New nonprofit organizations are formed through a multifaceted process, and along the way, founding nonprofit entrepreneurs are likely to encounter various problems. This research note examines the extent to which 77 nascent nonprofit entrepreneurs encountered start-up problems during the earliest phase of the formation process, what types of problems they encountered, and how these problems impacted their attempt to start up a new nonprofit. The results indicate successful and unsuccessful nascent nonprofit entrepreneurs do not differ in terms of how many start-up problems they encountered. However, the type of the problems encountered had an effect on start-up success; two had negative effects (financial and information problems), and one had positive effects (regulatory problems). Ultimately, many attempts to found a new nonprofit are unsuccessful, indicating a need for researchers and those advising nascent nonprofit entrepreneurs to learn more about start-up problems and how to handle them.
AldrichH. E.MartinezM. A. (2001). Many are called, but few are chosen: An evolutionary perspective for the study of entrepreneurship. Entrepreneurship Theory and Practice, 25(4), 41-56.
2.
AnderssonF. O. (2016). Nascent nonprofit entrepreneurship: Exploring the formative stage of emerging nonprofit organizations. Nonprofit and Voluntary Sector Quarterly, 45, 806-824.
3.
AnderssonF. O.FordM. (2017). Entry barriers and nonprofit founding rates: An examination of the Milwaukee voucher school population. Nonprofit Policy Forum, 8(1), 71-90.
4.
BessG. (1998). A first stage organization life cycle study of six emerging nonprofit organizations in Los Angeles. Administration in Social Work, 22(4), 35-52.
5.
CarmanJ. G.NesbitR. (2013). Founding new nonprofit organizations: Syndrome or symptom?Nonprofit and Voluntary Sector Quarterly, 42, 603-621.
6.
CarrollG. R.KhessinaO. M. (2005). The ecology of entrepreneurship. In AlvarezS. A.AgarwalR.SorensonO. (Eds.), Handbook of entrepreneurship research: Disciplinary perspectives (pp. 167-200). New York, NY: Springer.
7.
CordesJ. J.SteuerleC. E.TwomblyE. (2004). Dimensions of nonprofit entrepreneurship: An exploratory essay. In Holtz-EakinD.RosenH. S. (Eds.), Public policy and the economics of entrepreneurship (pp. 115-151). Cambridge: MIT Press.
8.
de SotoH. (2001). The mystery of capital: Why capitalism triumphs in the west and fails everywhere else. New York, NY: Basic Books.
9.
DollhopfE. J.ScheitleC. P. (2016). Explaining variations in the nonprofit founding process. Nonprofit Management & Leadership, 27, 261-272.
10.
FrumkinP. (2002). On being nonprofit: A conceptual and policy primer. Cambridge, MA: Harvard University Press.
11.
GartnerW. B.GatewoodE. (1992). Thus the theory of description matters most. Entrepreneurship Theory and Practice, 17, 5-9.
12.
GermakA. J.RobinsonJ. A. (2014). Exploring the motivation of nascent social entrepreneurs. Journal of Social Entrepreneurship, 5(1), 5-21.
13.
HannanM. T.CarrollG. R. (1992). Dynamics of organizational populations: Density, legitimation, and competition. New York, NY: Oxford University Press.
14.
KwongC.TasavoriM.Wun-mei CheungC. (2017). Bricolage, collaboration and mission drift in social enterprises. Entrepreneurship & Regional Development, 29, 609-638.
O’brianR. M. (2007). A caution regarding rules of thumb for variance inflation factors. Quality & Quantity, 41, 673-690.
17.
RenkoM. (2013). Early challenges of nascent social entrepreneurs. Entrepreneurship Theory and Practice, 37, 1045-1069.
18.
SaxtonG. D.BensonM. A. (2005). Social capital and the growth of the nonprofit sector. Social Science Quarterly, 86, 16-35.
19.
StevensS. K. (2001). Nonprofit lifecycles: Stage-based wisdom for nonprofit capacity. Wayzata, MN: Stagewise Enterprises.
20.
StinchcombeA. L. (1965). Social structure and organizations. In MarchJ. G. (Ed.), Handbook of organizations (pp. 142-193). Chicago, IL: Rand McNally.
21.
van GelderenM.ThurikR.PatelP. (2011). Encountered problems and outcome status in nascent entrepreneurship. Journal of Small Business Management, 49, 71-91.
22.
van SlykeD. M.LecyJ. (2012, November15-17). Profiles of nonprofit startups and nonprofit entrepreneurs. Paper presented at the ARNOVA National Conference, Indianapolis, IN. doi:10.2139/ssrn.2175676
23.
WiewelW.HunterA. (1985). The interorganizational network as a resource: A comparative case study on organizational genesis. Administrative Science Quarterly, 30, 482-496.
24.
YangT.AldrichH. E. (2017). “The liability of newness” revisited: Theoretical restatement and empirical testing in emergent organizations. Social Science Research, 63, 36-53.
25.
YoungD. R. (1983). If not for profit, for what?Lexington, MA: D.C. Heath.
26.
YusufJ. E.SloanM. F. (2015). Effectual processes in nonprofit start-ups and social entrepreneurship: An illustrated discussion of a novel decision-making approach. The American Review of Public Administration, 45, 417-443.
