In search of the non-profit sector II: The problem of classification

Building on a previousVoluntas article (Salamon and Anheier, 1992b), which formulated a systematic approach to defining the non-profit sector for purposes of comparative research, this article takes on the complementary task of formulating a classification system that can be used to differentiate systematically the types of non-profit organisations that exist at the global level. To do so, the article first assesses a number of existing classification systems, such as the International Standard Industrial Classification and the National Taxonomy of Exempt Entities. Finding these systems inadequate, the article then introduces an alternative system, which we term the International Classification of Nonprofit Organizations (ICNPO). The ICNPO classifies non-profit establishments into 12 major groups based on their primary economic activity, and then further sub-divides these into 24 sub-groups. The result is a system that scores high in terms of five key evaluation criteria: economy, significance, rigour, organising power, and richness. What is more, initial tests of the ICNPO in a set of countries show that it performs well in coming to terms with the diverse types of non-profit institutions that exist around the world.Lester Salamon is Professor at the Johns Hopkins University, Baltimore, Maryland 21218 and Director of the Institute for Policy Studies there.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.The authors are grateful to Kusuma Cunningham for her assistance in developing the ICNPO and for compiling Appendix C of this paper.     

What Determines the Size of the Nonprofit Sector?: A Cross-Country Analysis of the Government Failure Theory

This article is an empirical examination of the government failure theory using a cross-country data set. The government failure theory is represented in the major existing literature as providing a sound explanatory basis for an interesting characteristic of the nonprofit sector, that is, there is a large variability in nonprofit sector size from one place to another. Salamon et al. (Social origins of civil society: An overview, Working Papers of the Johns Hopkins Comparative Nonprofit Sector Project, 2000) examined this theory using the Johns Hopkins Comparative Nonprofit Sector Project (CNP) data set, and consequently rejected the government failure theory. However, by applying the panel analysis approach to the CNP data set, this article shows that the government failure theory should not have been so easily rejected.     

In search of the non-profit sector. I: The question of definitions

In this paper we argue that the lack of attention to the third sector historically is primarily a result of the weakness and limitations of the concepts that are used to define and describe it. The purpose of this article is to remedy this situation by developing a general definition of the sector that can be used in comparative research. To do so, the article first identifies four alternative types of definitions that are potentially available and evaluates each in terms of three basic criteria. On this basis it concludes that the most useful definition is the structural/operational one, which includes in the non-profit sector organisations that share five basic characteristics. These are: formal, private, non-profit-distributing, self-governing and voluntary. The basic definition is then tested against the realities of three disparate countries and found to perform quite well. On this basis we recommend the structural/operational definition, particularly for comparative, crossnational research.Lester Salamon is Professor at the Johns Hopkins University,Baltimore, Maryland 21218 and Director of the Institute for Policy Studies there.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.     

Editorial

Helmut Anheier is Assistant Professor of Sociology at Rutgers University, New Brunswick, New Jersey, and Research Associate at the Institute for Policy Studies, The Johns Hopkins University, Baltimore, Maryland, USA.     

Editorial

Helmut Anheier is Assistant Professor of Sociology at Rutgers University, New Brunswick, New Jersey; Research Associate, Institute for Policy Studies, Johns Hopkins University, Baltimore, Maryland, USA.     

Defining the Nonprofit Sector: Some Lessons from History

This article seeks to establish whether the structural-operational definition of the sector, used by the Johns Hopkins Comparative Nonprofit Sector Project (JHCNSP), is universal in its applicability. Historical case studies of primary health care and social housing provision in nineteenth-century England demonstrate that the definition cannot accommodate the institutional diversity of earlier periods and does not produce meaningful sectoral distinctions. The structural-operational definition rules out of the sector a significant proportion of nonstatutory, nonprofit maximizing providers. In particular, it excludes the mutual aid organizations, which are widely recognized as important for the development of civil society and which have historically been considered to be key components of the sector. These case studies suggest that the structural-operational definition limits the capacity of the JHCNSP to fulfil its aim of establishing the factors that promote or retard the sector's development owing to potential measurement errors and the pattern of development that the project implicitly assumes for the nonprofit sector.     

Maternal morbidity and maternal mortality in the United States

The following interview with Dr. Donna Strobino on maternal morbidity and mortality in the United States was conducted in May 2008. Dr. Strobino is Professor and Vice Chair of Education in the Department of Population, Family and Reproductive Health at The Johns Hopkins Bloomberg School of Public Health. She received a PhD from Johns Hopkins University and a BA from Western Connecticut State University. Dr. Strobino is Director of the Maternal and Child Health Leadership Training Program, a core training program in the Department of Population and Family Health Sciences at the Women's and Children's Health Policy Center. Dr. Strobino's recent research includes studies of the social, psychosocial, and biologic risk factors for preterm birth among African American women, the impact of the Healthy Steps Program for Young Children, and the effect of maternal depressive symptoms on the growth of their young children.     

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.     

