then
the attitude of the entrepreneur. These variables will be accounted for in the research design.
Research Question 2:
Which of the following collective characteristics of an NPO has an impact on the
entrepreneurial intention of that NPO: active board of directors, management/community support
or collective efficacy of the nonprofit organization?
H2a. An active NPO board of directors will have a positive impact on the entrepreneurial
intention of the organization.
H3b. Management/Community support of intrapreneurship within an NPO will have a
positive impact on the entrepreneurial intention of the organization.
H3c. Collective efficacy of an NPO will have a positive impact on the entrepreneurial
intention of the organization.
Importance of the Study
There are several organisations who work for the profit gaining objectives and in the
process they impact the society and the environment negatively. There are several approaches
taken to oblige corporate with the responsibilities they have towards these elements. However,

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there are several organisations that are developed with the motivation of improving societal or
environmental issues. This study will indicate the traits that are present in individuals that
motivate them to build an organisation that runs on non-profit objectives. This will also helps in
determining the characteristics and differentiate in the ways of a profit oriented leader with a
non-profit objective entrepreneur. These traits can be developed as skills among the leaders to
ensure a more humane approach towards business.
Definition of Terms
Defining essential terms in this study is necessary for setting a foundation of universal
understanding.
Intrapreneurial Intention refers to those who contribute to corporate entrepreneurship at
the firm level (Lumpkin & Dess, 1996; Morris & Kuratko, 2002; Davidsson, 2006).
A nonprofit organization(NPO)refers to those organizations that have been granted
501(c)(3) status by the United States Internal Revenue Service and are generally considered by
charter to be a charitable organization (Stoudt, 2012).
Entrepreneur is a person who undertakes venture (Herrington et al., 2010),
Entrepreneurship is described by Timmons (1997), as a thought process, interpretation and
performing activities that is based on opportunities it is balanced leadership.
Intention is the emotion of motivation towards an aim or goal (Ajzenl, 1985).
Attitude is the way of thinking and developing perspective about various aspects in life.
Attitude can be positive or negative depending upon the actions that are undertaken (Ajzenl,
1985).

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Personality Traits these are the aspects the behavioral pattern of an individual that build
the character of the person.
Motivation is the feeling that helps drive towards a certain behavior of an individual.
Literature Review
Overview
The purpose of this section is to provide a comprehensive review of the literature on the
antecedents of organisational and personal characteristic traits on NOPs entrepreneurship. To
start, we must first understand what we mean when we say intrapreneurial intention. Antoncic &
Hisrich define intrapreneurship as entrepreneurship within an existing organization (2003). This
has also been referred to as corporate entrepreneurship. Lashmar defines entrepreneurism as, “a
state of mind, a way of looking out at the world and constantly watching for opportunities. You
attune your mind, so you look at every situation and evaluate for its business potential. You look
for opportunities” (2013, para. 1). Another researcher, Djordjevic, describes the effects of this
way of thinking by saying, “Entrepreneurship is the economic engine driving many nations’
economies…Research conducted has shown…100 percent of the new jobs in the United States
were created by entrepreneurial firms of less than two years’ age” (2013, p. 401).I will provide a
thorough review of the antecedents to the intrapreneurial intent oforganizational leaders and the
precursors of entrepreneurial corporateintention.
Research shows that entrepreneurism is essential to the sustainability of all three sectors
of business: for-profit, nonprofit and public. The research also shows the effectiveness of
entrepreneurship training programs geared towards college students and small and medium
business enterprises (SMEs). What the research is inconclusive about is the effectiveness of

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entrepreneurship training programs in developing entrepreneurial mindset or orientation for
nonprofit leaders which, if similar to the outcomes for SMEs, could have a positive long-term
effect on organizational performance and sustainability.
There was one main source for this literature review: peer-reviewed journal articles. A
considerable amount of time was spent reading articles written by scholars on this topic. The
following databases were searched: Google Scholar, ProQuest, ProQuest Entrepreneurship,
EbscoHost, and Emerald. By searching keywords: “Entrepreneurship Education,”
“Entrepreneurship Training,” “Intrapreneurship,” Corporate Entrepreneurship,” and “Nonprofit,”
there were quite a few peer-reviewed journal articles on this topic that were found and collected.
However, before the training can be designed, one must find the areas that most need assistance.
Policy makers are continually encouraging social enterprises, initiatives,and innovations
since they provide services that are not offered in the free market while focusing on the creation
of social wealth rather than generating economic benefits. Nonprofit organizations often aim to
develop entrepreneurial initiatives that serve environmental and social missions while reinvesting
a significant amount of their surplus to support their goals. Additionally, these organizations
promote programs that focus on self-sustaining activities including the creation of new revenue
sources and voluntary welfare programs that provide opportunities to obtain financial support for
businesses. The complexity of both environmental and social problems has resulted in an
increasing prominence of nonprofit organizations in the commercial market sector.
Background
The Nonprofit Sector

