Entrepreneurship theories of the non-profit sector

This article summarises the main results of entrepreneurship theories of the non-profit sector and discusses the impact they may have on theory development and on the real world non-profit sector. It is pointed out that the entrepreneurship approach advances our knowledge of the non-profit sector, especially by stressing the supply-side aspect and by focusing on the preferences individuals must have in order to engage in non-profit activities. There is empirical evidence consistent with entrepreneurship theories. Yet most observations do not exclusively support entrepreneurship theories but also provide evidence consistent with other economic theories of the non-profit sector. This illustrates that the various economic theories of the non-profit sector are more complements than substitutes. Furthermore, entrepreneurship theories indirectly help to improve the image non-profit organisations have in the real world; therefore they play a prominent role in teaching programmes which have been established to train non-profit managers. The author gratefully acknowledges the comments of the participants of theVoluntas Symposium at Yale University, especially the comments made by Estelle James, James Ferris and Dennis Young.     

European competition law and the non-profit sector

Although there has been a debate in the USA for more than two decades about competition policy and non-profit organisations, the debate has not yet had the same prominence in Europe. Only in the last few years, even in the USA, has anti-trust policy toward the sector been examined. The paper examines the position for two groups of competition issues in European Community law: first, the problem of the lawfulness of grant aid, given the rules against state subsidies distorting competition; and second, the application of the rules for competition in the single market including EC anti-trust law. Particular legal problems are identified for non-profits which use geographical catchment area agreements with similar organisations. Finally, the paper examines a range of policy issues which arise on consideration of Community law, including the idea of community development as a locally autarchic objective, the terms of competition for grants and contracts, and the possible implications of the future application of European competition law to non-profits in the Community.This paper is part of a series of studies on non-profit organisations and competition policy; others include 6, 1991; 1992a,b. Many people, all of whom know much more about the law and the economics of this subject than I do, have helped me with this paper. I am particularly grateful to Richard Steinberg, Tymen van den Ploeg, Richard Whish, Martin Knapp, Jeremy Kendall and Stephen Lloyd who read and commented on earlier drafts. Richard Whish urged me to greater caution on the meaning of undertaking and interstate trade effects, pointed out the relevance of the subsidiarity provisions in Maastricht, put me straight on the merger regulations, and saved me from a number of legal errors. I am grateful to Jeremy Kendall for pointing out the BUPA case to me, and to Tymen van den Ploeg for directing me to theDaily Mail case and explaining its significance to me with greater patience than I deserved. I have also benefited from advice from Lindsay Driscoll, Nigel Tarling, Bridget Phelps, Anita Randon and Janet Morrison. I am grateful also to all the people who attended an NCVO seminar on 27 April 1992 at which a late draft of the paper was given for their comment. None of them is responsible for my errors. Although I am employed by the National Council for Voluntary Organisations, London, the paper represents my own views and not those of the Council.     

A profile of the non-profit sector in Romania

With the revolution of December 1989, citizens of Romania gained the right to form non-profit organisations for the first time in 40 years. Since then, Romania has begun to explore the frontiers of private initiative through the introduction of non-profit, non-governmental organisations as well as profit-making businesses. In this article we review the historical development and legal framework of Romania's emerging non-profit sector. We also provide the first empirical snapshot of that sector by applying the International Classification of Nonprofit Organizations (ICNPO) developed by Salamon and Anheier to 499 organisations identified in theSoros Catalogue of Nongovernmental Organizations in Romania: 1991–92. Finally, we speculate on the future development of the Romanian non-profit sector by considering alternative scenarios involving the relationships between indigenous nonprofits, international NGOs and the Romanian government.     

