NonProfit Handbook: Management / Edition 2

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Nonprofit managers need guidance on how to run their organizations more effectively and efficiently. Revised and expanded, this is an easy-to-use desktop reference on the operational policies and procedures of nonprofit organizations.
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Product Details

  • ISBN-13: 9780471179672
  • Publisher: Wiley, John & Sons, Incorporated
  • Publication date: 5/28/1997
  • Series: NonProfit Handbook Series
  • Edition description: Older Edition
  • Edition number: 2
  • Pages: 832
  • Product dimensions: 7.36 (w) x 10.25 (h) x 2.31 (d)

Read an Excerpt

The Self-Renewing Organization

The BelleAire Institute, Inc.

(Please note: Exhibits and any other illustrations cited in the following text refer to the print edition of this work, and are not reproduced here.)

Man's job is to govern the future, not simply be a victim of the wind blowing this way and that way. I know, the best plans are upset. But, without a plan there is no chance. Best efforts will not do it!
--W. Edwards Deming

1.1 To Govern Our Future

Without ever having met you, I know that we have at least one thing in common. Way back when we were just sprouts, someone important to us, someone dear to us, who cared about us and what we would become, gave us one of life's great lessons. "Do your best," they told us. It was--and is--good advice. In my case, it was my parents and grandparents. It was one of many terribly important, even vital, lessons in life and living that we learned as children. Simple, straightforward, not terribly complicated, but important, and true--then as children, and even more so, now that we are adults.

Since we already know you remembered that good advice from your childhood and are doing your best, we can go on to some other important questions:

  • Do you take joy in your work?
  • If not, do you understand why not?
  • If you are already doing your best, but there is not enough joy in your work, what else should you be doing to add this vital feeling, to help you "govern" your future?

Robert Fulghum tells us that "all I really need to know about how to live and what to do and how to be I learned in kindergarten." "Share everything," he reminds us. "Play fair. Don't hit people. Put things back where you found them. Clean up your own mess. Don't take things that aren't yours. Say you're sorry when you hurt somebody. Warm cookies and cold milk are good for you. Live a balanced life--learn some and think some and draw and paint and sing and dance and play and work every day some. When you go out into the world, watch out for traffic, hold hands, and stick together. Be aware of wonder. And then remember the Dick-and-Jane books and the first word you learned--the biggest word of all--LOOK."

He pointed out that everything you need to know is in there somewhere, from the Golden Rule to ecology, politics, equality, and sane living.

We should consider the lessons we learned the earliest as among the most important in our lives. The fact that we learned them as kids does not mean they were trivial. Just because they were basic does not mean they were uncomplicated or even easy to put into practice. "Playing fair" can be a real challenge in a highly competitive environment. The same for "sharing everything." If I share, will they share back, or use my share against me?

Similarly, we should remember that basic truths about achieving excellence can be straightforward and uncomplicated, and yet be critically important. To understand and apply the fundamentals of organizational improvement does not require extensive training in quantitative analysis or statistical theory. It does, however, require an understanding of how excellence is defined within functional areas of management and the basic definitions applied to levels of quality achievement.

"Man's job is to govern the future," Dr. W. Edwards Deming pointed out, "not simply be a victim of the wind blowing this way and that way."

Dr. Deming then went on to tell hundreds of Navy senior leaders: "I know, the best plans are upset. But, without a plan there is no chance. Best efforts will not do it. Is anyone here not putting forth his best efforts? Let him stand." This was followed by silence, then a great deal of laughter.

"I've been inquiring for years, trying to find him who is not putting forth his best efforts," Deming said, with tongue firmly in cheek. "No one has stood up yet. That is our problem! Everyone is putting forth his best efforts--without knowledge, without understanding what his job is, just doing his best. He will not take joy in his work without understanding what his job is. He cannot do his work without understanding why, and who depends on him. Man is entitled to joy in his work."

