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Annotated Bibliography:
External Environment

Brooks, Arthur C. "Is there a dark side to government support for nonprofits?" Public Administration Review, Volume 60, p211, American Society for Public Administration, May 2000.
Brooks shows how government social spending may sometimes deter giving to the nonprofit sector by private donors. His studies were rather inconclusive, but the reasoning behind them attempts to show that the relationships between the two forms of giving (from the government and from private donors) can help or hurt an organization depending on each organization's needs. The information could show help an organization understand how it could collect funds from gift matching or matching grants.

Drucker, Peter. Managing the nonprofit organization, New York: Harper Collins, 1990.
Fund development is a very important activity in the non-profit sector. Drucker addresses how important it is to acquaint outside donors with the nature of the organization. The article suggests what to say to people when they are donating to the organization. Also covered is the importance of market research. Research should be used to identify potential donors that will be most likely to support the organization.

Frumkin, Peter. "Philanthropic leverage." Society, Volume 37, p40, Transaction Publishers, September 2000.
Leverage is the key element in today's society (strategically planning and implementing to get the greatest outcome with the smallest "force"). The nonprofit organization needs to understand this from the donor's perspective. If the nonprofit can show a donor that by giving them a dollar, they will help them become self-sustainable (the dollar will help teach them the things they need to sustain self-preservation), then the donor would be more likely to give to that organization as opposed to one that will continue to ask the donor for additional dollars in the future. This idea is as simple as the old saying "If you give a man a fish, you will feed him for a day. If you teach a man to fish, you will feed him for a lifetime." It all comes down to getting the most out of every dollar.

Janowitz, Barbara. "Nonprofits in peril." American Theatre, Volume 13, p58 (2). Theatre Communications Group, February 1996.
The federal government is planning to pass several bills that will ultimately limit the amount of funding that nonprofit organizations can receive. One such bill would be to limit the amount of money a local nonprofit organization can place toward lobbying activities to 5% of all privately generated funds. The introduction to the flat tax by the federal government will be another hindrance on nonprofit organizations. The flat tax would eliminate deductions for all taxpayers, which means that there would be no incentive for people to donate to nonprofit organizations. This article stresses that the government is an important external factor for nonprofits to consider and keep an eye on.

Pine, Carol. "Nonprofits are becoming more "businesslike" every day." Saint Paul Pioneer Press, April 4, 1999.
Most nonprofits do not have endowments and investment portfolios so it is difficult to sustain themselves through financial arrangements other than fees and memberships. The article advocates that a successful nonprofit needs to focus on the community's needs rather than on self-serving decisions. In order to do that, they have to understand the external environment that affects them. They also need to know how changing political or funding circumstances could affect their organization. Also, they should learn how to develop alternative strategic plans.

Rolen, Karen. "Nonprofits face immense challenges, but are armed with formidable capabilities." Birmingham Business Journal, Birmingham: December 10, 1999.
This article from the Birmingham Business Journal examines the nature of nonprofit organizations and some of the problems that they all face when dealing with the environment that surrounds them. After briefly discussing some of the requirements of nonprofit status, Rolen quickly dives into the many issues that nonprofit organizations face. Rolen touches on issues such as the boundaries between nonprofit, government and business sectors; the pressures to perform more like organizations in the for-profit sector; and problems involved with keeping tax exemption status. The article is then concluded with a list of tips that deals with nonprofit organizations, board members, volunteers, and funders in an attempt to help nonprofit organizations deal with the many problems that originate in the external environment.

Salkin, Patricia. "Non-profits must be mindful of legal framework in lobbying." Albany: Capital District Business Review, Albany: November 29, 1999.
If an organization has chosen to have itself classified as a nonprofit organization, it must be careful in the ways it interacts with the business and government sectors. This is because of the restrictions that the government has imposed on nonprofits and the fact that the IRS strictly enforces them. Salkin's article explains some of the choices within the nonprofit category that these organizations can file and then explains how certain nonprofit forms will still allow a the organization to participate in lobbying. Some of the tests that the author describes are called "the substantial part test" and the "expenditure test." If the organization can pass these tests, then there are some forms of lobbying in which they can become involved.

United States. "Hearing on non-profit competition." House of Rep. Committee on Small Business. 100th Cong., 2nd session. Washington 1988.
This article contains many different perspectives on the issue of unfair competition. There are over 900,000 non-profit organizations accounting for about 6% of the gross national product. Many people in the small business community believe that non-profit groups enter commercial activities that are unrelated to their mission. Owners of small businesses argue that the Federal income tax exemption, postal rate subsidies, and other exemptions give non-profits an unfair advantage in areas where small for-profit businesses provide the same service.

Waldbaum, Rodney. "IRS is watching politically active nonprofits." Puget Sound Business Journal Seattle, October 31, 1997.
This article deals with some of the issues that nonprofits should be aware of when they walk the fine line between charitable work and political advocacy. Waldbaum then leads into some helpful guidelines that an organization should follow to protect itself from the IRS if it has crossed the line or believes that it may have.


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