How NGOs redefine themselves: Transitioning from nonprofit ... · PDF fileHow NGOs redefine themselves: Transitioning from nonprofit to enterprise Solange Hai Daniel Arenas ESADE Business

How NGOs redefine themselves:

Transitioning from nonprofit to enterprise

Solange Hai

Daniel Arenas

ESADE Business School, Ramon Llull University

Abstract

This paper investigates the key role of NGOs in redefining themselves in a

new field. Charity retail organizations collect used clothing and household items

donated from individuals and organizations. Although the activities of clothing

collection, sorting, and resale look similar between organizations, the purpose behind

them can differs. Roba Amiga, a Catalan charity retail organization and work

integration social enterprise (WISE), started in 2002 as a project with participation of

15 institutions. The purpose was two-fold: positive social and environmental impact.

Using Spain as an example, this research project will address how a nonprofit

organization, which primarily relies on donor support, redefines itself as a social

enterprise with earned income revenue. Second-hand work integration organizations

use actions such as framing processes, brokering, and reorganizing activities as a

means towards new allies, new structures, and new ways of working.

Keywords: Nonprofit, field theory, work integration social enterprise

CLADEA 2014 – Paper submission

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How organizations redefine themselves:

Transitioning from nonprofit to enterprise

Introduction With the worldwide recessions over the past decade, nonprofits have been

identified as one of its victims. Increased uncertainty and lack of funding has hit

nonprofits hard (Lowrey, 2013). In the face of this uncertainty organizations may

need to restructure their activities, rethink their approaches, or adjust to current

opportunities. One way organizations have adjusted is by improving efficiencies by

finding market-based solutions and developing earned income revenue streams to

ensure organizational survival in the long term (James, 2010; Murray, 2012).

This proposal examines the key role of nonprofit organizations in redefining

themselves in a new field. Second-hand social and environmental retail organizations

collect used clothing and household items donated from individuals and organizations.

Although the activities of clothing collection, sorting, and resale look similar between

organizations, the purpose behind them can differs. Roba Amiga, a Catalan second-

hand social and environmental retail organization and work integration social

enterprise (WISE), started in 2002 as a project with participation of 15 institutions.

The purpose was two-fold: positive social and environmental impact. The social

impact is ensured through the inclusion of people who are socially excluded or at risk.

The reuse and recycling of goods and clothing further the environmental impact

(Veciana i Botet, 2008). Since 2002, the organization has gone through a series of

changes due in some part to external shocks, such as shifts in donor priorities, and

internal readjustments, such as efforts to scale activities. Using Spain as an example,

this research will address how a nonprofit organization, which primarily relies on

donor support and is volunteer-based, redefines itself as a social enterprise with


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earned income revenue and is professionalized. Second-hand social and

environmental retail organizations use actions such as framing processes, brokering,

and reorganizing activities as a means towards new allies, new structures, and new

ways of working.

The theory of fields has been used to explain how fields, defined as meso-level

social orders, emerge, settle, and transform (Fligstein & McAdam, 2012). This theory,

bringing together institutional theory and social movements theory, looks at the

conditions under which new fields emerge, how they are created, who creates them,

and for what purposes. Resettlement of a field can be seen in nonprofit organizations.

The nonprofit sector has gone through changes over the past years with organizations

redefining themselves as social enterprises with earned income revenue streams in

addition to donor funding. In some cases, the changes in priorities in donor funding

has made nonprofit organizations adapt to new situations that can dramatically change

the way they define themselves and the work that they do (AbouAssi, 2013). This

research aims to look at the following research questions:

(1) What external and internal factors lead to institutional change in the nonprofit

field?

(2) How do actors in the field initiate and sustain the transition?

This study will analyze some of the strategies presented in previous research, with a

focus on tactics such as framing processes, brokering, and reorganizing activities, and,

through and in-depth case study of second-hand work integration organizations,

explain how they are used to transition and resettle the field as a means towards

establishing new allies, new structures, and new ways of working.

This proposal is continues in the next section with a summary of the state of

the art of the theory of fields. Section 3 summarizes the proposed methodology and


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preliminary data sources are presented. In section 5, I conclude with the expected

contribution illustrated through the initial results.

State of the Art and Conceptual Framework In the theory of fields, Fligstein & McAdam (2012) build on previous

theoretical frameworks such as institutional theory and social movements theory to

explain how fields emerge, settle, and transform. This theoretical framework includes

the role of agency, power, and conflict when analyzing the conditions under which

new fields emerge, how they are created, who creates them, and for what purposes.