With apologies to Rev. Fulghum, doing our best is not enough. For us to govern the future, we must do those things that give us knowledge, that bring us to a better understanding of what our jobs really are and how they contribute to the aims of the organization--the customer-focused mission.

1.2 Beyond Quality Management

American organizations in all sectors of our economy struggle constantly to improve, to respond to the demands of operating environments that grow more competitive and challenging every day. Senior leaders have a variety of "tools" available to them, ranging from strategic planning and process improvement to new approaches to leadership and improved communications. Tried independently, these may produce modest improvements in the organization, usually after great investments of time and money. However, these improvements, achieved at great cost, are all too often temporary. Once a high level of excellence is achieved, most organizations find it much harder to sustain.

American leaders need insights to better understand how strategic planning, quality management, and intrinsically motivating leadership can and must work together to help ensure that hard-won gains in productivity, effectiveness, mission readiness, and profitability are sustained.

There can be no "prescription handbook." Like the proverbial lunch, there is no free "prescription" for quality management. "No one can come to your organization and 'install' something and tell you, 'Here, if you do this, this and this, quality is going to emerge everywhere.' That's just mischievous," notes Dr. Curt Reimann, former Director of the Malcolm Baldrige National Quality Award. There is no "instant pudding" for quality. But there is the ability and the need to share those techniques, approaches, principles, and best practices that work--even as we point the way to what lies beyond quality management.

Quality management was believed to be the "secret" behind Japan's come-from-behind international success, when it was "discovered" by American leaders in the early 1980s. Advocates credited its use for major successes in productivity and profitability by some of our organizations. Critics now say that it's not all that it was cracked up to be. Touted as the management miracle that would reestablish America as an international competitor, total quality management (TQM) became a growth industry for gurus and management consultants offering "salvation" to harried American business leaders. TQM spawned a fervent new breed of manager who talked the language of "empowerment" and "profound knowledge."

A new national quality award--the Malcolm Baldrige National Quality Award--was established to mirror a similar award--the Deming Prize--awarded in Japan. Hundreds of thousands of companies sought the criteria, and hundreds applied for consideration. Winning the Baldrige Award was good for morale--and business.

However, mixed signals began to emerge. Many companies that won the Baldrige award appeared to backslide from the high levels of excellence they had achieved. Others announced their commitment to quality with great public fanfare, anointed a guru, and fired up various "quality programs." Later, some of them quietly abandoned many of their "quality programs," but with private doubts as to why they had not measured up to their potential. Articles appeared in the business press criticizing "quality" as not working, or as so much managerial snake oil.

More experience with quality management revealed several contributors to a perceived softening of public opinion toward quality management. After years of highly positive coverage to any topic that claimed kinship to "quality," the press began to tire. "It's been given favorable attention long enough; it's time to be less cheerleader and more analytical," seemed to describe the turnabout in press coverage. More significantly, years of experience have shown the importance of addressing all three components that are essential to achieving--and sustaining--excellence: efficiency, effectiveness, and organizational environment. Organizations that focus too heavily or even exclusively on one or two of these areas may achieve higher levels of excellence for a period of time, but inevitably they are unable to sustain their hard-earned gains.

It became apparent, as shown by the experiences reported in many organizations, that quality management as typically defined, by itself, is incomplete. The primary emphasis is on process improvement and efficiency. While governing our future offers us the means to better our best, it requires that we know where we are going, how to get there, and how to create a climate for "safe change" in our organizations for ourselves and those for whom we are responsible: strategic quality leadership.

Expressed as "great lessons," if we wish to govern our future and that of our organizations, we must:

  • Know where we're going, why we are going there, and how we plan to get there.
  • Improve constantly in everything we do.
  • Make it safe to change for ourselves and those for whom we are responsible.

1.3 Governing Our Future and That of Our Organizations

Governing our future and putting joy in our work will take more than simply improving our processes--more than focusing on ever-greater efficiencies. We have to know where we're going, to define our strategic vision, mission, and guiding principles. We have to have a way as individuals and as organizations to see where we're going, even as we try to get better at what we do. As Dr. Deming so wisely said, we have to have a plan, a "vision"--a desired future state--of what we desire for ourselves and our organization, and a direction in which to travel. We need some "strategy."

