Differences in Financial Performance of Nonprofit Arts Organizations Across Executive Director Leadership Styles
Philanthropic contributions to arts organizations in 2013 increased 4.4%, yet some U. S. nonprofit arts organizations show poor financial performance. Executive leadership style is a well-documented tool that influences performance of for-profit organizations. The purpose of this study was to examine the relationship between leadership styles of nonprofit arts executive directors and financial performance measured in dollar amounts of contracts, grants, and annual personal philanthropic gifts. Transformational leadership was the theoretical foundation for the study. The Multifactor Leadership Questionnaire (MLQ) was administered online to executive directors of 117 nonprofit arts organizations within the Dayton-Cincinnati metropolitan area. Differences in the means of organizational financial ratios for each identified leadership style were measured using analysis of variance. Results indicated no statistically significant differences between leadership styles and organizational financial performance. Additional research including a larger, less homogenous population and the multirater form of the MLQ is recommended. Social change implications include recommendations to executive leaders to understand the impact of leadership on programmatic decisions to maximize financial performance and increase community stability by preventing closure of nonprofit arts organizations.