Frontiers of Entrepreneurship Research
1996 Edition
SUMMARIES

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NON-PROFIT ENTREPRENEURSHIP AT THE GRASS ROOTS: THE NFTE VENTURE FOR EDUCATING LOW-INCOME YOUTH


Lawrence R. Godtfredsen

Babson College
Babson Park, MA 02157

Telephone
617-239-4341

Fax
617-239-6465

Principal Topics

The National Foundation for Teaching Entrepreneurship is in a process of rapid growth as a non-profit. The extent to which NFTE has been able to maintain an entrepreneurial profile as it faces re-structuring is examined. Several aspects of the organization are included in the study: the relationship between the national office and the divisions around the country; the role of the division directors in the organization, the formula for creating incentives and driving performance, the feasibility of greater autonomy for the divisions, the practical and philosophic issues of fund raising and expenditures, and the evaluation process of programs in the inner cities. The relevance and value of the Balanced Scorecard Measures that drive performance of Kaplan and Norton are considered whether applicable to NFTE as a non-profit.

Method

The national office and seven of NFTE’s sites were visited. Division Directors were interviewed based on a questionnaire to gain their views on the above topics. The questionnaire included questions on shared mission, program implementation, program and teacher evaluation, financial incentives, fundraising problems and results, organizational structure, and the effectiveness of the communication process in the organization. Questions were also specifically designed to assess the divisions ability to maintain an entrepreneurial framework in terms of individual responsibility, autonomy, and motivation.

Major Findings

NFTE as a rapidly growing non-profit and as a company attempting to encourage the entrepreneurial spirit and practice faces formidable challenges as it seeks a formula to drive performance. The nature of programs in various parts of the country and the personality differences and abilities of division directors defies simplicity of structure and magnifies the need to communicate a common mission with divergent and diverse applications. NFTE stands at an important crossroads in its ability to devise a blueprint that will embrace entrepreneurship throughout the organization. Major philosophical differences need to be overcome regarding fund raising and divisional autonomy. Evaluation and compensation of teachers and staff at this point have not been resolved. NFTE also needs to resolve its operations and communications system to become more efficient at developing effective feedback throughout the organization. The lead entrepreneurial team is highly motivated but needs to address the issue of balance and avoid overlapping functions.

Implications

NFTE at this stage of its development provides an excellent example of a non-profit with all the problems that such organizations face in seeking ways to drive performance and evaluate effectiveness of their programs. For NFTE this is even more challenging in view of its commitment to entrepreneurship education as well as creating an organizational structure that is consistent with entrepreneurial values and behavior. The study suggests that the measures suggested by the Balanced Scorecard approach are far too simple to apply to NFTE and non-profits. There is need for a much more creative and comprehensive model especially in the case of organizations that embrace entrepreneurship and encourage greater autonomy within the organization.

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