The plan tells us what direction in which to move, and strategy gives us answers about what means we can use to get there. Moving from here to there, however, requires change, doing some things differently. When we were little kids, change was fun. We liked to take new routes home from school, to color the sun in the right-hand corner of the picture instead of the left. Before too long, however, we learned that change can be uncomfortable. In most of our organizations, change can be threatening to our power, our authority, our position. Change, we learned, is suspect, perhaps even dangerous. Our path up the organization hierarchy was through management. And managers allocated and coordinated. Most importantly, they controlled. Normally, they resist change unless it is their idea and to their personal advantage.

The essence of management is in its most vital function: dealing with the increased complexity in large organizations. Effective management enables our increasingly complex, far-flung organizations to avoid chaos, by helping impose order and consistency in key functions and operations. Management techniques taught in our business schools stress controlling, planning, and budgeting--setting goals and objectives for the future (usually a not too distant future). Detailed steps are determined to achieve targets, followed by the process of allocating resources--funds and people--to accomplish plans.

Management emphasizes those capabilities and processes needed to achieve the plan--organizing and staffing, creating an organizational structure: job descriptions and qualifications; communicating the plan down the "chain of command"; delegating responsibilities for implementing the plan; and then putting those systems in place that are needed to monitor implementation.

Accomplishing the plan is ensured by controlling and problem solving--comparing results against the plan in great detail--reports, meetings, and inspections. Deviations from the plan are identified. Then replanning and organization take place, focused on solving the problem.

The essence of leadership is coping with change. Leadership has become much more important to all organizations, particularly major U.S. corporations. The world has become much more volatile and competitive. Technological change on the order of exponential, international competition; rapidly fluctuating economic and political developments; and changing demographics is having a major impact on all our organizations because they are all connected in some way to the global marketplace.

The lesson we should take to heart about these global developments is that change is not only necessary, it is inevitable--change is the only constant. In addition, major change is increasingly necessary for any organization, large or small, if it is to survive and compete successfully in an always evolving environment. More change inevitably requires and demands more effective leaders--the organization's change managers.

Until recently and in normal times ("peacetimes"), most of our organizations did a relatively good job of managing and administering their product lines, services, and people. However, the overall climate and environments in which most of our organizations must operate more closely resemble that of war--from international competition to galloping technological change in the face of diminishing budgets. A "wartime" organization cannot be successful relying solely on management. A wartime organization needs competent, effective leadership at all levels. Over 200 years of our country's military history have taught us repeatedly that soldiers and sailors cannot be managed in battle--they must be led. The same can be said for any of us and about almost any of our organizations. Management is important, but effective leaders are required at all levels in our organizations.

The function of leadership is to produce change, not simply to react to forces and pressures as they occur. Intentionally determining and then setting the direction of that change or changes is fundamental to effective leadership, and effective leaders are change agents.

1.4 Palingenesis: Birth Over Again

Birth, growth, maturation, decline, and death--the cycle is ancient and universal. It is the subject of countless fables and myths from distant times. Finding out where the organization must go and how it should get there, constantly studying ways to improve its processes, changing outmoded concepts and approaches to ensure regeneration and growth--the life cycle never ends. If it does, death is the inevitable result. Only one thing holds death at bay: birth. Only birth can conquer death.

As with our bodies, long-term organizational survival depends on a continuous recurrence of birth to nullify the unremitting partial deaths our organizations suffer from competition, technological advances, and market saturation. From victories, the seeds of ruin can spring. Victorious countries continue to prepare for the last war. Organizations continue product lines or services long past their prime. Even organizations that have worked hard to become quality-managed organizations can and have fallen back from hard-gained high ground. When corporate death closes in, there is no salvation except dismemberment (acquisition) and rebirth as a reinvigorated component of another organization.

