The nonprofit sector includes a variety of organizations from foundations and religious affiliations to educational institutions, operating both nationally and around the world. In examining the nonprofit sector, the different goals of these organizations are obviously going to include a wide range of praiseworthy efforts, making a comprehensive characterization of the role of the sector almost impossible.
In order to comply with this challenge, I am going to compare the three sectors with values and ideas as a vantage point, and explore how different ideals shape the role of the nonprofit sector in society today.
To most people the nonprofit sector represents ideals of advancing the public good, and in doing so involved actors should act based on altruistic motives. As Thomas H. Jeavons puts it, the sector is supposed to consist of “caring” organizations that are involved for the cause, not for the money (Jeavons, 2010).
The for profit sector, on the other hand, is expected to have a profitable production as its main purpose, and everything besides that bottom line is secondary.
Now I realize, this is a very traditional, some might say conservative, way of putting it. Some corporations indeed do “well” and “good” at the same time (Berman, 2002), so why this rigid division of ideas in describing the two sectors?
I (over-)emphasize these differences in core values, because I believe the public’s perception of the two sectors are extremely influenced by these ideals. Jeavons explores how every nonprofit organization suffers when a scandal occurs to one, and Ebrahim presents tools for upholding accountability in order to redeem the image of nonprofits, thus putting pressure on the whole sector (Jeavons, 2010; Ebrahim, 2010). And while this notion is raising the standards for ethical management of nonprofits, the for profit sector is not hold accountable by the public in the same way.
The values found in the public sector are more ambiguous. From the end of the depression and up until the 1980’s, government was increasing and several welfare systems were introduced (Hall,2010). But since then neoliberal policies have dominated and the majority of the public supports a smaller government (Berman, 2002). Central to this notion is limited government spending, which is expanding the role of nonprofits, as the sector’s role is essentially to fill the gap between the public’s needs and government services.
So, in between the two sectors the role of the nonprofit sector is on the one hand expanding, as the welfare needs of a society tends to increase with time regardless of the size of the government (Berman, 2002), while the organizations that constitute the sector are being held at higher standards because of their nonprofit “nature”.
This could potentially affect the performance of nonprofits. The public and stakeholders’ high standards and focus on measurable results tends to skew the efforts in the direction of a more compliance-driven approach, where the main focus becomes complying with laws and expectations, rather than achieving the overall mission in the best possible way (Ebrahim, 2010).
By highlighting different values in the three sectors, I have tried to map out the difficult landscape nonprofits in today’s society must navigate in and what particular challenges they face. My focus has been to contrast the sectors, in order to better understand the specific nature of the nonprofit sector. However, I am well aware that in many ways the sectors are also interlocked and dependent on each other. Recent development of both the nonprofit and for profit sector has caused many of the boundaries to erode and blurred the lines between doing “good” and “well”.
Berman, Howard J. 2002. Doing "Good" vs. Doing "Well": The Role of Nonprofits in Society. Inquiry 39: 5-11.
Ebrahim, Alnoor (2010). The Many Faces of Nonprofit Accountability. In: Renz, David O, ed. 2010. The Jossey-Bass Handbook of Nonprofit Leadership and Management. Jossey-Bass. San Francisco, CA.
Hall, Peter Dobkin (2010). Historical Perspectives on Nonprofit Organizations in the United States. In: Renz, David O, ed. 2010. The Jossey-Bass Handbook of Nonprofit Leadership and Management. Jossey-Bass. San Francisco, CA.
Jeavons, Thomas H. (2010) Ethical Nonprofit Management: Core Values and Key Practices. In: Renz, David O, ed. 2010. The Jossey-Bass Handbook of Nonprofit Leadership and Management. Jossey-Bass. San Francisco, CA.