MGMT 602 Week 2 DB Forum 1 Replies Example

Discussion Board Forum 1: Replies

MGMT 602 Non-Profit Management, Discussion Board Forum 1: Replies (two)

Thread by [Student Name]

The two classmates and their threads are composites standing in for the forum's own posts; the articles, Worth's textbook and Scripture are real; the requirements follow Liberty's public course guide for MGMT 602.

Reply to Priya

Priya, your thread about the nonprofit hospital system in Houston was well researched, and the details about chief executive pay and lawsuits against patients for unpaid bills were troubling. You concluded that the system behaves exactly like its for-profit competitors and that this disproves Hansmann.

I think Hansmann (1980) partly anticipated your case. He separated donative nonprofits, which depend on gifts, from commercial nonprofits, which sell services, and he expected contract failure to be weaker for the second group, since paying customers can judge some of what they buy. A hospital system that earns most of its revenue from insurers and patients is a commercial nonprofit in his terms, so the theory predicts that the nonprofit form will constrain it less than it would constrain a charity funded by donors. Your example may show the theory's limits more than its failure.

There is also a public side to this. Worth (2017) notes that nonprofits answer to the public as well as to their boards. Writing about the collection for Jerusalem, Paul said he took care that his handling of the money would stand up to human scrutiny and not only to God's (English Standard Version Bible, 2001/2016, 2 Corinthians 8:21). A nonprofit hospital that sues its poorest patients may be legal, but it spends the public trust its tax exemption depends on.

Does the system's community benefit report show charity care in line with its tax exemption?

Reply to Caleb

Caleb, your thread applied Weisbrod's government failure theory to the food pantry in Magoffin County, Kentucky, and it fit well: the pantry fills gaps that federal food assistance leaves, especially in the last week of the month. You noted, though, that more than half of the pantry's food comes from a federal commodity program through the regional food bank, and you were not sure how that fit the theory.

Salamon (1987) offers an answer. He argued that voluntary action has failures of its own, which he called voluntary failure: philanthropy rarely raises enough money, it tends to serve particular groups, donors can impose their own preferences, and much of the work relies on volunteers without professional training. Government compensates for these weaknesses with funding, while nonprofits compensate for government's distance from local needs. In his view the two are partners rather than substitutes. Your pantry shows exactly that partnership: federal commodities provide volume, and the volunteers provide local knowledge about which families are struggling. Worth (2017) describes the same interdependence across the sector, in which many nonprofits deliver services that government pays for, and Salamon's theory explains why that arrangement reflects each partner's strengths rather than either one's weakness.

This also means the pantry is exposed when federal programs change. Has the pantry's board discussed what it would do if the commodity allocation were cut?

References

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Hansmann, H. B. (1980). The role of nonprofit enterprise. The Yale Law Journal, 89(5), 835-901. https://doi.org/10.2307/796089

Salamon, L. M. (1987). Of market failure, voluntary failure, and third-party government: Toward a theory of government-nonprofit relations in the modern welfare state. Journal of Voluntary Action Research, 16(1-2), 29-49. https://doi.org/10.1177/089976408701600104

Worth, M. J. (2017). Nonprofit management: Principles and practice (4th ed.). SAGE Publications.