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Article

Unraveling the Links between Organizational Factors and Perceptions of Community Sustainability Performance: An Empirical Investigation of Community-Based Nongovernmental Organizations

1
Department of Political Science, Texas Tech University, Lubbock, TX 79416, USA
2
School for Environment & Sustainability, University of Michigan, Ann Arbor, MI 48109, USA
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(12), 4986; https://doi.org/10.3390/su12124986
Received: 6 May 2020 / Revised: 12 June 2020 / Accepted: 15 June 2020 / Published: 18 June 2020

Abstract

:
Community-based nongovernmental organizations have emerged as leaders in local economic development, with a growing capacity for undertaking community sustainability projects in distressed neighborhoods. Very little is known about what organizational and managerial characteristics contribute to community sustainability performance. This article seeks to address this gap in the literature. Survey data from 134 community action agencies in the U.S. were analyzed to determine which organizational and managerial factors influence the effectiveness of community-based organizations in meeting community sustainability goals. The findings from an ordinary least-square regression model suggest that community engagement, human resource capacity, county/regional government collaboration, government funding, and revenue diversification are important predictors of community sustainability performance.

1. Introduction

Over the past several decades, community-based nongovernmental organizations and nonprofit community-based organizations (CBO) have emerged as leaders in local economic development, with a growing capacity for undertaking community sustainability projects [1,2,3]. The dependence on CBOs to meet community sustainability goals reflects a profound shift away from large bureaucratic government agencies and toward more flexible, less rule-bound organizations [4,5]. CBOs represent an alternative market strategy to assist local municipalities with the provision of public goods and meeting community needs. Despite sporadic and often inadequate financial support, CBOs have assumed responsibility for many aspects of sustainable development, including residential weatherization, energy conservation, transportation, and the provision of housing and shelter to urban and rural communities [6,7,8]. Some of these communities are and have been primarily homes for inner-city African Americans, migrant farmworkers, and undocumented immigrants. A characteristic shared by all these communities has been the lack of government action and investment from outsiders to preserve or build sustainable communities.
To some extent, CBOs have been successful in their pursuit of community sustainability [1,9,10]. Case studies have been conducted to document the role of community-based nonprofits in pursuing sustainability initiatives in localities [3]. Evaluative research seems to suggest that CBOs can promote sustainability efforts in cities and towns, sometimes more effectively than statewide or national groups [11,12]. Yet beyond case and evaluative studies, there is little empirical evidence examining the relationship between various organizational and managerial capacities on community sustainability outcomes. Many studies have examined and expressed the importance of organizational, socioeconomic, and demographic characteristics in influencing local sustainability efforts by local government [13,14,15]; however, few explicitly explore these linkages in the context of CBOs or other nongovernmental organizations.
Despite these limitations, policymakers at the municipal level of government are taking extraordinary steps to work with the nonprofit sector to alter the manner in which decisions are made concerning sustainability practices [3]. These same policymakers are also altering the manner in which decisions are made with respect to how economic development affects their capacity to manage sustainability efforts [15]. There are a multitude of reasons why these shifts in decision-making are occurring, but a primary reason is a heightened awareness among policymakers about the importance of having the support of nonprofit and grassroots organizations in the adoption of sustainability and smart growth policies [3].
Understanding which factors promote community sustainability efforts by CBOs is important for several reasons. First, the number of CBOs operating in the U.S. has grown exponentially, and thus their presence in community sustainability is likely to increase in the future [16]. Second, these organizations are increasingly recognized as legitimate players in community revitalization due to their success in attracting public funds for housing initiatives and other improvements [7,8]. Lastly, policymakers are increasingly open to developing mutually beneficial alliances between government and nonprofits in sustainability and smart growth policy implementation [3].
Drawing upon data collected from a sample of 134 community-based nonprofits in the United States, we attempt to answer the question of why CBOs pursue community sustainability goals at such variable rates. CBOs were selected as the unit of analysis because they are among the most knowledgeable and active participants in community sustainability with regard to environmental, economic, and social objectives [17,18]. Unlike other nonprofits, CBOs are the nation’s largest federally-funded vehicle for addressing causes and conditions of systemic poverty in low-income communities. In this study, community sustainability effectiveness is thought to be related to a range of organizational and managerial factors.
This article is organized in the following manner. First, it presents a conceptual framework that incorporates elements from strategic management theory and environmental sustainability management theory and tests a model in which community sustainability effectiveness is explained by a range of organizational and management factors. The article concludes by discussing how its findings may inform broader scholarly discourse on the role of CBOs in society, and what organizational and management capacities are likely to foster the success of CBOs in their pursuit of sustainability at the local level.