A field, as defined within the theory, is a meso-level unit of collective action

(Fligstein & McAdam, 2011) and the social structures made up of resources and

meanings in society (Lounsbury et al., 2003). Actors within a field interact with each

other, understand their relative positions of power, and know the “rules” the field

considers legitimate. Field theory extends the idea of institutional logics (Friedland &

Alford, 1991; Ocasio, 1997; Greenwood & Suddaby, 2006; Thornton, 2004) by

basing fields not on taken-for-granted rules and logics but rather on the idea that fields

are based on shared understanding. Shared understanding can be characterized in four

general categories: shared understanding of what is at stake in the field, shared

understanding of power relationships, shared understanding of what actions are

considered legitimate, and shared understanding of the interpretive frame.

Fligstein (2001) analyzes the tactics and strategies that social actors use to gain

cooperation. Framing, agenda setting, brokering, and robust action make up what

Fligstein refers to as “social skill,” where these social actors take the perspective of

and empathetically relate to others to persuade them to cooperate. This idea of social

skill originates from symbolic interaction and in the theory of fields Fligstein &


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McAdam (2012) discuss how people are willing to give up some individual freedoms

to be part of a bigger movement where they identify with the common meaning. From

a social movements perspective, King (2008) looks beyond financial and social

incentives as reasons to cooperate and describes three factors that contribute to

collective action: mobilizing structures, corporate and industry opportunities, and

framing processes. Collective action leads to binding people together and creating a

shared orientation, coordinating resources, facilitating information transfer,

communicating group sentiments, and implementing strategic responses. Collective

action is what leads to redefining or resettling of a field that is unstable or at risk.

Social skill, defined as the ability to persuade other actors to cooperate by

creating and embracing shared meanings, understandings, and identities, is one of the

key components of field theory (Fligstein & McAdam, 2012). Specifically for this

study we will look at the framing, brokering, and reorganizing tactics that actors use

to gain support and cooperation. Framing processes are the interpretations that actors

give to the work they do. They pull different individuals and actors together under the

same definitions and meanings specific to their context (King, 2008). Brokering

tactics, the ability to aggregate actors or groups together and to be the node of the

network for outliers, will give an organization a more powerful position in the field in

relation to others (Fligstein, 2001). When an organization changes repertoires of

action or methodologies, they are imposing a reorganization of activities of the field

(Scott et al., 2006). Framing, on the one hand, can be considered a symbolic action,

and brokering and reorganizing, on the other hand, can be viewed as substantive

actions.


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Methods and data To explore these research questions we employ an in-depth, longitudinal case

study of a work integration social enterprise (WISE) in the second-hand clothing

sector in Catalonia, Spain, with data collected mostly through interviews and archival

data. Once completed, around 20 semi-structured interviews will be conducted with

representatives from a majority of 15 organizations originally involved in the program

as well as other organizations in the field, such as state actors, governance institutions,

and donors. We have chosen to use a case study methodology because it grounds the

understanding of processes in culturally meaningful instances to better understand the

strategies used (King, 2008).

Charity retail organizations, such as Roba Amiga, collect used clothing and

household items donated from individuals and organizations. Although the activities

of clothing collection, sorting, and resale look similar between organizations, the

purpose behind them can differs. Charity retail organizations can be categorized into

four main types of purposes: (1) raise funds for an organization’s primary activities

(poverty relief, education, etc.), (2) provide a social service (low cost goods to sectors

of society with low income, social inclusion in labor market, etc.), (3) reusing and

recycling of goods on two levels (first, unwanted by one set of people but purchased

by another, and second, manufacture goods into another form), and (4) raise

awareness about the charitable cause (information center, leaflets, etc.) (Horne, 1988).

Roba Amiga can be categorized as an organization that fulfills three of the four

purposes: provides a social service by hiring at least 40% of its workforce from

people at risk of social exclusion; reusing and recycling of goods by selling used

clothes suitable for reuse and managing the recycling and proper disposal of unusable

items; and raising awareness about recycling and work integration through

communication campaigns and information in their stores.


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The Roba Amiga Program was founded in Barcelona in 2002 with a clear

goal: to organize and improve the overall management of textile waste by several

NGOs specializing in the collection and sale of second-hand clothes. By joining

together they were able to boost the amount of textile waste managed, thereby

achieving their common goals better, namely: (1) to create jobs for people at risk of

social exclusion; (2) decrease the volume of textile waste. With this joint effort, the

Roba Amiga program achieved a leading position in the textile collection sector in

Catalonia.

In 2006, five of the organizations participating in the program (Formació i

Treball, Recibaix, Solidança, ADAD l’Encant and Troballes) decided to establish the

Roba Amiga cooperative to exploit synergies and increase the organizations’

efficiency and capacity to manage textile waste. In 2012, the volume of used clothes

collected was 7,000 metric tons and the co-operative had a turnover of €5.6 m. All

these achievements enabled it to create a workforce of 152 staff and to boost the

amount of textile waste managed by 86.5% since 2007.

