The Economics of Nonprofit Institutions: Studies in Structure and Policy
Social science research on the nonprofit sector has multiplied in recent years. Even economists, used to concentrating on the private for-profit sector, are beginning to recognize the importance of studying organizational alternatives to conventional business firms. Yet, while a scholarly literature is rapidly developing, it is not easily accessible either to faculty members seeking to assemble course materials and to introduce themselves to a new field for original research or to thoughtful nonprofit managers and sponsors wishing to reflect on the strengths and weaknesses of the sector.
In this volume I attempt to respond to some of these needs by assembling a series of economically oriented articles that cover a range of theoretical and policy-oriented topics. The articles vary in technical and economic sophistication from quite theoretical pieces using the mathematical apparatus of modern economics to entirely verbal presentations written by economists for an audience of lawyers, nonprofit managers, and policy analysts. Thus, technically trained economists can see how their tools are being used to analyze nonprofit organizations while noneconomists can gain an appreciation of the way economic arguments can contribute to our understanding of the sector.
The book is organized into two parts. The first half outlines several different economic rationales for the existence of non profits: nonprofits may provide supplemental public services, they may be established as a response to information imperfections when trust and altruistic motives are important, or they may be vehicles for a diverse set of entrepreneurial objectives other than profit maximization. The second half concentrates on a series of policy issues: the tax deductibility of contributions, the link between government grants and private donations, the regulation of fundraising, and the exemption of nonprofits from the corporate income tax.
Introduction by Susan Rose-Ackerman.
[Individual chapters in each section are analyzed].
Models of nonprofit firms:
1. Government failure.
2. Contract failure and information asymmetry - includes Comments by Sharon
Oster and Estelle James.
3. Entrepreneurship and professional control.
Public policy toward nonprofits:
4. The charitable deduction - includes Comments by Harold M. Hochman.
5. Government grants.
Bibliography in notes and references.