2. Linkages between Organizational Factors and Community Sustainability Performance

The broad concept of sustainability has many connotations for policymakers and practitioners. The World Commission on Environment and Development (WCED) first explicitly defined sustainability as “development that meets the needs of the present generation without compromising the ability of future generations” ([19], p. 43). By considering local economic, environmental, and social characteristics when designing development projects, sustainable communities “redress the often negative or deleterious environmental and social effects of adherence to mainstream approaches to economic development” ([20], p. 580). These dimensions are represented in Figure 1. Although the definition of “sustainable community” varies among nonprofits, government agencies, and policymakers, many of these definitions seem to coalesce around the integration of sustainable technologies, livable communities, carrying capacity, and the expansion of economic opportunity [1,21,22,23].
Researchers have formulated several theories to explain the creation, implementation, and evaluation of community sustainability at the organizational level [24,25]. Such efforts have explored the causal link between environmental legitimacy and external environmental pressures [26]. Other studies have explored how motivation [27] and resource capability [28] contribute to sustainability. For instance, Bansal and Roth’s [27] model of private sector ecological responsiveness suggests that competitiveness, legitimacy, and environmental responsibility are key motivators for inducing corporate ecological responsiveness. These motivators are often influenced by concern for the environment at the individual level, the degree to which organization members value the environment, and the level of interconnectedness between organization members and constituents [27].
While examples of critical factors for the successful implementation of sustainability are chronicled in the business management literature, examples of antecedent conditions in community sustainability by nonprofits are not widely reported. Although operational realities of nonprofit sector agencies differ from those of private organizations, many nonprofit organizational attributes can potentially enhance performance in sustainability efforts. Success is defined in the community sustainability literature as (1) community engagement strategies that include community members in the decision-making process; (2) human resource capacity; (3) collaborative networking; (4) government funding; and (5) capital from a variety of sources. The importance of community engagement strategies in achieving community sustainability performance has been widely recognized [2,29,30,31,32,33]. In fact, Koontz notes, “A key component of sustainability and sustainable development is citizen empowerment in decisions shaping social and environmental conditions.” ([34] p.15). Without real “buy in” from community members, local municipalities and nongovernmental organizations will face difficulty in enacting sustainability initiatives. For example, in 2018, the city of Boston launched a working group made up of residents, experts, community-based organizations, real estate associations, and environmental advocacy groups to increase awareness and understanding of climate impacts in Boston [35]. By taking climate action engagement into Boston’s communities, the city was able to include key stakeholders whose voices were often left out of decision-making processes. The results of these efforts showed that sustainable development goals can be achieved by including and involving community stakeholders to the greatest extent possible.
In nongovernmental organizations, the possession of managerial skills is a critical element of success in sustainable development [21,36,37]. Human resource capacity, including the ability of organizations to attract people trained in sustainability management, is of key importance for organizational vitality and ensuring community sustainability initiatives are adopted [15]. The organizational capacity for managing sustainability requires skilled staff to communicate new policies, understand new technology, analyze financial costs, and manage organizational change [21]. In fact, Daily and Huang suggest that organizations considering sustainability programs should ensure that human resource factors such as training opportunities, reward and incentive programs, and employment empowerment are in place to yield optimal results in the pursuit of sustainability in local cities [36].
Collaborative networking also drives community sustainability performance. Proponents of collaborative environmental management argue that it is effective in resolving conflict and generating a more comprehensive understanding of policy intricacies [33,34,38], that collaboration results in decisions that improve environmental protection [39], that collaboration can help practitioners identify factors that facilitate collaborative solutions to environmental issues [40], and that collaboration for sustainability can lead to effective and equitable policy solutions while increasing citizen and stakeholder engagement [33].
Government funding is important to the development of local sustainability initiatives in American cities. Prior work suggests that public funding can shape the identity and goals of community-based sustainability projects [34,41]. Mackres and Hayes suggest that public funding often provides more flexibility than private funding sources and is a particularly good source for funding entrepreneurial startups working in sustainable development [42]. In this same line of thinking, others argue that government funding is critical to advancing research for the development of new sustainability technologies and helping to modernize the economy’s technological base [21].
Organizations that derive capital from a variety of sources are better positioned to meet the demands of community sustainability. Sustainable program funding mechanisms ensure that organizations implementing sustainability policy are maintained and continue to supplement or enhance local government local sustainable development efforts [21]. Capital raised from a variety of sources provides an opportunity for organizations to develop capacity and fill essential gaps in the sustainability marketplace. Such sustained efforts can reduce, and possibly prevent, barriers to sustainable development [15].
Despite the increasing importance of sustainability in the public and nonprofit management literature [3,15], current management theories have not accounted for how organizational factors enhance community sustainability outcomes [25,43]. In fact, most managerial theories omit the importance of individual, organizational, and societal issues [44] and do not consider the interdependence of organization and ecosystem [45,46] or how environmental actions influence nonprofit performance [3]. The conceptual model proposed here attempts to address the theoretical and empirical limitations of past studies by identifying specific organizational and managerial resources that enable CBOs to carry out their community sustainability goals. Unlike past studies, our focus is on the ways that organizational structure and behavior promote community sustainability outcomes and provides an organizational level perspective that assumes CBO success in community sustainability is shaped by a wide array of organizational factors. This model utilizes a perceptual measure based on self-reports gathered through a survey of CBO managers to explain how organization-level factors influence community sustainability outcomes.

3. Literature Review and Hypothesis Development

This article adopts a strategic management perspective, which links management practice with its impact on the external environment. The essence of successful strategic management is contingent on appropriate interpretation of environmental conditions and designing the organization’s systems to foster success [47,48]. According to strategic management scholars, the ability of organizations to develop coherent approaches that integrate aspects of program management, financial capacity, and human resources is more likely to achieve organizational objectives [49]. Using this overarching perspective, we test five explanations for why some CBOs invest organizational and managerial resources to promote community sustainability goals: Community engagement strategy, human resource capacity, collaborative networking, degree of dependence on government funding, and revenue diversification.