The possible role of the non-profit sector in Hungary

A common feature of most non-profit theories is their concentration on the service-providing role of non-profit organisations, and the neglect of their redistributional role. At the cost of some simplification, there are two possible public policy responses to social inequalities: (1) the welfare state model with welfare redistribution under government control; and (2) the non-profit-based model — a large network of private organisations heavily supported by the government and complemented by government delivery of services. After 40 years of state socialism, Hungary now faces some important questions. What will be the role of the new voluntary sector? What are the possibilities of following the Western European route — a version of the welfare state model — or the American way — a non-profit-based model bolstered by ‘third-party government’? The present Hungarian situation is ambiguous; we can find arguments for and against both. It is also argued that a mixed solution, some cooperation between the public and private sectors, is needed. The Western European, American and Hungarian experiences indicate that only a strong for-profit sector and a developed, harmonious government/non-profit partnership can ensure healthy social and economic development. The present Hungarian situation is far too complex and difficult to promise a fast and conflict-free establishment of this partnership. But both public institutions and government are acting in a way that may result in the development of a government-supported non-profit sector. There may be an opportunity for developing a ‘Hungarian welfare state model’.     

Measuring the non-profit sector cross-nationally: a comparative methodology

As a result in part of the way non-profit institutions are defined and treated in the United Nations System of National Accounts (SNA), little is known about the size, scope, financial base and role of this set of institutions at the international level, even though their importance is increasingly being recognised throughout the world. To remedy this significant lack of systematic information on non-profit institutions cross-nationally, the Johns Hopkins Comparative Nonprofit Sector Project has undertaken a major analysis of the economic role of this sector in twelve countries throughout the world, utilising a more meaningful definition of the sector and an approach that is otherwise consistent with the overall thrust of the SNA system. This paper outlines the basis of the more inclusive definition of the non-profit sector embodied in this project, the classification system formulated to structure data-gathering on this more broadly-defined sector and the data assembly strategy developed to build up key estimates of the scale, structure and revenue sources of the non-profit sector in the project countries. The article concludes with a recommendation to incorporate a similar approach to the assembly of data on the non-profit sector into the ongoing SNA system on a regular basis.Professor Lester Salamon is Director of the Institute for Policy Studies and Director of the Comparative Nonprofit Sector Project at the Johns Hopkins University, Baltimore, Maryland, 21218.Helmut Anheier is Research Scientist at the Institute for Policy Studies at the Johns Hopkins University and Assistant Professor of Sociology at Rutgers University, New Brunswick, New Jersey, 08903. He is co-editor ofVoluntas.     

Measuring the US non-profit sector: a progress report

The input-output model currently used for estimating the size, scope and dimensions of the non-profit sector in the US economy is based on the SIC system. Unfortunately, this system is inadequate to provide detailed information on the non-profit sector. In response, we developed a classification system — the National Taxonomy of Exempt Entities (NTEE) — to define and measure the sector more accurately. This article describes the relationship between the SIC-based measures and the NTEE based measures, and reports on current efforts to link the NTEE system with tax data bases maintained at the Internal Revenue Service.Virginia Hodgkinson is Vice President for Research at Independent Sector, Washington, DC, 20036.Murray Weitzman is a Senior Research Consultant at Independent Sector.     

Donor relationship management practices in the South African non-profit sector

The importance of non-profit organisations (NPOs) in the South African development sector is undisputed, especially after the economic recession that negatively affected government's delivery of social services. Despite its important role, NPOs experience great difficulties, obtaining sustained funding.     

Role of Canadian user-led disability organizations in the non-profit sector

User-led disability organizations have emerged as an important force in the non-profit sector. While much is known about the traditional disability organizations that began to proliferate in the 1950s (e.g. National Institute for the Blind), relatively less is known about the user-led organizations that emerged in the 1970s. Using a collective case study approach, phase 1 was a policy review and key informant interviews with members of user-led and traditional organizations and government. Phase 2 surveyed affiliates of user-led organizations. Phase 3 integrated the findings from phases 1 and 2. Major themes were that user-led organizations: reflected a new paradigm and gave voice to people with disabilities; had a unique role in systemic advocacy and shaping policy; that leadership is critical but in need of rejuvenation; had links with other organizations which provide a collective voice, solidarity and hope; had diverse strategies for local resource mobilization; had financial support from government which was both constrained and mobilized.     