What is required to stave off inevitable decline or death is birth over again, regeneration, palingenesis. Organizational strategic planning is essential but not enough. Continuous improvement of all processes is essential, but leaders who are blind to other life-sustaining essentials can emphasize efficiency to the exclusion of other essential processes. Leaders can bring about change so disruptive or misguided that it destroys even as it breaks free from the outmoded past. Palingenesis requires a fertile organizational environment in which promising concepts and ideas can be conceived and nurtured to maturity. Even as processes and services are honed to ensure they make their strongest contribution to renewed organizational strength, their replacements are taking shape, form, and function behind them.

Two of the first words we ever learned were old and new. Mostly, we learned that new is good. Old is bad. New has potential--a future. Old is worthless, junk, irrelevant. At the time, we did not realize that new and old are simply at opposite ends of a continuum matrix of two factors: condition and time (see Exhibit 1.1).

"In mint condition" sums up the highest condition of new--newly minted, shiny, fresh, valuable. At this end, new means fresh, recent, vigorous, changed for the better, or reinvented. The opposite end of the condition continuum brings to mind associations of stale, no longer needed, outmoded, antique, obsolete, and disposable--near death.

With it, in step, cool, and relevant are terms we associate with things that are current, modern, and in sync with the times. This is the highest value of currency with whatever environment in which we may be operating or have as the center of interest. To be dated is to be totally out of sync, irrelevant, extraneous, and immaterial.

Organizational newness can also be understood in terms of condition and surroundings, or ambient, as seen in Exhibit 1.2. For example, an organization's status or condition can be seen as its readiness to fulfill the mission(s) for which it exists. If an organization lacks purpose, or is not meeting its public purpose, it is tottering on the lowest rung of mission-readiness. However, an organization that is customer focused and driven and is meeting its public purposes is fulfilling its mission.

Time and surroundings are closely linked as well. The complex circumstances and ambient in which an organization operates are constantly changing--they are time driven. Those organizations that are in synchronous rhythm with their operating environment(s) are seen to be relevant, modern, coping, fresh, and aware. If they are not, they are tuned out, unaware, and out of touch.

1.5 The Excellence Equation: Key to Sustainability

Organizations that are vigorously proactive in meeting their public purposes, staying mission driven and customer focused, and having synchronized their operations within their surroundings are prime candidates for excellence. Their effective use of strategic planning is the key factor in whether they get there and whether they stay there.

Organizations that can achieve and sustain excellence are rare. Some organizations have worked hard to achieve excellence only to see their hard-fought gains erode as the organization fell back from the pinnacle. They could not sustain their newness. For any organization to achieve and sustain excellence--to be self-renewing--it must understand and exploit the dynamic interdependent relationship among effectiveness, efficiency, and environment--the excellence equation:

N(ew) = E(nvironment) × E(ffectiveness) × E(fficiency)

Self-renewing organizations (SROs) have learned that they must operate at high levels of competence in both the condition (mission/effectiveness) and time (environment/efficiency) dimensions (Exhibit 1.2). In addition, they must create and sustain the enabling organizational environment needed to motivate, empower, and support the people on whom the services and customer satisfaction--results--depend.

Self-renewing organizations are effective (Exhibit 1.3). They use strategic planning to define and accomplish their customer-focused mission. They know they serve valid purposes. They know that they are needed and why. They know their public purpose is valid, and they continually adjust it to environmental conditions to achieve business results. Effective organizations use:

  • Customer focus and satisfaction as the foundation for setting priorities and focusing improvement activities. Results and trends in this area offer a means to determine the appropriate direction for improvement activities and initiatives. Effective organizations listen to and learn from their customers on a continuous basis, then use that intelligence to determine their current and near-term requirements and expectations.
  • Strategic planning to strengthen their customer-related, operational, and financial performance to improve customer satisfaction. Planning is essential to help organization leaders use customer and operational requirements as inputs to setting strategic directions. Strategic planning guides ongoing decision making, resource allocation, and organization-wide management.
  • Business results as the focus for all processes and process improvement activities to assess their progress toward superior value of their offerings as viewed by customers and the marketplace, and toward superior organization performance reflected in productivity and effectiveness.