3.1. Community Engagement

Community participation enhances CBO performance and accountability. Nonprofit organizations that integrate broad-based participation strategies and coalition building in their urban development efforts tend to be more effective [1]. For example, Mayer [22] concluded that promotion of direct resident participation in revitalization project planning and implementation increases CBO effectiveness in achieving neighborhood stabilization. Peterman [50] asserts that local officials are responsible for ensuring neighborhood residents’ voices are included in local development plans. Similarly, Hardina [51] suggests that CBOs should commit to participatory techniques to achieve political power because this increases organizational legitimacy and access to community and stakeholder resources.
Community engagement strategies can improve public sector sustainability efforts in several ways. Portney and Berry’s [2] multivariate analysis of political and civic participation in sustainable cities revealed higher levels of civic engagement in cities pursuing sustainability goals. Thus, participatory processes that include city residents, local elected officials, and agency officials may improve local sustainability efforts [20]. The most common community engagement strategies used by cities are information provision activities and citizen boards [15]. Moreover, organizations that link citizens to government institutions and adopt practices to include community members in the decision-making process may improve their organizational capacity to deliver program and services regarding community sustainability initiatives. Therefore, we test the following hypothesis:
Hypothesis 1 (H1).
Community engagement strategies that include community members in the decision-making process will be positively associated with managerial perceptions of effectiveness in creating sustainable communities.

3.2. Human Resource Capacity

Achieving community sustainability requires an organizational supply of skills to understand new technology, evaluate and apply public policy, and support a stable organization [20,21]. Nonprofit organizations can acquire these skills by drawing on the knowledge of experts and through recruitment and training of new people. For CBOs, human resource capacity mostly centers on whether those that carry out the work of the organization have the required training and ability to meet community sustainability goals [22]. Managers with greater levels of educational attainment and access to training may be better positioned to create direct connections between sustainability initiatives and the prescribed actions necessary to meet the organization’s goals [15,20]. Nonprofit leaders with such skill sets can lead the discussions about community sustainability and accurately report on organizational success in sustainability efforts. On the other hand, nonprofits struggle to gain access to outside consultants and staff training [22,52]. Moreover, the focus on recruiting individuals with adequate expertise and distributing organizational resources for training may take away from meeting certain goals and achieving the organization’s mission [53].
Organizational capacity is positively correlated with the ability of an organization to contribute to community sustainability. Wang et al. [15] found that organizational strategies that obtain technical expertise from experts and public managers are significantly associated with organizational capacity in sustainability. In addition, managerial capacity is an important element in cities seeking to be more sustainable [15]. Thus, public managers play an important role in resource and expertise acquisition when implementing community sustainability strategies. Likewise, the skills of line managers are also important predictors of the success of sustainability initiatives [54]. Therefore, we test these arguments empirically using the following hypothesis:
Hypothesis 2 (H2).
Human resource capacity will be positively associated with managerial perceptions of effectiveness in creating sustainable communities.

3.3. Collaborative Networking

Nonprofit organizations often work most effectively by developing cross-sector alliances with others to bring influential decision makers and other key stakeholders to the community sustainability process [1,55]. Several scholars have studied what motivates service delivery collaboration, such as inter-sector collaborations to provide affordable housing, create jobs, and invest in infrastructure to support community sustainability efforts [22,34,56,57]. Others have engaged in a much broader effort to adopt various theoretical lenses for understanding drivers of cross-sector collaboration [58,59,60,61]. Resource dependency theory emphasizes how organizations enter interagency collaborations to acquire resources by decreasing resource competition with other entities [56]. The institutionalist perspective suggests that organizations may feel pressure from funders or regulators to enter strategic alliances to increase organizational legitimacy. One study of 20 interagency collaborations found that resource dependence, institutional pressures, and organizational prominence were motivators for interagency collaboration, and organizations enter these partnerships to further enhance their competitive advantage, achieve organizational legitimacy, or reduce environmental dependency [61].
Advocates of collaboration have identified many benefits of public-private partnerships [62]. Among small CBOs, collaboration with public and private entities with even informal organizational structures can lead to increased organizational capacity and highly effective programs [63]. In this same line of thinking, Selden, Sowa, and Sandfort [64] discovered that inter-organizational relationships in early care and education had positive impacts on client and program outcomes. Specifically, the level of intensity for collaboration has a positive and significant effect on school readiness, staff turnover, and worker compensation [64].
Sustainability scholars suggest that collaboration may enhance community sustainability outcomes because it provides a platform for a diverse set of stakeholders to work together and support collective actions to address sustainability concerns [33,34]. Moreover, collaborative environmental management may lead to successful integration of regional and local sustainability policies and greater efficiency in achieving sustainability outcomes that cross geographical and organizational boundaries [33,65]. In one study, Koontz [34] found that local governments with lead roles in farmland preservation task forces generated positive social outcomes and enhanced social capital. Furthermore, Koontz, Steelman, Carmin, Korfmacher, Moseley, and Thomas [66] assert that numerous environmental and social outcomes are linked to the involvement of government actors. For example, their work on the role of government in collaborative environmental management found that federal and state actors made significant contributions in advancing environmental outcomes by helping to provide resources, helping organizations be innovative, providing information, and assisting with the implementation of collaborative plans. In this case, nonprofit managers can leverage collaborative relationships with government actors to enhance organizational legitimacy to meet community sustainability goals. Thus, the following relationships are hypothesized:
Hypothesis 3a (H3a).
Collaborative relationships with regional/county government actors will be positively associated with managerial perceptions of effectiveness in creating sustainable communities.
Hypothesis 3b (H3b).
Collaborative relationships with federal government actors will be positively associated with managerial perceptions of effectiveness in creating sustainable communities.

