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Of all the factors that contribute to organizational performance, the human element is the most fundamental. Managers across the public, private, and nonprofit sectors are increasingly recognizing that employees are their organization's most important assets and that the most significant source of competitive advantage comes from having the best systems in place for attracting, motivating, and managing their organizations human resources.
This essay will speak to the human resource management challenges of nonprofit organizations and the actions required to address these challenges. What human resource management systems need to be in place in the future so that nonprofits can best manage their human capital in order to be self-sustaining and effective? What is the intellectual agenda that will inform predictions about the future in order to bring about this reality? Several scholars have written about the challenges facing the nonprofit sector (e.g., Delaney and Huselid 1996; Frumkin and Andre-Clark 2000; Lynn 2003; Pynes 2009; Wolf 1999). This essay will address how nonprofit organizations can be transformed by tackling these challenges and the accompanying intellectual agenda required to meet these challenges. I will first discuss several human resource areas of particular concern to nonprofits that will shape the future of the nonprofit sector.
Perhaps more than organizations in the private or public sector, nonprofits must address the economic and sustainability challenges that ultimately will change the way they do business in older to ensure their survival. Rapid environmental changes and unpredictable funding patterns have resulted in the demise of many nonprofits (Wolf 1999), and only those nonprofits that possess resources, human capital, market share, and diverse revenue streams will prevail. To compete for these scarce resources, nonprofits will be required to become ever more strategic in the ways they accomplish theit mission. Nonprofits in ¿020 will need to place an even greater emphasis on entrepreneurial ventures and social marketing; rely less on public money and more on collaboration between all three sectors; share responsibilities and funding resources within a new framework of intergovernmental cooperation; and place more responsibility on their boards and other external stakeholders to engage in fund development roles and responsibilities.
Not all nonprofits will survive in this new marketdriven environment. Smaller nonprofits are most likely to engage in mergers and joint ventures with...