Examining the Critical Role of Social Capital in Entrepreneurship: A Qualitative Study of Emerging Nonprofit Organizations.

Abstract

This qualitative study examines how individual nonprofit organizations (“NPOs”) emerge. I build on the limited empirical research by studying eight emerging NPOs in a single New Jersey county using forty qualitative interviews of both founders and early participants. Inclusion of early participants is a key aspect of this study’s design responsive to concerns in the literature that studies with an exclusive focus on founders ignore critical information. I document how NPOs emerge in an iterative fashion and not pursuant to a business plan in three papers. The first examines how these fledgling organizations identify, recruit and motivate people. Contrary to what the literature tells us about the general volunteer population, I found that, in the context of emerging NPOs, social capital is being used to call forth volunteer assistance and resources in support of the organizations. The second paper compares the composition and experience of these new NPOs with what is known about their for-profit counterparts to adjudicate among theories of organizational emergence using the entrepreneurship and organizations literatures as a proxy for comparison. I find these NPOs are the product of teams working to access resources in furtherance of mission, adding to the growing evidence challenging the notion that entrepreneurship is the work of individual mavericks. The third paper shows how these budding NPOs task and manage their work. The data help reconcile disconnects in the literature about how volunteers experience unstructured work and their impact on the developing organization, finding a continuing role for social capital as task manager. Examining the data for signs of Weber’s “routinization of charisma,” I find the material differences among the organizations which I argue may be a key indicator of whether an organization, so initially dependent on individual relationships, is capable of surviving beyond the life or interest of its founder(s). Thus, failure to routinize charisma offers a possible explanation for scholarly observations about the liabilities of newness and smallness. This dissertation has important implications for policies and programs intended to encourage entrepreneurship as well as for nonprofit management educators and consultants, affirming that context is critical and must not be ignored.