**2.1 Digital performance - DP**

To successfully achieve social visibility and contributions, nonprofits have been gradually and consistently entering the field of DC because it is easier and faster to: a) maintain contact with more stakeholders; (b) obtain access to immediately measurable outcomes. Furthermore, it provides a sense of involvement to a large number of individuals and organizations (Bryson et al., 2001). A larger pool of supporters is more probable to promote secure and reliable resources despite economic fluctuations (Galaskiewicz & Bielefeld, 1998). However, among the many criteria of nonprofit performance raised over the years (Baruch & Ramalho, 2004), the focus is on two terms that define how nonprofits organize their activities i.e. *effectiveness* and *efficiency* (Herman & Renz, 2008).

#### **2.2 Effectiveness vs. efficiency**

Nonprofit organizations are social entities intended for defined tasks, and the concept of a "goal" is integral to their definition (Daft, 2004). Organizational success is measured in two main dimensions: effectiveness and efficiency, both exemplifying the degree to which an organization achieves its goals.

So what are those goals, and who defines them? Defining organizational goals in nonprofits is not simple because of the multiplicity of stakeholders. Some nonprofits seek goals related to the welfare of their clients (human service organizations), while others speak in the name of groups, communities and society in general (advocacy organizations). In both cases, effectiveness is evidence of the organization's ability to use its resources to achieve its unique goals. Human services attend to "individual" level needs, while advocacy organizations' goals are intended to generate support and emphasize importance to society (Perrow, 1961). Organizational effectiveness is therefore a "relative", even "ideology-driven" or "ethical" approach to the attainment of goals, to the extent that they are often debated and sometimes abandoned. By contrast, efficiency is a "technical" measure of performance focusing on nonprofits' dependence on resources and the importance of managing those resources. According to this concept, organizations must ultimately consider performance as based on quantitative measures - input versus output. So NPOs - like for-profit organizations - implement organizational tactics striving towards increased rationality and technical efficiency (Bozzo, 2000; Bryson, Gibbons, & Shaye, 2001; Carson, 2000). If, for each unit of output, there is a decrease in requested inputs, efficiency increases. DC, characterized by immediacy, speed and accuracy, can thus improve efficiency - level of donations, immediate enlistment of volunteers - lower investment - fewer people involved, fewer hours of work, etc. What can be confusing is not the level of performance, but how stakeholders evaluate each aspect of it. If, for example, nonprofits lose prestige but gain in volunteer enlistment by using DC, then they may become less attractive and lose social visibility, for example with groups concerned with deviant behavior. Situations in such cases are often insoluble, sometimes with conflicting views between stakeholders, in regard to evaluating whether effectiveness is more desirable than efficiency.

#### **2.3 Private vs. public stakeholders**

Mitroff (1983) emphasizes the difficulties arising from excessive numbers of stakeholders. The more stakeholders there are, the more complex are their demands, expectations and conditions (Freeman & Evan, 2001). On the basis of the analysis, activities are adjusted to suit the stakeholder groups. Lack of agreement between stakeholders becomes apparent when performance criteria must be established or negotiated (Alexander, 2000), for example,

in questions such as who defines and who is responsible / accountable for delivery of a product or service. How NPO performance should be measured can arouse different opinions concerning those measurements (Rado et al., 1997; Mitchell, Aigle & Wood, 1997; Rowley, 1997). Some stakeholders adhere to the "technical" measures attached to costeffectiveness, while others tend to emphasize ideological aspects and ignore economic measures of success, i.e. efficiency. However, recent economic measures of efficiency have become vital for the survival of NPOs (Shmidt, 2002; Bielefeld, 1992; Crittenden, 2000; Galaskiewicz & Bielefeld, 1998). Nonetheless, some authors suggest that it is difficult to define DP using a single measure, whether objective (Carson, 2000) or subjective (Baruch & Ramalho; 2004; Forbes, 1998; Herman & Renz, 2008).

#### **2.4 Public stakeholders**

Government support is an important resource, and for many nonprofits - mainly those providing human services - their dependence on grants and contracts from the government is their principal source of survival (Gronbjerg, 1993). This is due mainly to the recent uncertainty caused by the economic crisis, as well as to increased competition. According to Young (1999), there are three economic perspectives that can assist in understanding and analyzing the connection with the government, namely: the "supplementary" role of nonprofits for services that are not provided by the government; the "complementary" relationship of "contracts" in the provision of services; and the "adversarial" pressure on the government to change policies and laws (Salamon, 1995).