3.4. Dependence on Government Funds

As the devolution of responsibility for social service delivery has shifted from federal and state governments, community-based nonprofits have taken a leading role in addressing societal issues and filling gaps in government services [67]. Salamon’s partnership theory [68] posits that when nonprofits are unable to provide services on a scale that is adequate enough to address social problems, government responds to this “voluntary failure” by providing additional resources to allow for greater production of welfare services. As such, public funds provide the resources for nonprofit organizations to substantially expand their operations and achieve greater levels of organizational effectiveness [69]. This position is supported by recent work on sustainability management, which finds that reliance on public contributions may have a significant influence on sustainable development outcomes. Cohen [21] argues that “some of the investment in sustainable cities will need to come from public sources or at least be driven by public incentives” (p. 129). This view is also supported by recent data on U.S. sustainability implementation revealing that more than 70% of cities seeking to be more sustainable rely heavily on government grants to finance their sustainability activities [15]. Likewise, Koontz [34] found that government institutions use funding, technical expertise, and human capital as resources for influencing collaborative environmental processes to improve environmental and social outcomes.
By comparison, the strategic management literature garners the most empirical support to understand how public funding may help nonprofits build capacity and carry out their mission [52,70]. Governmental resources can contribute to organizational growth and decline [71]. Moreover, some scholars suggest that government funding may improve CBO effectiveness by providing access to elected officials and the political process [22]. Similarly, tightening links with public and private donors may attract additional support for sustainability projects [21]. Therefore, dependence on government funding was expected to be positively associated with perceived CBO effectiveness in community sustainability.
Although government funding can produce positive outcomes, it can have negative effects as well [69,72]. Dependence on government contracts and grants can lead to goal displacement if organizational activities and goals are modified to meet funding requirements [73,74]. The most pronounced effects of government funding entail bureaucratization, mission drift, and loss of democratic responsiveness [5]. Salamon [75] warns against relying solely on government funding for carrying out agency mission because:
“Involvement often creates a tension for nonprofit agencies between their service role and their advocacy role, between their role as deliverers of government-funded services and their role as critics of government and private policies. Such involvement can also put a strain on other importance features of the organizations, such as their reliance on volunteers, their sense of independence.”
([75] p. 44)
In light of reasonable arguments for both a positive and negative effect of government funding on community sustainability performance, we propose a nondirectional hypothesis:
Hypothesis 4 (H4).
Dependence on government funding will be associated with managerial perceptions of effectiveness in creating sustainable communities.

3.5. Revenue Diversification

Organizations with a greater number of revenue sources may be more effective in their community sustainability efforts. In fact, Cohen [21] argues that “investment in the transformation of our cities into environmentally sustainable communities will require capital from a variety of sources” (p. 128). Recent evidence has shown that revenue diversification is an effective strategy in reducing volatility and increasing an organization’s chances at survival [76,77]. As a result, studies on the financial vulnerability of nonprofits [78,79] consider revenue diversification as a key indicator of financial health and of an organization’s ability to withstand financial shocks. Revenue diversification allows organizations to reduce resource dependence, maintain their autonomy, and exercise greater control over their financial stability [69]. We may expect the same relationship about community sustainability performance and revenue diversification to exist in community-based organizations. Therefore, we hypothesize the following relationship:
Hypothesis 5 (H5).
Revenue diversification will be positively associated with managerial perceptions of effectiveness in creating sustainable communities.

4. Methodology

This article tests the relationship between organizational and managerial capacities and reported managerial perceptions of community sustainability effectiveness using online survey data obtained from the 2015 Sustainable Communities Survey that was distributed to the population of community action agencies across the United States. The sampling frame represents a list of CBOs for the fiscal year 2015 obtained from the Community Action Partnership national association, a membership organization that provides technical assistance and other resources to CBOs funded by the Community Services Block Grant (CSBG). The responding organizations were drawn from various cities across the United States. However, a disproportionate number were located in cities of the West, East, and Midwest regions. This did not appear to be a sampling bias because many of the CBOs on the list were located in this area. Furthermore, previous studies noted that well-established CBOs are located in these metropolitan areas [8].
Data were collected via a nine-part web-based survey using Qualtrics software and designed in accordance with Dillman’s Tailored Design Method [80]. The survey included a questionnaire with well-designed content and formatted in accordance with the latest advances in cognitive research. We pre-tested the survey with a group of experts and community based nonprofit organization representatives to ensure that survey questions are properly adapted for the community development audience. Initial emails with survey links were sent out in January 2015 to executive directors or chief executive officers. Survey recipients were encouraged to complete the online questionnaire and were sent additional follow-up reminder emails to encourage participation. Of the 726 survey links emailed, 134 were returned completed, resulting in a response rate of 19%. The detailed description of organizations participating in the survey is included in Table 1.