Public good theories of the non-profit sector: Weisbrod revisited

Burton Weisbrod's 1975 article, Toward a theory of the voluntary non-profit sector in a three-sector economy, models non-profit organisations as suppliers of public goods which are undersupplied by government to heterogeneous populations. This article examines the implications, extensions and empirical tests of the Weisbrod theory. It also examines the theories of pure and impure altruism, the heterogeneity hypothesis, and the various ‘publicness’ indexes of non-profit output. The commonalities between the public good model and the trustworthiness model of non-profit organisations are also explored. He is also a Research Associate of the Mandel Center for Nonprofit Organizations at Case Western Reserve University.     

The non-profit sector in a national accounts framework

This paper first reviews the measurement and presentation of non-profit institutions in the US national income and product accounts. For the most part in these accounts, transactions of non-profit institutions serving individuals are consolidated with those of the individuals served and recorded in the personal income and outlay account, a treatment that a majority of users have never found satisfactory. The paper next details the recommendations for these institutions proposed for the 1993 System of National Accounts (SNA). The paper then offers some suggestions on how the treatment of non-profit institutions in the US national income and product accounts might be modified in the light of the 1993 SNA recommendations.This paper was originally prepared forImproving Economic Statistics: Measurement of the Nonprofit Sector and Its Presentation in Federal Statistics, a workshop sponsored by The Committee on National Statistics, National Research Council, May 21–22, 1992, at the National Academy of Sciences, Washington, DC.The author wishes to acknowledge the helpful comments of colleagues at the Bureau of Economic Analysis and other participants in the Workshop, as well as those of two anonymous reviewers. The views expressed are those of the author and do not necessarily reflect the views of the Bureau of Economic Analysis or the Department of Commerce.     

Public relations and fund-raising encroachment: Losing control in the non-profit sector

Although scholars have examined marketing encroachment on public relations in the for-profit sector, little research has been done on encroachment by fund raising in the nonprofit sector. This article documents fund-raising encroachment and theorizes about external and internal factors contributing to it. It concludes that role as a technician, perception of public relations as a secondary function, organizational turbulence, and dependency on private gifts lead to the takeover of the public relations department.     

Bulgaria's non-profit sector: the search for form,purpose, and legitimacy

Bulgaria, like other East European nations since the collapse of communism, has moved rapidly to form private, self-directed non-profit and voluntary organisations. Like those nations too, Bulgaria faces a number of challenges in its pursuit of forming a strong non-profit sector. Chief among those challenges are establishing a sound legal foundation, defining the social purposes and functions of the non-profit sector, and establishing the legitimacy of these organisations in the minds of the Bulgarian people. These three challenges are analysed in the essay, following an overview of the current make-up and characteristics of the emerging non-profit sector.     

The non-profit sector in East Germany: before and after unification

The paper describes how the non-profit sector in East Germany has passed through several distinct phases in recent years. It shows how the role of the non-profit sector under the system of party dominance and centralised economic and social planning signified a major contradiction of East German society: the artificial under-development of civic society in eastern Europe's most successful economy. During the first phase of the transition period in late 1989, the expression and manifestation of political views was predominant. With the disintegration of the socialist party-state, the needs for social service provision increased. West German organisations have increasingly become the dominant factor in East German non-profit sector affairs. The paper argues that the East German non-profit sector will emerge as a slightly poorer and more secular version of its West German counterpart.     

On scale and scope and the history of the non-profit sector in the United Kingdom

This article argues that Alfred Chandler's analysis of the British firm cannot be transposed to the very different context of non-profit organisations in Britain. Both in relation to charitable non-profit organisations and mutual benefit organisations, Chandler's theory of the development of firms does not help explain organisational development. The main thrust of the argument is that the explanation for the smaller size of charitable non-profits in Britain than in America is largely institutional and partly socio-cultural; the explanation does not lie in any failure in Britain to adopt new techniques of management and organisation. With mutual benefit non-profits, a rather different account is presented. ‘Mutuals’ which had a strong fraternal element were relatively more successful in Britain than in America, although there is less difference between the two countries with regard to ‘non-fraternal’ mutuals. Once again, it is argued that institutional and socio-cultural factors—rather than the factors identified by Chandler—account for this. I wish to thank Desmond King for his helpful comments on an earlier version of this essay.