Assessing Nonprofit Rule Interpretation and Compliance

Abstract

Nonprofit organizations operate within the confines of formalized agreements structured by parent organizations, funders, and partners. Compliance with the rules comprising these agreements leads to organizational legitimacy and the resulting access to resources. At times, compliance can be challenging because internal and external stakeholders exert pressures on nonprofits that can sometimes dissuade rule adherence. These pressures can be amplified when a nonprofit is an affiliate. Affiliate nonprofits must meet accountability demands of their local constituencies while aligning missions, organizational structures, governance, and programmatic activities with parent organizations that might be geographically distant. Affiliate status thus adds a layer of complication to an already complex environment. We conduct an institutional analysis as a basis for assessing how nonprofit affiliates interpret global rules for maintaining affiliate status and factors most important to them in maintaining continued compliance with such rules. Our research is conducted in the context of United Way (UW) affiliate organizations in Indiana.