Abstract for: Understanding the mechanisms driving the starvation cycle in Commercial Nonprofits

Nonprofits fall into feedback structures limiting their growth. As they prioritize program over overhead expenses to meet donors' expectations, the expectation is exacerbated over time (the well-known nonprofit starvation cycle). The behavior above explains donative nonprofits' behavior. Commercial nonprofits (which provide services for a fee) are known to fall into this cycle despite non-existent donor influence. We seek to identify the mechanisms leading to these feedback structures for commercial nonprofits We ground our research in empirical evidence by employing a semi-structured interview with nonprofit managers at a major foodbank network in Latin America. The interviews provide the qualitative basis for the conceptualization and formulation stages of the systems dynamics modeling. We extend the literature on nonprofit operations management and seek to identify the mechanisms, dynamics, and causal structures leading to growth or stagnation in commercial nonprofit organizations. Semi-structured interviews are underway but are expected to conclude at the end of April so that the results can be shared with the conference audience. We claim that nonprofit organizations fall into vicious cycles influenced by feedback structures. Using systems dynamics, this research aims to deepen our understanding and contribute to the decision-making theory in nonprofit settings. We seek to provide managerial insights into the mechanisms leading them to growth or stagnate and practical advice on how to escape the nonprofit starvation cycle.