4.1. Measuring Dependent and Independent Variables

4.1.1. Dependent Variable

Methodologically, it is challenging to ascertain to what extent individual organizations have had an impact on community sustainability outcomes in local communities. To design and recommend policies to achieve community change can be difficult, especially considering that there is a lack of consensus among scholars on how to assess the effectiveness of CBO programs designed to improve environmental, economic, and social outcomes for people living in low income communities [15]. The difficulty in developing an accurate unitary or objective measure of the outcomes of specific sustainable development initiatives and projects has led to the adoption of several measurement strategies [81]. In testing these relationships, we use a perceptual measure to assess community sustainability effectiveness in order to tap into whether nonprofit managers believe their organization is successful in meeting community sustainability goals. We asked managers to rank on a scale of 1 to 10 “the overall effectiveness of your organization at creating sustainable communities”, with “1” meaning least effective and “10” meaning most effective. Figure 2 reports the distribution of the dependent variable.
Research suggests that self-reported data by organizational members introduce limitations through increased measurement error and bias [82]. At the same time, using perceptual data to measure the effects of organizational and managerial capacities on organizational goals is not unusual in the literature [83,84,85,86,87,88,89]. Moreover, Pandey, Coursey, and Moynihan [90] argue that all measures are based on perceptions, and perceptual measures may have advantages over other types of measures because they are based on the judgments of individuals that know the organization best. Mitchell [88], likewise, argues that managers often have a clear understanding of the overall objectives, purpose, and mission of the organization and are in the best position to develop measures to assess how the organization is achieving its goals. Based on these assertions, we contend that self-reported data by executive directors and chief executive officers provides a valid and reliable indicator for measuring the variables of interest.

4.1.2. Independent Variables

The main variables of interest are measured using multiple survey items (see Table 1). The variable community engagement reflects a common community engagement strategy used by CBOs. This survey item was based on [51] and was measured using a 5-point Likert Scale. Human resource capacity is guided by the nonprofit capacity building literature, which reflects an executive director’s ability to provide for the development and knowledge of staff skills [91]. This item was measured using a 5-point Likert scale. In regard to collaboration, we include two dummy variables to account for whether a CBO partners with local/regional and federal actors in order to meet community sustainability goals. Dependence on government funding is measured as the percent of total revenue, and revenue diversification is measured using a Herfindahl-Hirschman Index (HHI) to assess the extent to which CBO revenue streams are diversified.

4.1.3. Other Organizational Attributes

The primary focus of this study is on community engagement, professionalization, collaboration, resource dependency, and revenue diversification associated with perceived effectiveness in community sustainability. In addition, the age of the organization, number of full-time employees, percentage of minority population, percentage of vacant housing, and location were also considered. Older CBOs have the experience and in-depth understanding of neighborhood needs, which may enhance their ability to meet community sustainability goals. As CBOs become larger, they become more professionalized and are able to manage a higher level of direct investment to achieve neighborhood stabilization [53,92]. As such, CBOs with higher proportions of full-time staff were expected to report higher levels of perceived community sustainability effectiveness. The variable organizational age was measured by subtracting the year of incorporation from the year of the survey, and organizational size was measured as the number of full-time employees. We also control for the percentage of minority population and the percentage of vacant housing of the city in which the organization is located. Cities with a proportionally large minority population and a large percentage of vacant housing should be active in promoting a wide range of community sustainability initiatives and make a significant effort to address urban decline [93]. Lastly, geographical location, or whether the organization was located in an urban area or not, was included as a control with the assumption that community sustainability strategies are likely to vary across regions. Organizational age was derived from organizational 990 forms available via Guidestar, and demographic variables were obtained from the American Community Survey (ACS). A detailed description of the measurement for all variables used in our analysis is included in Table 2.

4.2. Method of Analysis

Before running multiple regression analysis, we checked for missing values, multicollinearity, and heteroscedasticity. A series of diagnostics checks was performed, including the correlation matrix (Table 3) and the variance inflation factor (VIF) to ensure the model did not violate any of the assumptions of multiple regression. Bivariate correlations and the VIF were examined to detect multicollinearity. The mean VIF was 1.27, government dependence and revenue diversification had the highest VIFs of 1.89 and 1.88, respectively, with none of the other variables exceeding 1.27. To assess heteroscedasticity, we applied the Breusch–Pagan test that verifies the null hypothesis that the error variances are all equal. The results of the diagnostic test indicate no problems with heteroscedasticity at the 0.05 level. However, robust standard errors were reported with the regression coefficients in order to solve potential statistical problems associated with a series of observations across organizations. We then used multiple ordinary least squares (OLS) regression to explain why CBOs pursue community sustainability goals at such variable rates.