Self-renewing organizations are efficient. They perform well and economically, with reduced waste of time, energy, and materials (at least in comparison with their competition). We applaud their use of process improvement, information and analysis techniques, and approaches to reduce waste, to streamline their operations, and to make economical use of all resources. They constantly reassess their processes, products, and services to ensure that they meet customer needs while consuming the least amount of resources (money, time, and personnel). Efficient organizations use:

  • Process management techniques to design and improve their customer/client service design, translating customer requirements into design requirements and into efficient and effective delivery processes. Efficient organizations also maintain process performance systems to ensure that they are performing according to their design and improved to achieve even better performance.
  • Information and analysis to support overall organizational mission goals and to serve as the primary basis for key decision making.

Self-renewing organizations create and sustain a transformational organizational environment in both leadership and human resource development and management. They adapt to changing environmental conditions and manage change effectively, constantly transitioning to new states, turning as necessary in new directions. They are constantly evolving. Often, we hear the phrase "They reinvented themselves." Organizations having a transformational environment use:

  • Visionary leadership that establishes strategic directions implemented by a leadership system that fosters high performance, individual development, and organizational learning--a leadership that takes into account all stakeholders, customers, employees, staff, volunteers, suppliers, partners, the public, and the community. Leaders in self-renewing organizations set directions, create a customer focus, establish clear and visible values, and exemplify high expectations.

Leaders in the SRO focus their efforts to ensure the creation of strategies, systems, and methods for achieving excellence, stimulating innovation, and building knowledge and capabilities. The organization's values and strategies should help guide all activities and decisions made by leaders at every level. Senior leaders in the organization should inspire and motivate staff and volunteers while encouraging involvement, development and learning, innovation, and creativity by all members of the organization.

Through their ethical behavior and exemplary personal roles in planning, communications, coaching, developing future leaders, review of organizational performance, and staff and volunteer recognition, senior leaders in the organization will serve as role models, reinforcing values and expectations and building leadership, commitment, and initiative throughout the organization. They use communications and dedicated commitment to realize the organization's values, expectations, and directions. Through transformational leadership, the organization's culture becomes one in which the self-fulfilled individual knows that change is not only safe, but necessary to maintain effectiveness and efficiency.

  • Human resource focus--development and management practices directed toward the creation of a high-performance workplace, directly linking human resource planning with the organization's strategic directions. Key human resource plans are derived from the organization's strategic and planned planning. The organization's job design, compensation, and recognition approaches enable and encourage all staff and volunteers to contribute effectively, operating within high-performance, empowered work units or teams. In the self-renewing organization, employee and volunteer well-being, satisfaction, and growth potential are based on a more holistic view of them as key stakeholders.

Self-renewing organizations are effective, efficient, and evolutionary. We may find it increasingly difficult to point out future examples of organizations at the lower end of the "in accord with mission and environment" curve. Those that lack purpose are irrelevant, costly, wasteful, and slow to react to their environment--prime candidates for extinction.

Self-renewing organizations gain enthusiasm from their base of intrinsically motivated leadership, reinforcing their desire to excel at ever-higher levels of achievement and comparison with other organizations with reputations for excellence. They have the visionary discipline in their senior leaders to plan and implement long-range strategies; an enlightened commitment to train, nourish, and foster intrinsically motivated "change agent" leaders at all levels of the organization; and the dedication to develop in their team-oriented work groups the tools and approaches needed to continuously improve all major organization processes.

Self-renewing organizations know where they are going, they constantly strive for excellence and improvement in all areas, and their leaders bring about nonthreatening change. An SRO is the kind of organization we would all like to be a part of. It is the kind of organization we know would offer us the best opportunity for personal development and to make a meaningful contribution.

