Study: Leaders of nonprofits that use sport to better society often lack business skills

Photo of University of Illinois recreation, sport and tourism professor Jon Welty Peachey

While the leaders of nonprofits that use sport for social change are usually passionate about their groups’ missions, many of them lack the entrepreneurial and leadership skills that their organizations need to thrive, according to a recent study led by University of Illinois recreation, sport and tourism professor Jon Welty Peachey.

Photo by Fred Zwicky

CHAMPAIGN, Ill. — While the number of nonprofits promoting sport as a tool for empowerment and social justice has increased significantly over the past two decades, many of these organizations fail – their efforts to change the world stymied by leadership deficits and stakeholder skepticism, a new study suggests.

Although passionate about their organizational mission, the leaders of these nonprofits frequently lack the business acumen and training in nonprofit management that are critical to their organizations’ survival, said University of Illinois recreation, sport and tourism professor Jon Welty Peachey.

“That’s problematic because the long-term sustainability of any nonprofit depends on your ability to manage an organization, to have vision, guide and steer that organization amidst external and internal forces and pressures,” Welty Peachey said. “While entrepreneurship might not be the first characteristic that comes to mind when talking about the nonprofit community, it has become a vital aspect of sustainability.”

He and his co-authors interviewed the managers of 30 nonprofits of varying sizes in locations around the world, discussing the barriers their organizations faced – and the strategies they employed to surmount them – while scaling up their nonprofits.

“We often think of sport for development as happening in Africa and less developed countries, but that’s not necessarily the case because there are well over a thousand of these organizations in Australia, Canada, England, Europe and the U.S., primarily in urban environments, but also some rural areas,” Welty Peachey said.

The groups in the study offered various types of sports programs – including martial arts, running and other activities – to empower youth, women or refugees; promote health, community development or peace; or fight climate change.

While most of the people working for sport-for-development nonprofits such as former athletes and coaches enter the field because they are “very passionate or evangelical” about sport’s capability to promote empowerment and social justice, Welty Peachey said they often have little experience in fundraising or running a company.

As a result, the failure rate among these types of nonprofits is very high, he said.

“What we recommended when they’re thinking about the staff members to bring on board is that they really have to look for people who have business acumen – or provide them with the training in nonprofit management, financial management, leadership and the skillsets that you need to run a nonprofit business,” Welty Peachey said.

The nonprofits in the study also struggled with other human resource problems such as high staff turnover rates and issues with volunteers, the researchers found.

While intense competition for limited financial resources was a hurdle for some interviewees, especially those leading newer organizations, these economic challenges and the necessity of raising funds to support program expansion and operations kindled an entrepreneurial mindset in others.

A number of the interviewees said they responded to their financial constraints by becoming more entrepreneurial, diversifying their funding streams by targeting new markets for participant recruitment such as schools and after-school programs.

Despite these leaders’ beliefs, some prior studies indicated that self-generated revenue streams do not necessarily boost nonprofits’ organizational capacity, the researchers wrote. Thus, these leaders “may be making critical organizational decisions that are not informed by the latest empirical research or well-strategized monitor and evaluation efforts,” according to the study.

All of the participants said financial constraints prompted them to partner with nongovernmental organizations or national or international groups to obtain funding for programming and operations – although these alliances can entail power imbalances and divert nonprofits from their original missions.

Along with financial barriers, overcoming skepticism from public officials, potential donors and other stakeholders about sport’s efficacy at ameliorating societal problems and inequities was another major obstacle for the nonprofit leaders in the study.

“There’s a trajectory now with studies that show sport can be an effective tool in certain contexts,” Welty Peachey said. “It’s a field that’s gaining traction, funding and support, and more governments are embracing the concept.

“Despite the challenges that we found in this study, there’s momentum behind sport for development, but it just requires more thoughtful research and thinking about how to best design, manage and lead these types of programs for optimum effect.”

Co-written by Adam Cohen of the University of Technology-Sydney and Na Ri Shin of Texas Tech University, the study was published recently in the journal Nonprofit and Voluntary Sector Quarterly.

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