5. Findings and Discussion

This research provides evidence that the use of community engagement strategy, human resource capacity, collaborative networking with county/regional governmental actors, government funding, and revenue diversification are important predictors of community sustainability performance. Table 1 provides information on variable measurement, means, standard deviations, and scale ranges, along with scale reliability statistics for multi-item measures. Table 3 shows the results of the regression equation, revealing a chi-square of 5.70 with a p-value of 0.000, indicating that the combination of the eleven regressors significantly predicts the factors that promote community sustainability efforts by CBOs. The adjusted R-squared value is about 0.26. This means that nearly 26% of the variance in the dependent variable is explained by this model.
Consistent with our first hypothesis (H1), community participation in sustainability initiatives plays an important role in the development of sustainable communities. Specifically, the use of community engagement strategies by CBO managers has a positive effect on building sustainable communities (β = 0.478, p < 0.05). This finding suggests that executive directors of organizations see citizens as an integral part of deciding which specific programs and policies should be implemented or modified to achieve community sustainability. The implication from this finding is important for two reasons. First, it continues to expand on the limited research base that has shown the importance of community participation in fostering local sustainable development [2,20,32,94]. Second, it demonstrates the need for additional research studies on why nonprofit organizations such as community-based organizations and other informal civic sector organizations are more likely to achieve community sustainability goals when citizens are actively involved, which would be extremely valuable to promoting citizen engagement in the development of sustainability programs for improving and protecting the quality of the biophysical environment.
One of the most critical needs in community sustainability is for CBOs to build a core of development expertise by dedicating resources to support and retain technical staff for development projects. As predicted in our second hypothesis (H2), higher investments in human resource capacity increase the probability that CBOs will produce better outcomes in their community sustainability efforts (β = 0.634, p < 0.01). This suggests that CBO managers are actively developing their abilities individually and collectively, which is a testament to the importance of paid staff, volunteers, and board members in meeting the challenges of community sustainability.
The results also offer some evidence that collaborative networking is an important predictor of success in community sustainability efforts. For each additional unit of collaboration between CBOs and county/regional government, the CBO acquires greater experience with collaboration processes that help promote local community sustainability (β = 0.995, p < 0.05), providing partial support for our third hypothesis (H3a). One rationale for this finding is that CBO managers find value in county/regional collaboration because it allows for more interaction with local sustainable development experts, better coordination, and control of collaborative work. Additionally, the involvement of county and regional government actors can decrease time needed to accomplish objectives and build community capacity to deal with the demands of sustainable development [33,34]. Although we find support for our proposition that county/regional collaboration increases the success of CBOs in meeting community sustainability outcomes, we do not find support for our hypothesis (H3b) that collaboration between community-based organizations and federal government actors significantly increases their success in community sustainability.
We find evidence that dependence on government funding does matter to community sustainability performance (H4). CBOs that rely on government funding are less likely to achieve significantly higher levels of community sustainability performance in the eyes of their employees (β = −2.703, p < 0.01). This finding is consistent with arguments on the unintended consequences of government funding [73,74], which suggest that reliance on public sector funding may lead to goal displacement and loss of administrative autonomy in nonprofit organizations. The irony is that, as community-based nonprofits are expected to be responsive to community needs and educate their funding sources about community sustainability issues, reliance on public sector funding might undermine their policy advocacy capacities. Findings by other scholars have also demonstrated that public sector funding may restrict nonprofit flexibility [95], contribute to bureaucratization [69], create accountability conflicts [96], and decrease organizational efficiency [97]. The results reported here indicate that reliance on government funding could negatively affect the ability of community-based nonprofits to meet their community sustainability goals and limit their societal and democratic roles.
The fifth hypothesis (H5) suggested that CBOs with more diversified sources of revenue are more likely to meet their community sustainability goals, because diversified income portfolios can decrease financial vulnerability, making a nonprofit’s financial condition more stable over time. Yet, we found just the opposite: revenue diversification has a statistically significant negative effect on community sustainability performance (β = −1.920, p < 0.01).
There are two possible explanations for this finding regarding nonprofit revenue diversification. The first is that CBO managers may be experiencing management fatigue due to an increased workload of managing various funding sources with different characteristics, which would incur high levels of transaction costs and prevent CBOs from efficiently managing fundraising and donor relationships [78,98]. The second is that there are unanticipated problems associated with the effects of “crowding out” [72,99,100]. Put simply, the public’s willingness to support CBO initiatives related to community sustainability may be diminished because they perceive the CBO to be well-funded by government entities. Therefore, this finding can be interpreted from a resource dependence perspective, which suggests that diversification could lead to burdensome complexity and increased administrative and fundraising costs [101]. Specifically, this finding provides support for earlier studies that suggest that diversification as a revenue generation strategy can lead to mission drift and undermine organizational legitimacy [69,102].
Table 4 also shows that only one of the control variables is significantly related to community sustainability performance. CBOs located in cities with a proportionally large minority population are less likely to meet their community sustainability goals. One explanation for why areas with a higher proportion of minority residents achieve community sustainability at lower rates is that this may be a result of discrimination in environmental policymaking and exclusionary practices that prevent minority groups from participating in the decision-making process [103]. Moreover, federal, state, and local practices have contributed to unhealthy living conditions in low income and minority communities, making it difficult for CBOs to engage in the range of community sustainability activities needed by distressed communities [104].