Politics and the development of the Hungarian non-profit sector

One of the important developments in post-Communist Hungary has been the growth of the voluntary or non-profit sector. Under the Communist regime, voluntary associations were controlled and independent organisations were largely suppressed. During the 1980s, advocacy groups and independent associations emerged to challenge the Communist monopoly on organisation. These challenges were instrumental in laying the foundation for the post-Communist non-profit sector, providing models of organisation and experienced activists. After the creation of a new legal framework in 1989 and 1990, the growth of the non-profit sector was dramatic. Two types of non-profit organisations have developed in democratic Hungary: associations predominate in membership activities, while foundations are active in fields requiring fund-raising. Attempts by the Hungarian Democratic Forum-led government to shape the non-profit sector to meet its goals were met with political pressure from professionals in the non-profit sector. The result was the beginnings of a contract-for-service regime and increased organisation of a contract-for-service regime and increased organisation of interests within the non-profit sector itself. This is a revised version of a paper presented at the 1994 Annual Conference of the Association for Research on Nonprofit Organizations and Voluntary Action (ARNOVA), Berkeley, California, October 1994. The author gratefully acknowledges support from the Program on Nonprofit Organizations (PONPO), Yale University. Helpful comments were provided by David Bronkema, éva Kuti, Debra Minkoff, Suzanne Morrah and members of the PONPO Colloquium.     

Tax policy toward non-profit organisations: an eleven-country survey

The role of private non-profit organisations in modern economic systems is poorly understood. The tax and subsidy treatment of non-profits relative to private firms affects the competitive position of each, and thus their relative strength within any industry; in the United States, for example, non-profit organisations play major competitive roles in such industries as hospitals, nursing homes, day care centres, schools and arts organisations.This paper reports results from a survey of tax policies toward non-profit organisations in eleven countries. The major findings are: (1) the definition and scope of such organisations varies considerably; (2) non-profit organisations are typically regulated by the tax collection agency, but in some countries there is also involvement from the government agency responsible for the particular realm of activity, such as health or education; (3) tax subsidies to non-profits take many forms — not only exemption from corporate profits tax but, depending on the country, for land, buildings, mail and motor vehicles; (4) almost every country limits non-profit organisations' unrelated business activities; and (5) donors are generally permitted to deduct donations of money from taxable income, although there are typically both minimum and maximum limits. These findings point up the larger task of understanding why such differences exist across countries, and what are the effects.Burton Weisbrod is John Evans Professor of Economics and Director of the Center for Urban Affairs and Policy Research, Northwestern University, Evanston, Illinois.Elizabeth Mauser is a PhD candidate in Economics at the University of Wisconsin-Madison.We thank the Ford Foundation for financial support. We also thank those people who responded to the survey questionnaire: Christoph Badelt (Austria), Patrick De Bucquois (Belgium), Miklos Marschall (Hungary), Jimmy Weinblatt (Israel), Disiano Preite (Italy), Mark Robson (United Kingdom), Julia Montserrat (Spain), Ching-chang Yen (Taiwan), Somchai Richupan (Thailand), John Simon (United States) and Wolfgang Seibel (West Germany). In addition, we benefited from reading draft papers by Frits W. Hondius (Council of Europe) and Sheila Avrin McLean (McLean & Co. Ltd), both of whom have done related work on tax treatment of charities in various countries, and from comments by Christoph Franz on an earlier draft of this paper. A version of this paper will appear in a forthcoming volume published by the Center for Social Policy Studies, Jerusalem, Israel. The editors are grateful for the permission of Dr Yaakov Kop, Director of the Center, to publish this paper inVoluntas.     

Beyond Nonprofits: Re-conceptualizing the Third Sector

The idea of a “third sector” beyond the arenas of the state and the market is probably one of the most perplexing concepts in modern political and social discourse, encompassing as it does a tremendous diversity of institutions and behaviors that only relatively recently have been perceived in public or scholarly discourse as a distinct sector, and even then with grave misgivings. Initial work on this concept focused on what is still widely regarded as its institutional core, the vast array of private, nonprofit institutions (NPIs), and the volunteer as well as paid workers they mobilize and engage. These institutions share a crucial characteristic that makes it feasible to differentiate from for-profit enterprises: the fact that they are prohibited from distributing any surplus they generate to their investors, directors, or stakeholders and therefore presumptively serve some broader public interest. Many European scholars have considered this conceptualization too narrow; however, arguing that cooperatives, mutual societies, and, in recent years, “social enterprises” as well as social norms should also be included. However, this broader concept has remained under-conceptualized in reliable operational terms. This article corrects this short-coming and presents a consensus operational re-conceptualization of the third sector fashioned by a group of scholars working under the umbrella of the European Union’s Third Sector Impact Project. This re-conceptualization goes well beyond the widely recognized definition of NPIs included in the UN Handbook on Nonprofit Institutions in the System of National Accounts by embracing as well some, but not all, of these additional institutions and forms of direct individual activity, and does so in a way that meets demanding criteria of comparability, operationalizability, and potential for integration into official statistical systems.     

