In Search of Sustainable Social Impact: A System Dynamics Approach to Managing Nonprofit Organizations Operating in Multi-Project Contexts

University of Petrosani, Str. Universitatii nr.20, Petrosani, Romania

^* Corresponding author: ibrian.caramidaru@gmail.com

Abstract

Nonprofit organizations are typically seen as institutional settings that contribute to finding grassroots solutions to various social problems. But in their own turn, these entities exhibit by design manyfold frailties given by factors such as - precarious funding sustainability, balancing the multiple and, at times, divergent interests of stakeholders, finding a suitable manner to assess managerial performance. The aim of this paper consist in employing a system dynamics approach to modelling the managerial behaviour of nonprofit entities delivering their output through project networks. The system dynamics concepts of causal loops, stocks and flows dependencies are used to depict the complex relationships between projects, funding sources and social outcomes. This approach leads to identifying the systemic threatening to nonprofit sustainability and the dynamic nature of managerial decisions in the context of the interactions between nonprofit organizations, their beneficiaries and funding agencies.