THE LINK BETWEEN FINANCIAL MANAGEMENT, ORGANIZATIONAL CAPACITY BUILDING AND EFFECTIVENESS IN NOT-FOR-PROFIT ORGANIZATIONS: AN EXPLORATORY STUDY

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Abstract

The third sector literature argues that organizational capacity is important for Not-For-Profit (NFP) organizations to achieve their missions. Financial management skills are important for the enhancement of effectiveness, accountability and viability of NFP organizations. While effectiveness is a contested concept its attainment is an important aspect of NFP management. This paper examines the relationship between financial management, the development of capacity and the encouragement of effectiveness. A survey of 67 NFP organizations affiliated with the Victorian Council of Social Services (VCOSS) was conducted and the findings establish a link between financial management and organizational capacity.

Keywords: Earnings Informativeness, Split Share Structure, Agency Problems

How to cite this paper: Kluvers, R. (2013). The link between financial management, organizational capacity building and effectiveness in not-for-profit organizations: an exploratory study. Corporate Ownership & Control, 11(1-7), 632-636. http://.dx.doi.org/10.22495/cocv11i1c7art2