A European perspective: The Nonprofit Almanac and the development of European profiles

Conclusion The Independent Sector approach to measuring the US non-profit sector, as summarised inThe Almanac, provides a valuable and instructive model for European and other attempts to describe and measure the sector. The aim of mappers in those other countries should not be to replicateThe Almanac, but to imitate its broad approach, using it to stimulate and encourage statistical efforts elsewhere. Although the time for whole-Europe mappings has not yet come — in fact, it is very many years away — individual European countries could and should make substantial progress. As I have argued, progress will generally be greatest when an imaginative blend of five main approaches is employed. This is exemplified by the Independent Sector's work, and would-be mimics should endeavour to match both this blending and the energy and zest with which the task has been tackled.Professor of the Economics of Social Care and Deputy Director of the Personal Social Services Research Unit, University of Kent at Canterbury and Co-editor,Voluntas.I would like to acknowledge a number of European colleagues whose comments assisted my preparation of this paper, in particular Edith Archambault, Paulo Barbetta, Andrea Bassi, Rudolph Bauer, Andrew Crook, Jim Jackson, Jeremy Kendall, Éva Kuti, Susan Saxon-Harrold, Wolfgang Seibel, Justin Davis Smith and Tymen van den Ploeg. This paper is lodged in the Personal Social Services Research Unit as Discussion Paper 873.     

Defining the Nonprofit Sector Cross-Nationally

Defining the Nonprofit Sector: A Cross-National Analysis, by Lester M. Salamon and Helmut K. Anheier. Manchester: Manchester University Press, 1997. 526 pp., $29.95 paperback. The Nonprofit Sector in France, by Edith Archambault. Manchester: Manchester University Press, 1997. 324 pp., $27.95 paperback. The Nonprofit Sector in Italy, edited by Gian Paolo Barbetta. Manchester: Manchester University Press, 1997. 309 pp., $59.95. The Nonprofit Sector in Sweden, by Tommy Lundstrom and Filip Wijkstrom. Manchester: Manchester University Press, 1997. 345 pp., $69.95.     

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.     

Voluntary welfare associations in Germany and the United States: these on the historical development of intermediary systems

This research note presents several comparative theses on the historical development of voluntary and non-profit welfare associations in Germany and the United States. The major argument is that voluntary and non-profit associations in both countries share one common root: the secularisation and socio-political consequences of the enlightenment. However, voluntary welfare associations in Germany and the United States have developed along radically different lines, due to their distinct political embeddedness in society. Following periods of divergence in which the German voluntary action emphasised state orientation, and its American counterpart market orientation, the two countries have entered a new period of convergence.This paper emanates from an ongoing project at the University of Bremen, which analyses the history of social welfare in the city of Bremen. In 1989, as senior fellow in philanthropy at the Institute for Policy Studies of the Johns Hopkins University in Baltimore, Maryland, I explored the private social welfare system in the United States, in particular comparing the results of former research on Germany with my studies in the United States. I am indebted to Kathleen D. McCarthy (New York), Helmut K. Anheier (Vienna/New Brunswick), Juergen Blandow (Bremen), Lester M. Salamon (Baltimore), Jon Van Til (Camden), Stanley Wenocur (Baltimore), and Manfred M. Wambach (Bremen) for their advice and encouragement. Grants from the Research Commission of the University of Bremen, the Fellowship in Philanthropy Programme of the Institute for Policy Studies, and the German Marshall Fund of the United States are gratefully acknowledged.     

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.     

Social Origins of Civil Society: Explaining the Nonprofit Sector Cross-Nationally

Recent research has usefully documented the contribution that nonprofit organizations make to social capital and to the economic and political development it seems to foster. Because of a gross lack of basic comparative data, however, the question of what it is that allows such organizations to develop remains far from settled. This article seeks to remedy this by testing five existing theories of the nonprofit sector against data assembled on eight countries as part of the Johns Hopkins Comparative Nonprofit Sector Project. The five theories are: (a) government failure/market failure theory; (b) supply-side theory; (c) trust theories; (d) welfare state theory; and (e) interdependence theory. The article finds none of these theories adequate to explain the variations among countries in either the size, the composition, or the financing of the nonprofit sector. On this basis it suggests a new theoretical approach to explaining patterns of nonprofit development among countries—the social origins approach—which focuses on broader social, political, and economic relationships. Using this theory, the article identifies four routes of third-sector development (the liberal, the social democratic, the corporatist, and the statist), each associated with a particular constellation of class relationships and pattern of state-society relations. The article then tests this theory against the eight-country data and finds that it helps make sense of anomalies left unexplained by the prevailing theories.     

A Comment on Salamon and Anheier's “Social Origins of Civil Society”

In this paper we examine Salamon and Anheier's characterization and testing of alternative theories of the size and scope of the nonprofit sector in different countries. We identify various nuances and refinements of these theories, and we suggest ways in which their validation through statistical testing can be extended and improved. Finally, we offer additional avenues of research that could productively exploit the important cross-national data set assembled by the Johns Hopkins Project.