6. Conclusions

6.1. Contributions

The purpose of this study was to empirically assess what organizational and management factors are related to the success of CBOs in creating sustainable communities. Based on data from a survey of 134 community action agencies in the U.S., the regression results demonstrate several organizational factors that can assist CBO managers in achieving sustainable development for communities. In particular, CBOs that utilize community engagement strategies, take time to invest in human resource development, and engage in collaborative networking are more likely to meet the demands of sustainable development. Future studies might examine whether other types of organizational and managerial factors improve community sustainability performance and to what extent.
The findings from this study have important implications for CBO managers. Organizational leaders seeking to advance local sustainable development might consider using community engagement as a tool to foster transformative relationships that will build sustainable communities of opportunity. CBO leaders might especially find it useful to develop participation and engagement processes that utilize local resident knowledge and expertise for solving problems related to sustainable development. Community engagement is foundational to creating sustainable communities. The Economic Opportunity Act of 1964, which created Community Action Agencies, asserted that community action programs be developed, conducted, and administered with the maximum feasible participation of neighborhood residents and other targeted populations [105]. An exemplar of community engagement success is the Building Sustainable Communities Plan in Uniontown, Pennsylvania, by Fayette County Community Action Agency. The initial development of the plan centered engagement of local residents as a key element through a grass-roots planning process. Through a series of community planning meetings, five objectives for greater health and sustainability were created: (1) developing, preserving, and investing in the physical environment; (2) increasing family income and wealth; (3) stimulating and connecting economic activity locally and regionally; (4) improving access to quality education; and (5) fostering livable, safe, and healthy environments and lifestyles. The plan also established steps and procedures for future updates to occur only through a resident-engaged planning process. Recent plan accomplishments included constructing 30 energy efficient single-family homes, creating 50 jobs through a small business incubator for growth industries identified by the community, and serving residents at new Silver LEED-Certified, solar-powered agency headquarters [106].
Our study also suggests that successful sustainable development will require CBOs to build a core of development expertise by dedicating resources to support and retain technical staff for development projects. When nonprofits make significant investments in human capital development, the organization is better positioned to meet its goals and build the capacity of its employees. The importance of human capital investment to an agency’s sustainable development effectiveness is highly recognized by CBO funders. For instance, the performance management framework for the CSBG requires reporting on the number of staff holding special technical expertise or certifications that increase agency capacity to achieve family and community outcomes in social, economic, and environmental sustainability related areas, such as, family and child development, energy efficiency, and housing quality. As a result, the Community Action Partnership offers a variety of tailored trainings and technical assistance to CBOs in the network, including management operations and innovative practices.
Our results also indicate that CBOs’ community sustainability agendas will benefit from joining forces with local and regional government actors in their areas. CBOs can collaborate with local governmental actors by pooling together resources and sharing the results of their efforts in responding to community sustainability related issues. By working together in the pursuit of local sustainability, CBOs are able to enhance organizational efficiency, increase organizational effectiveness, and drive broader social change. The Community Action Partnership published a booklet profiling the range and diversity of over 50 economic and housing development projects implemented by CBOs, which all involved some level of local collaboration to increase organizational efficiency and effectiveness [107]. One example is the Three Rivers Community Action, which since the 1990s, in collaboration with the local community, private partners, and local government, has raised over $94 million for sustainable housing, built 646 units, provided down payment assistance to 205 households to attain homeownership, and offered housing and financial counseling to thousands of residents. Their collaborative efforts facilitated weaving through complex project financing mechanisms and assembling multiple sources of funding to achieve their housing sustainability goals. In fact, the Community Action Partnership reports that for every $1 of CSBG funds, Community Action Agencies leverage $7.70 from state, local, and private sources [108].

6.2. Limitations and Suggestions for Future Research

While our study has shed some new light on factors that contribute to community sustainability performance, it is important to consider the methodological limitations of this study. First, the study relies on cross-sectional data obtained once from executive directors of multiple community-based organizations and therefore, is limited to describing associations between variables. It is important to note that no statements about the directions of the relationships can be made because this study is an exploratory analysis that evaluates the association between a range of organizational level factors and managerial perceptions of community sustainability performance in the nonprofit voluntary sector. Performing longitudinal studies or testing these relationships in other types of nongovernmental organizations that engage in sustainability related activities can strengthen our findings. Second, this study relies on perceptual data collected through self-reported questionnaires, which may imply common method bias, as it is interested in understanding managerial perceptions of the organizational factors that affect community sustainability performance. While perceptual data provide a wide-ranging perspective on whether or not structures and processes are believed to work within the organization, it only captures one dimension of community sustainability performance. Future studies linking organizational and managerial factors to community sustainability performance could improve upon a measure of community sustainability by developing indicators or evaluation criteria that will allow the broadest possible coverage of components that comprise local sustainable development [109]. Third, the organizational and managerial attributes identified in this analysis do not constitute a complete list of variables that may impact community sustainability performance; however, they were chosen for inclusion in this study because they represent some of the most common variables found in previous studies. Despite these limitations, this analysis revealed how strategic management factors and other organizational attributes enhance CBO effectiveness in community sustainability. These results contribute novel findings to the sustainability management literature by providing an alternative explanation to traditional management theories that disregard how organizations’ practices advance sustainability. To satisfy the demand for public goods in lieu of government provision, nonprofit organizations must understand how to meet community sustainability goals.
Moreover, the methodological approach taken in this study has exportability to contexts beyond the United States. Nongovernmental organizations and CBOs, both large and small, are major contributors to sustainable development efforts in countries around the world, infusing billions of dollars annually into local CBOs and communities. This is particularly important as we seek to address global challenges at the local scale through the United Nations’ 17 Sustainable Development Goals (SDGs). The survey and analysis methods employed here can be tailored to evaluate the effectiveness of CBOs in achieving one or more of the SDGs both within and across countries. Exploring the relationship between community engagement, human capital investment, and collaboration with perceptions of sustainable development effectiveness in other countries may provide insights into areas for increased attention by CBO managers and funders. There may also be other important organizational and managerial factors, while not explored or significant in our analysis, that help explain community sustainability performance in other countries.
In conclusion, community-based organizations provide support to distressed communities by supporting neighborhood revitalization projects and encouraging local residents to be engaged in sustainable development. This study examined the organizational and managerial capacities that influence their success in meeting community sustainability goals, as perceived by their executive directors. The use of community engagement strategy, human resource capacity, collaborative networking with county/regional governmental actors, government funding, and revenue diversification are all important predictors of community sustainability performance. Nonprofit and public managers may benefit from these findings by encouraging these activities in achieving the goals of sustainable development strategies.

Author Contributions

Conceptualization, N.S.W.; methodology, N.S.W.; software, N.S.W.; resources, N.S.W.; writing—original draft preparation, N.S.W. and T.G.R.; writing—review and editing, N.S.W. and T.G.R.; project administration, N.S.W. and T.G.R. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding.

