RT Vol XV: CH 3: Financial Distress at Nonprofit Organizations
From the Book: The Refractive Thinker® Vol XV: Non Profits: Strategies for Effective Management


The number of nonprofit organizations in financial crises that can lead to insolvency and closure in the United States has increased in the past 3 years. The financial distress consequences are catastrophic because it affects sustainability and may lead to a discontinuity of operations. By implementing effective organizational performance strategies, nonprofit Executive Directors can increase the organization’s competitive edge, improve performance, increase productivity and sustainability. Executive Directors who care about the survival and profitability of their organization must not ignore that without the right strategies in place, gaining a competitive edge to increase performance and productivity is very difficult. In this chapter of the Refractive Thinker, I present an overview of the status of financial stability and organizational performance in the nonprofit organizations. I also shared the finding from ten qualitative interviews I conducted with ten Executive Directors from a nonprofit hospital in Dallas, Texas. The findings from the data analysis revealed that non-profit Executive Directors could improve organizational performance by applying effective leadership, improving organization performance, and promoting continuous learning.