Assessing Nonprofit Capacity for Effectiveness Across Multiple Domains: VCEC Results In One State

Background and Purpose: Over the past two decades considerable discussion has been devoted to the need for nonprofit service organizations to demonstrate capacity for effective performance across multiple domains (Herman & Renz, 1998; Hall et al., 2003; Rehnborg et al., 2011). Instruments have been developed, promoted, and occasionally marketed to nonprofits for self-assessment across such domains, but virtually none has been tested for statistical reliability and validity, and many are not easy to use (Rehnborg et al., 2011). As a group they also give inadequate attention to assessment of nonprofit core capacities in volunteer and community engagement. This oversight is striking. Volunteer engagement and community engagement have long been cited as predictors of nonprofit capacity to build collaborative networks, leverage community resources, achieve program outcomes, and foster public trust (Banaszak-Holl et al., 1998; Faber & Wallerstein, 2002; Poole et al., 2006, 2008). Guided by organizational management and engagement theories, the present study examined the statistical reliability and validity of an instrument we developed called the Volunteer and Community Engagement Capacity (VCEC) tool.

Methods: In Fall 2010, the VCEC instrument was distributed electronically to a purposive sample of 176 nonprofit organizations in a Southwestern state. The instrument consisted of 132 likert-type items designed to assess nonprofit capacity across nine domains: board and advisory leadership, organizational culture, accountability, financial management, staffing and development, marketing and communication, infrastructure, volunteer management, and community collaboration. Demographic information also was collected from participant organizations. Seventy-one percent responded, with 125 nonprofit organizations represented in the sample, and broadly distributed by type and size. STATA was used to conduct internal consistency reliability analysis for each of the nine organizational capacity scales in the instrument as well as standard errors of measurement (SEM). STATA was also used to conduct validity analyses, specifically content validity through median item correlation coefficients, construct validity through intercorrelations of VCEC scale scores, and criterion-related validity through validity correlation tests between VCEC scale scores and CCAT (Core Capacity Assessment Tool) scores, which were available on all participant organizations during the study. M-PLUS was used to conduct confirmatory factor analysis.

Results: Coefficients alphas were at or above .85, indicating high reliability for all nine scales; SEM scores were within acceptable confidence intervals as well. Results from intercorrelation tests provided evidence that the instrument has both construct and criterion-related validity. Tests of model fit through confirmatory factor analysis (CFA) were unsuccessful due to having more parameters than sample size, though the root mean square error of approximation (RMSEA) estimate (.09) indicated a reasonable fit.

Conclusions & Implications: Preliminary findings suggest that the VCEC is a statistically reliable and valid instrument, and relatively easy to use. In half an hour or less, nonprofit managers can use the tool to assess organizational capacity for effective performance across multiple domains, including volunteer and community engagement, and then plan strategically to improve capacity in these areas. Further testing of the instrument with a stratified random sample of nonprofit service organizations across diverse states is recommended.