When we use the excellence equation, we establish a straightforward, easily understood cognitive map by which to understand the three fundamental elements necessary for organizations to achieve and sustain excellence. Further, the equation helps us understand the relationship of these three basic elements to the seven fundamental areas of organizational leadership and management, including:

  • Effectiveness:
    • Strategic planning and development
    • Customer focus and satisfaction
    • Public service provider (business) results
  • Efficiency:
    • Process management
    • Information and analysis
  • Environment:
    • Leadership
    • Human resource development and management

In addition, by adapting the Baldrige Award/President's Quality Award Criteria as the basic definitions for these seven functional categories, we now have nationally defined descriptions and characteristics of organizational performance and achievement for each of these areas as well as the ability to benchmark our own organizations against established national criteria and standards. When we are better able to determine where our organizations stand in relation to national standards, we then have the ability to outline plans and strategies to help us overcome the "delta" (or short fall) between the next higher level of quality and the level at which we may now be performing.

The excellence equation is deliberately simplistic. It must be adapted, not adopted, to meet the assessment and planning needs of each individual organization. Hopefully, explaining and outlining the approach to excellence in this way will encourage others in their efforts to achieve higher levels of quality and improve their ability to do so. In the public service, nonprofit sector, success in quality management by thousands of organizations translates to an overall improvement in our national quality of life.

In addition, the excellence equation approach is intended as a way to encourage a deeper appreciation that sustained excellence is the goal we should be seeking in our organizations and in our lives, which requires the effective application of all three elements of the excellence equation. The excellence equation possibly can be considered a "great lesson," despite its simplicity. It could make a contribution to our collective ability to govern our future and that of our organizations in helping us:

  • Know where we are going, why we are going there, and how we plan to get there.
  • Determine how to improve constantly in everything we do.
  • Impart a better understanding of the importance that we make it safe to change, to reach, and to grow--for ourselves and those for whom we are responsible.
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Table of Contents


The Self-Renewing Organization (T. Connors).

Management Context of Non-For-Profit Organizations in the New Millennium: Diversity, Quality, Technology, Global Environment, and Ethics (J. Champoux).

Change Leadership or Change Management? (J. Til & D. Swalve).

A Hundred Year Horizon: Considering Sustainable Development in the Nonprofit Sector (K. Seel).

Lessons in Strategic Plan Implementation (M. Lu, et al.).

Governance Framework for Collaborations and Mergers (S. Feeney).

Marketing (E. Johnson & M. Venkatesan).

Management Implications and Opportunities of Global Communications: 'Hakken-Kraks Howl' and Global Dot Com: Storm, Norm, Form". (J. Poley).

Distance Learning for Nonprofit Organizations: Getting Started (J. Poley).

Internet Strategy for Nonprofits (M. Fox-McIntyre).

Nonprofit Success on the Internet: Creating an Effective Online Presence (M. Stein).

Strategic Media Relations (E. Wirth).

Contingency and Emergency Public Affairs (R. Thompson).

Strategic Planning for Information Systems (B. Peach & R. Platt).

Emergent Technology and the Not-for-Profit Organization (E. Power & A. Hart).

Building a Knowledge Marketplace: Best Practices to Create Learning Value in Cyberspace (J. Poley).

Technology and Strategy For Organizational Effectiveness (M. Osten).

Managing Organizational Growth (C. Curran).


Fund Raising Management (J. Greenfield).

Manual of Fund Development Policy and Procedure for Not-for-Profit Organizations (J. Greenfield).

Nonprofit Organizations as Entrepreneurs (R. Reynolds).

Commercial Ventures: Opportunities and Risks for Not-for-Profit Organizations (K.Seel).

Accounting (R. Larkin).

Budgeting Considerations (R. Reynolds).

Unrelated Business Income (J. Blazek).


Ethics and Values in the Not-For-Profit Organization (M. Meneghetti & K. Seel).

Leadership and the Self-Renewing Organization (J. Champoux).

Volunteer and Staff Relations (N. Macduff).

Law and Taxation (B. Hopkins).

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