How to engage stakeholder knowledge in decision-making: A case study from the Non-Profit Sector

The third sector comprises heterogeneous typologies of non-profit organisations that range from small local associations to large international foundations. Despite this heterogeneity, all non-profits feel an increasing pressure to adopt inclusive governance practices based on the engagement of stakeholders with a thorough knowledge of the community needs. Involving stakeholders allows an exchange of views on the main issues that non-profits face daily, which can help them to govern and manage philanthropic activities in a rational way. With the aim to contribute to the scant research on knowledge management in the third sector, this exploratory study investigates the role of stakeholder engagement as a source of knowledge in non-profit organisations. Specifically, how does stakeholder engagement provide useful knowledge for decision-making processes is what the study is about in this paper. We focused on Italian Bank Foundations, a particular kind of non-profit organisations that perform on behalf of the public interest and are legally constrained to use their assets and the resulting incomes to pursue the social and economic development of the local community. A qualitative case study of a large Italian Bank Foundation has been used to determine the relevant stakeholders engaged by the organisation, the tools by which their knowledge is acquired and how this acquired knowledge contributes to decision-making processes. The data of the case study were collected through semi-structured interviews with four key informants from the organisation, who have a deep knowledge and understanding of stakeholder engagement practices applied in involving local stakeholders in decision-making. The interviews were combined and compared using a data triangulation approach, together with other information derived from different sources, to improve the reliability of our findings. The results confirm that stakeholder engagement is a means of collecting knowledge that is otherwise dispersed among heterogeneous groups of stakeholders. In general, it emerges that there is a firm belief that stakeholder engagement can provide useful information for identifying community needs and developing philanthropic activities, although some difficulties characterise the acquisition of this information. By focusing on non-profit organisations, the study makes some important contributions to knowledge management research and offers new insights into the role of stakeholder engagement in providing knowledge for supporting decisional processes.