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According to Hall (1987), The nonprofit sector has been a major part of the American
landscape for over a century. According to, Weerawardena et al. (2010), the purpose has been to
fill the gap left from the private and public sectors using volunteer resources, community
advocates, government and private philanthropic funding. With the reduction of government
funding and corporate philanthropic dollars in recent years, NPOs have struggled to remain
sustainable. Making the NPO self-sustaining is nownew focus (Sontag-Padilla, Staplefoote &
Morganti, 2012). The authors also state that the nonprofit sector (NPS) is developed to serve the
gap between the private sector and the government. The Business sector does not satisfy these
needs because it cannot do it profitably. The government does not satisfy these needs because
there is not enough public support to do so (Sontag-Padilla, Staplefoote & Morganti, 2012). A
nonprofit pursues a mission that is neither financially sustainable using a for-profit business
model, nor for which there is public support sufficient to move a government to action and the
expenditure of taxpayer funds (Weerawardena, McDonald, & Mort, 2010).
The financial challenges facing NPOs has been going on for quite some time. A study
conducted by the Philanthropic Giving Index (PGI) speaks to this issue. “…fundraisers’
assessment of the current giving environment fell to its lowest level since the Center of
Philanthropy began the study in 1998 (Keirouz et al., 1999). ‘The steep decline in confidence in
current fundraising conditions confirms that NPOs are still encountering difficult times and
anticipate that they are facing more ahead’” (Besel, Williams & Klak, 2011, p. 1).
Entrepreneurship Orientation
According to Paton and Macalman (2000), workplaces are challenged with staying
relevant. This causes endless transitions in services offered and goods sold. Effective

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management of those transitions is an important skill currently required by organizations.
Traditional organizations plan growth and change in a very methodical way. Entrepreneurial
organizations embrace more of a “let’s do it and see what happens” strategy as well as a formal
planning process (Burgelman, 1983).
There has been a spotlight in the research on understanding entrepreneurial culture
(Gartner, 1988; Miller, 1983; Wortman, 1987), quantifying cultural aspects (Chadwick, Barnett,
& Dwyer, 2008; Khandwalla, 1977; Knight, 1997), and associating culture to firm performance
(Lumpkin & Dess, 1996; Parnell & Lester, 2007). Entrepreneurship is described as the “creation
of new business, and by new, I mean a business that does not exactly duplicate existing
businesses but has some element of novelty” (Rumelt, 2005, p. 11).
Entrepreneurial orientation (EO) is described by Burgelman as the processes,
practices,and activities that lead to entrepreneurship (1983). EO involves three elements:
proactively going after opportunities, having a high-risk level of tolerance and having a high
concentration of innovation (Lumpkin & Dees, 1996). Research has shown that organizations
that exhibit EO features such as the willingness to participate in high risk activities, and the focus
on innovation tend to have high levels of success (Covin, 1991; Wiklund & Shepard, 2005).
The EO and For-Profit Sector.
In the next two sections, I discuss the three aspects of EO in the context of the for-profit and
nonprofit sectors.
Typically, in the for-profit world, entrepreneurial organizations allow for more flexibility
in the creative process. Supporting the flow of creativity within an organization enables them to
allow for processes that may be temporary and specific to a new product or service. This also

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allows them to collect input from internal sources as well as external sources. They do not rely
solely on upper management or on creative teams to make suggestions. This imbalance produces
a culture that encourages individuals to not only embrace but seize opportunities for growth
(Wheatley, 1999)
For the purpose of this discussion on for-profit organizations, the concept of risk taking is
defined as the extent to which top management is willing to take on business related risks about
financial investment and strategic actions without some modicum of assurance (Covin & Slevin,
1988; Miller, 1983). In doing so, the organization leaders are seeking higher rates of return for
their higher risk investment.
Innovativeness is defined by Lumpkin & Dees (1996) as an organization’s desire to
develop new products, services or technological processes by the discovery of solutions for
problems. It is defined by Covin and Slevin as “extensiveness and frequency of product
innovation and technological leadership to obtain a competitive advantage for the firm” (1988, p.
228). One can extrapolate from these two definitions that innovativeness means a strong
emphasis on research and development of new products or services or processes.
Proactiveness has been defined by Miller’s research as the instigating nature of an
organization as evidenced by its desire to compete aggressively with other organizations (1983).
Venkatraman defines proactiveness as “proclivity to pursue new opportunities by anticipating
and acting on future needs by being the first to market with new products or services” (2008,
para. 14). One can deduce from these two definitions that proactiveness is the willingness to be
forward or out-of-the-box thinking and planning, paired with the desire to implement innovative
activities.

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The EO and the Nonprofit Sector
Due to funding challenges and the desire for long-term sustainability, successful NPOs
are adopting for-profit business models (Farruggia, 2007). The lines between for-profit and
nonprofit business models are beginning to blur. As much as NPOs are driven by economic
endeavors so are for-profit organizations being more driven by social endeavors. NPOs are
incorporating for-profit business strategies into their current missions to help them increase
funding. Some are creating for-profit divisions or subsidiaries to help fund their non-profit
missions.
Focusing on the mission instead of profits by way of the three constructs of
entrepreneurship: risk-taking, innovativeness and proactiveness is not how NPOs have operated.
In figure 1, Morris, Webb,and Franklin (2011) show a conceptualization of how the three EO
concepts are viewed in the nonprofit area.

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Figure 1 – Entrepreneurial Orientation in Nonprofit Organizations (2011)