#### **2.5 Private stakeholders**

Private donations (from organizations and/or individuals) and grants from different foundations are traditional sources of support for third sector organizations (Froelich, 1999). However, as Gronbjerg (1992, 1993) pointed out, there is inherent fluctuation in the scope and steadiness of private donations. This lack of certainty impacts on the activities of an organization, and can even contribute to changes in organizational objectives. For instance, grants, which are characterized by professional teams and formal procedures, have strengthened the formalization of organizations in the third sector by fixing conditions for obtaining them, demanding accountings of implementation and evaluation of projects, goal definitions, etc. (Carson, 2000). Likewise, due to the need to comply with the wishes of contributors and thus ensure their support, third sector organizations change their organizational objectives in accordance with external pressures that are not necessarily related to organizational goals or to the receivers of services, thereby endangering their legitimacy (Galaskiewizc & Bielefeld, 1998). In order to maintain capital flow and increase income, third sector organizations must also provide incentives such as: promoting donors' prestige, commitment by the organization to serve the community, and participation of donors in achieving these goals and in making decisions related to the organization (Markham, Johson & Bonjean, 1999).

#### **2.6 Individual vs. organizational stakeholders**

DC has overall positive effects in many spheres and, despite alterations over time, individuals using internet today are more likely to evaluate DC as central to increased social

involvement, civic participation, and community members' involvement. DC is often related to positive sentiments and a stronger sense of community "belonging''. The contribution of DC was first examined in relation to media in local communities (Keith, Arthur, & Michael; 1997; Shah, Mcleod & Yoon, 2001), and was viewed as a means to increase social capital (Shah, Nojin & Lance, 2001). Recently, Mesch and Talmud (2010) re-assessed the impact of DC and found improvement in levels of satisfaction and commitment to the community. Using a longitudinal design of two suburban communities in Israel, they presented evidence of increased effectiveness of nonprofit settings - communities - using DC. Similar results were found by Postigo (2009), who examined volunteers demanding reasonable compensation in the USA, i.e. social factors and attitudes and a sense of community, creativity, and accomplishment were all related to participation in Internet forums, as was an increase in 'ethical consumption' among young people (Banaji & Buckingham, 2009). As a result, nonprofit marketing as well as commercial marketing through DC strives for dear recognition of differences in youth cultures to gradually enhance DP Gennings & Zeitner, 2003). This is probably why, according to Tapia and Ortiz (2010), municipalities are attempting to create municipal-sponsored wireless broadband networks. The importance of increasing individual-level participation in local government is seen as a major goal in order to avoid wrong choices, failure, or mistrust of local governments by citizens.

To understand these effects on DCP we must also keep in mind that service organizations differ from advocacy groups because they address different types of stakeholders. Service organizations aim to achieve service in areas such as health, welfare and education, whereas the purpose of the advocacy groups is to be involved in national or international issues, presenting their ideas and participating in group discussions.

#### **2. 7 The DCP link**

According to Hamburger (2008), there is high potential for nonprofit organizations using DC as a medium, to channel social development, because volunteers recruited through the net can contribute significantly to the lives of many millions of people in need throughout the world. Hamburger insists that the positive potential of the Internet derives from understanding the informative and communicative aspects of net-volunteering, in which three separate types need to be addressed, namely: the personal, i.e. to individual needs, the interpersonal, i.e. the positive effects of interaction; and the group or organizational level outcomes which address the goals.

An early study (Hart, 2002) suggest that the Internet is a reliable means for building support, providing a cost-effective opportunity to build and enhance relationships with supporters, volunteers, clients and the community they serve. Organizations have discovered that consistent and well targeted e-mail communication encourages users to access information that is central to gaining support. Referring to charities, the author recommends using it as both a communication and stewardship tool, and a fundraising tool, but warns that this is only an aid, and not a substitute for cultivating and enhancing relationships. Similar conclusions have been reached in regard to American service organizations (Olsen, Keevers, Paul & Covington, 2001).

Jennings & Zeitner's (2003) exploration of Internet use in regard to the engagement of American citizens between 1982 and 1997, demonstrated that the "digital divide" in civic

engagement remained in place, indicating that Internet access has positive effects on several indicators of civic engagement, according to how much the Internet is used for political purposes. They concluded that Internet is effective only when personal political interest intersects with personal media familiarity. As the number of websites increases, (Hargittai, 2000) the battle to attract audiences may reduce the number of visitors who could possibly support nonprofits. This is apparently why recent studies focus on the DCP link. Barraket (2005) for example, in a content analysis of 50 Australian third- sector organizations' websites, showed use of DC and how such organizations are ( or are not) utilizing online technology to attract citizen engagement, are compatible with their organizational activities. This is surprising but not irrational because, as suggested by Mano (2009), targeting techniques of nonprofits are lacking in sophistication. Recent evidence shows that the scope and intentions of nonprofits using the Internet are relatively blurred. Indeed, adopting a stakeholders' approach the author shows that using the Internet cannot be effective unless the communication style and targeting "fits" the needs of the targeted stakeholders. The study' s empirical findings indicates that social marketing through DC increases support from private stakeholders, but decreases that of the public stakeholders.

