The Many Indicators of Nonprofit Success as Seen by Nonprofit Leaders

ABSTRACT

Nonprofit organizations are increasingly compelled to demonstrate their success to stakeholders, drawing scholarly interest toward systematizing indicators of their success. But what best indicates success is in the eye of the beholder, as success is socially constructed. This paper examines the multifaceted success indicators used by nonprofit leaders in practice and explores how they align with scholarly conceptions of nonprofit success. We develop a framework of nonprofit success from the perspective of nonprofit leaders that is more comprehensive and generalizable than previous ones by analyzing responses from leaders of 861 randomly sampled nonprofit organizations in three metropolitan regions representing different institutional contexts—Vienna (Austria), Shenzhen (China), and San Francisco (USA). Despite contextual differences, leaders' understandings have much in common across settings. The indicators overlap with existing scholarly understandings of nonprofit performance and effectiveness, focusing on internal actions and external stakeholder relationships. However, our findings also uncover two practically relevant groups of indicators that are under‐appreciated in scholarly discourse: relationships within the organization (cohesiveness and social inclusion), and the uptake behavior of external stakeholders (engagement with the organization's offerings). Our findings categorize these indicators in terms of whether they manifest inside or outside the organization and whether they emphasize actions or relationships. The two‐dimensional framework thereby maps common ground among nonprofit leaders across diverse national and organizational contexts, noting how the priority of success aspects varies. Our comparative data underscore the wide‐ranging applicability of the proposed framework, illuminating new directions for research on nonprofit success.