Expected Contribution After initial review of archival data and interview transcripts, the preliminary

results center around the timeline of events the organization has gone through, a

general map of the field, external triggers that have influenced changes, and some

actions taken to initiate change.


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Roba Amiga has gone through three main phases. First, when Catalunya Caixa

and the Un Sol Mon Foundation offered financial support in 2002 to start the program

and 15 organizations came on board to form the Roba Amiga Program. Second,

Catalunya Caixa and the Un Sol Mon Foundation decided to remove its funding in

2006 but strongly advised the member organizations of the program to continue self-

sufficiently. Five of the original 15 organizations were interested in the proposal and

formed a new organization which they called Roba Amiga Cooperative. Third, finding

it difficult to organize five organizations separately under the legal heading of a

cooperative, one of the organizations of the cooperative took the initiative to form a

social enterprise to manage and apply for funding to build a new processing plant and

invited the other four organizations to take part as partners of a new organization.

Only one other organization joined in this initiative forming the Roba Amiga Work

Integration Social Enterprise. These three phases mark three groupings of

organizations that can be compared to each other. The first group, “the autonomous”,

made up of eight organizations, did not continue with the mission that Caixa

Catalunya and the Un Sol Mon Foundation were imposing. They wanted to keep their

scope local, decide their own future, and maintain their operating size. The second

group, “the proactive”, made up of three organizations, ventured into new territory

forming a new organization under the structure of a cooperative that works together as

a self-sufficient entity setting up new rules and policies. The third group, “the

Formation of Roba Amiga Program2002

Creation of Roba Amiga Cooperative2006

Creation of Roba Amiga WISE2012

Figure 1: Three phases of Roba Amiga


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efficiency oriented”, made up of two organizations, sought out new ways to find

funding and scale up their activities.

Table 1. Organizations of Roba Amiga Program

Autonomous group Proactive group Efficiency oriented group

Andròmines

Dimas

Emaús

Fundació Engrunes

L'Arca del Maresme

Grup Horitzó del

Berguedà

Recicla Girona

Social Recollim

Associació Tapís

Fundació Volem Feina

ADAD L'Encant

Solidança Empresa

Troballes

Formació i Treball

Recibaix

The interviews have shown that there are tensions between the organizations

based on the choices that have been made at these critical points of change, see

relational map in figure 2. Some organizations in the autonomous group feel that their

own autonomy was more important than having one common voice for second-hand

work integration organizations in the region. The autonomous group frames their

contribution as the first in the region to do the kind of work they do. The efficiency

oriented group sees these changes as part of a process that began when the Roba

Amiga program started as a change from basic management to integral management.

The efficiency oriented also give meaning to certain events that happened along the

way as key learning experiences or opportunities available. For example, in 2011,

Roba Amiga Cooperative signed a collaborative agreement with a large Spanish

textile company who then three months later encouraged the organization to apply for

funding from a competitive fund. The funding they received was the impulse to scale

their efforts and centralize activities in one large plant.


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Andromines

Dimas

L'Arca del Maresme

Grup Horitzó

ReciclaGirona

Recollim

Engrunes

Emaús

Volem Feina

Tapis

Troballes

Recibaix

Solidança

ADAD

Formaciói Treball

Roba Amiga Work Integration Social Enterprise

Roba AmigaCooperative

Roba AmigaProgram

Humana

SOEX

FEICAT

AIRES

Competitors/PotencialPartners

Internal Governance Units

Caixa Catalunya

Inditex

Donors and Financing

Mango

Ayuntamientos

Agència de Residus de Catalunya

State Actors

BBVA

Second-hand social and environmental retail organizations in Catalunya

Legend

Conflict

Maintains positive relationship

Desired relationship

Field boundary

Organizational boundary

Subfield boundary

Note: Not all relationships are represented in this model. Data collection is still in progress.

This research contributes to the work previously done in the field by highlighting

key role of nonprofits in redefining themselves in a new field, rather than only

focusing on the organization adopting the rules from different institutional logics.

Events exogenous to the organization can be triggers for changes if the organization

wants to survive, but the organization plays a direct and active role in restructuring

and redefining the field which can have an effect on the other organizations in the

Figure 2. Relational Map of the Field


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field. Although this study is still in progress, we expect to be able to identify clear

instances of framing, brokering, and reorganizing in the field that have an effect on

the final outcome of where the field is now and who has influenced and sustains the

transition. This will further extend the concept of social skill by identifying key tactics

used to persuade cooperation and collective action. The practical implications of this

research are related to the current crisis facing nonprofits: trying to adapt to the

current circumstances for funding and support. They not only need to understand the

“rules” of their field but can actively play a part in reframing and redefining the field

based on their interests and visions.

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How NGOs redefine themselves: Transitioning from nonprofit ... · PDF fileHow NGOs redefine themselves: Transitioning from nonprofit to enterprise Solange Hai Daniel Arenas ESADE Business