Nevertheless, Bezmalinovic, Dhebar & Stokes (2008), evaluating the potential for successfully recruitment through online systems, show that technology is useful for selecting, recruiting and pooling volunteers, but that online processes also necessitate significant costs. Moreover, Finn, Maher and Forster (2006), using archival data, showed that DC has been the main vehicle for adoption and adoption-readiness for nonprofits in the United States, enabling them to take advantage of existing opportunities. Similarly, a growing field of studies in social marketing shows that technology can serve these organizational goals provided there is good fit between the medium used and its target (Mano, 2009). A recent study examining these aspects revealed that voluntary organizations now use much more technology to increase performance and sustain adaptation to environmental threats, but they still fall short of using the appropriate DC strategies to increase support for their cause (Mano, 2009). Similarly Suarez (2009), examining the social role of nonprofit e-advocacy and e-democracy (civic engagement) as identified by 200 nonprofit executive directors, revealed that rights groups, environmental organizations, and policy entrepreneurs are consistently likely to mention advocacy and promote civic engagement on their websites. Conversely, funding and/ or dependence on resources generally fail to explain nonprofit use of websites for social purposes.

An organization can be effective in some dimensions but less efficient in Others and *vice versa.* Organizational efficiency is related to the accomplishment of organizational objectives and their cost, and to an organization's ability to use available resources to achieve maximal results with minimal investment. In commercial organizations, efficiency is usually measured in financial terms such as the annual level of sales per employee. In public service organizations, however, the budget is measured against the number of employees in the organization, or the number of clients dealt with per employee per week as a measure of output. The efficiency of an organization does not attest to the nature of its products, their quality, or the level of service it provides, and therefore only reflects a limited view of organizational success (Bielefeld, 1992). Unfortunately, nowadays nonprofit organizations become "trapped" by these "market" criteria, pursuing efficiency rather than effectiveness,

which is the "wrong" way to achieve performance in nonprofit organizations (Galaskiewicz & Bielefeld, 1998). Reviewing these studies suggests that nonprofits are far more interested and adherent to effectiveness via DC, rather than efficiency. We combine the three proposed dimensions of the DCP link in Table 1.


Table 1. A taxonomy of digital communication targets according to type of non profit organization and type of stakeholders

#### PUBLIC STAKEHOLDERS

Fig. 1. Predicting Effective and Efficient DCP

Table 1 shows how nonprofits should treat stakeholders in order to obtain maximum effects of using DC. The model suggests that private stakeholders can be divided into two groups: a) recipients of services, and b) participants in the organization's online and offline activities. Public stakeholders are those who contribute and donate - money and in kind - for the benefit of the organization (Balser & McClusky. 2005). How DC improves performance in NPOs in fact represents how digitally mediated marketing affects expectations of stakeholders (Ackcin, 2001). Some recent studies show that, even though such differences are evident in the concept of "targeting", empirical evidence of how marketing in NP succeeds in targeting the "right" stakeholders (Vazquez, Ignacio, & Santos, 2002) and increases performance (Shoham, Ruvio, Vigoa-Gadot & Schwabsky, 2006) or whether levels of performance are adequately evaluated to reach conclusions, are

scarce, because DC investments in marketing do not necessarily increase stakeholder support (Brainard & Siplon 2004; Vazquez, Ignacio & Santon, 2000; Mano, 2009;. 2010). How does this affect DCP?

Figure 1 presents a model to facilitate understanding of the DCP link. As suggested above, while efficient economic measures are vital (Schmidt, 2002; Bielefeld, 1992), the institutional nature of nonprofits suggests that effectiveness measures rise successfully when DC addresses social goals. Then general support is expected, such as increasing awareness of a cause rather than concrete outcomes such as donations. However, when DC is dealing with individual-level outcomes such as satisfaction, participation, or donations, then private stakeholders' expectations and needs should be taken into account. More attractive sites could be one way of gaining direct and/ or indirect support (Crittenden, 2000; Galaskiewicz & Bielefeld, 1998; Mano, 2009).