Conflicts of Interest

The authors declare no conflict of interest.

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Figure 1. Dimensions of sustainable development.
Figure 1. Dimensions of sustainable development.
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Figure 2. Distribution of community sustainability effectiveness.
Figure 2. Distribution of community sustainability effectiveness.
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Table 1. Description of Organizations Participating in the Survey.
Table 1. Description of Organizations Participating in the Survey.
Organizational Age (years)30 and less—6% of organizations
30–45—16% of organizations
36–50—68% of organizations
51 and more—10% of organizations
Organizational Budget$1,000,000 or less—4% of organizations
$1,000,001–$2,499,999—4% of organizations
$2,500,000–$9,999, 999—40% of organizations
$10,000,000 or more—52% of organizations
Organizational LocationNortheastern United States—15% of organizations
Western United States—15% of organizations
Southern United States—38% of organizations
Midwestern United States—32% of organizations
Table 2. Descriptive Statistics and Variable Measures.
Table 2. Descriptive Statistics and Variable Measures.
VariableVariable MeasurementMeanStd. Dev.MinMax
Community Sustainability PerformancePlease rank the overall effectiveness of your organization in creating sustainable communities. Item scaled 1–10, with 1 = least effective, 10 = most effective. 6.221.80110
Community EngagementCommunity needs and resources are fully integrated with the organization’s decision-making process. Item scaled 1–5, with 1 = strongly disagree, 5 = strongly agree.4.220.7125
Human Resource CapacityStaff skills are matched and up-to-date to ensure that projects can be delivered effectively. Item scaled 1–5, with 1 = strongly disagree, 5 = strongly agree.4.080.6425
Federal Government CollaborationOrganization collaborates with local government in its sustainable community endeavors. Measured as 1 = organization collaborates with local government, 0 = organization does not. 0.750.3201
County/Regional Government CollaborationOrganization collaborates with county/regional government in its sustainable community endeavors. Measured as 1 = organization collaborates with county/regional government, 0 = organization does not.0.900.3001
Government Resource DependencePercent of the organization’s budget that comes from government.0.810.2001
Funding Diversity R D = 1 i = 4 4 R i 2 0.75
Source: [94]
0.280.2301
AgeAge of organization in years.46.609.80394
Full Time EmployeesNumber of full-time paid staff.128.26134.630735
Minority PopulationPercent of nonwhite population.0.402.50029
Vacant HousingLogarithm of vacant housing.8.811.376.1712.81
UrbanOrganization is located in an urban area. Measured
as 1 = organization is located in an urban area,
0 = organization is not located in an urban area.
0.220.4101
Table 3. Correlation coefficients of main variables.
Table 3. Correlation coefficients of main variables.
123456789101112
1. Community Sustainability Performance 1.00
2. Community Engagement 0.281.00
3. Human Resource Capacity0.330.311.00
4. County/Regional Government Collaboration0.180.000.001.00
5. Federal Government Collaboration0.180.110.100.341.00
6. Government Resource Dependence−0.20-0.13-0.120.09−0.081.00
7. Funding Diversity −0.010.070.010.040.17−0.611.00
8. Age of Organization−0.010.000.07−0.080.180.01−0.051.00
9. Full Time Employees0.010.090.110.060.14−0.010.050.211.00
10. Minority Population −0.05−0.03−0.020.040.040.06−0.060.020.101.00
11. Vacant Housing0.12−0.070.010.11−0.03−0.100.110.00−0.060.161.00
12. Urban −0.06−0.04−0.07−0.01−0.04−0.130.02−0.120.00−0.040.131.00
Table 4. Ordinary least squares (OLS) regression results.
Table 4. Ordinary least squares (OLS) regression results.
Community Sustainability Performance
CoefficientRobust SEp-Value
Community Engagement0.4780.2260.036 **
Human Resource Capacity0.6340.2270.006 ***
County/Regional Government Collaboration0.9950.3900.012 **
Federal Government Collaboration0.4520.4180.281
Government Resource Dependence−2.7030.7250.000 ***
Funding Diversity −1.9200.7280.009 ***
Age of Organization−0.0080.0160.587
Full Time Employees−0.0000.0010.765
Minority Population−0.0470.0200.021 **
Vacant Housing0.1750.1060.101
Urban−0.4080.2730.137
Constant2.0951.8230.253
Observations 134
Prob > F 0.00 ***
R2 0.26
Note: Robust standard errors are used; ** p < 0.05; *** p < 0.01

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Wright, N.S.; Reames, T.G. Unraveling the Links between Organizational Factors and Perceptions of Community Sustainability Performance: An Empirical Investigation of Community-Based Nongovernmental Organizations. Sustainability 2020, 12, 4986. https://doi.org/10.3390/su12124986

AMA Style

Wright NS, Reames TG. Unraveling the Links between Organizational Factors and Perceptions of Community Sustainability Performance: An Empirical Investigation of Community-Based Nongovernmental Organizations. Sustainability. 2020; 12(12):4986. https://doi.org/10.3390/su12124986

Chicago/Turabian Style

Wright, Nathaniel S., and Tony G. Reames. 2020. "Unraveling the Links between Organizational Factors and Perceptions of Community Sustainability Performance: An Empirical Investigation of Community-Based Nongovernmental Organizations" Sustainability 12, no. 12: 4986. https://doi.org/10.3390/su12124986

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