CHAPTERS 1 & 2

CHAPTERS 1 & 2 - INTRODUCTION TO THE NONPROFIT SECTOR...

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INTRODUCTION TO THE NONPROFIT SECTOR PA 6382 Nonprofit Management
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What is a nonprofit organization? Terminology Nonprofit (a type of organization) Not-for-profit (a type of activity) Difference between nonprofit and for-profit organizations Ownership Private inurement
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Types of nonprofit organizations Corporation Trust Unincorporated association
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Defining characteristics of the nonprofit sector (Worth, 2010) The non-distribution constraint Tax-exemption
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What is the nonprofit sector? Problem in defining the nonprofit sector Defining the nonprofit sector by what is ―not‖ Non-profit Non-governmental The complexity and diversity within the sector
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What is the nonprofit sector? Alternatives to ―nonprofit‖ (Worth, 2010) Independent sector Third sector Charitable sector Voluntary sector Tax-exempt sector Civil society
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Nonprofit theory across disciplines (Worth, 2010) Economists’ view Market failure Government failure Supply-side theories Sociologists’ view Social capital theory Political scientists’ view Accommodate diversity Undertake experiments Provide freedom from bureaucracy Attention to minority needs Theories of commons
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Failure theories Market failure Contract failure (information asymmetry) Public goods Government failure Demand heterogeneity (median voter theorem ) Equity vs. Responsiveness Failure theories view nonprofits as gap fillers.
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Contract failure as an agency problem In certain situations, the purchaser (donor) is in the role of a principal who cannot easily monitor the performance of the agent (nonprofit organization). Consequently, there is a strong incentive to embed the relationship in a contractual framework, or ―governance structure‖ that mitigates the incentives of the agent to act contrary to the interests of the principal.
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What do we have the nonprofit sector? (Salamon, 2001) Historical legacy Market failure Government failure Pluralism and Freedom Solidarity
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Today’s Nonprofit Sector: Composition 48 14 10 7 6 6 Number of organizations Charitable organizations Social welfare organizations Fraternal organizations Labor and agricultural organizations Business leagues Social clubs
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Major Subsectors (employment) 41.9 21.9 18.3 11.8 3.9 1.9 0.3 Health Services Education/Research Social and Legal services Religious Organizations Civic, Social, and Fraternal Organizations Arts and Culture Foundations Independent Sector, 2002
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CHAPTERS 1 & 2 - INTRODUCTION TO THE NONPROFIT SECTOR...

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