This study examines how nonprofit leaders adapt their strategies when state policies conflict with their missions, drawing on the case of transgender-serving organizations in a conservative-majority US state. Based on prospect theory and nonprofit risk management literature, it analyses how leaders respond to policy risks and reshape organizational strategies and structures that reduce mission impact to avoid potential sanctions.
The study is a qualitative interview study with 20 leaders across eight transgender-serving nonprofits in one conservative-majority US state. Leaders were asked to describe how pending and new legislation necessitated, if any, actions and changes to the organization. Data analysis included iterative coding and reflective memos to categorize participant descriptions and connect sorted data to insights for nonprofit risk-management research.
Leader behaviors are sorted into two categories: anticipatory civic engagement to prevent policy risk and defensive operational redesign to avoid policy risk. Anticipatory civic engagement involved actions that reduced the punitiveness of legislation and warning program participants about how to navigate new laws. Defensive operational redesign involved shifting job expectations for staff and volunteers, engaging low-risk collaborations and shrinking operations in response to lack of successors. These moves stabilized the organizations and protected personnel from legal risks while reducing service impact.
This study underscores the critical role of consistent, effective nonprofit external affairs, as well as leadership with political awareness and astuteness, in preventing future legal risks.
Previous research in risk management has focused on nonprofit “mission creep” where growing nonprofits exercise strategic decision-making to ensure focus. This study instead focuses on nonprofit “mission clamp” where regulatory forces and policy threats, in this case legislation impacting transgender-serving nonprofits, require leaders to shift their management practices to prevent or circumvent new risks and sanctions.
