The non-profit sector is characterized by its service to the
public good, a multi-faceted concept, defined by the current needs of society. The
public sector (government), for-profit sector (business), and non-profit sector
collectively create the political economy. Examination of the three sectors
shows many similarities and differences not only across their respective commodity
production, but also participation, finance, governance, and values.
Commodities
Each sector produces commodities for consumption. Businesses
produce tangible products and services - clothing, electronics, Pilates
instruction – which consumers purchase. The government produces regulatory and protection
agencies, and laws, which are consumed by one’s participation in society. The
non-profit sector produces services, in the form of items and services – food,
clothing, legal services, medical attention, etc., which are generally consumed
by those who lack the means of purchasing these items through the business
sector. The non-profit sector also produces services that are not available
through the other sectors, such as places of worship and education. The
non-profit sector fills the gaps between society’s needs and what is offered
through the government and business sectors.
Participation
The participants in each sector are unique, but overlapping.
The consumers of each sector are certainly participants. The business and
government sectors also hire paid workers to create and deliver its
commodities. Such employees are experts in their field and undergo extensive training
and vetting. The non-profit sector largely relies on volunteers, though there
are also paid workers who operate in the sector. The volunteers are likely to
also be employees of one of the other sectors who donate their time and/or
money.
Finance
The business sector thrives in this category, as it is what
guides their operations. Their goal is to create a profit: create a commodity which
can be sold to consumers at a higher price than the manufacturing price. This
serves the employees, who receive part of the profit in the form of wages, increasing
their disposable income. The government has an annual budget, deliberated over
each year, with which they fund their commodities, i.e. military protection.
The non-profit sector relies on employees of these sectors spending some
of their disposable income on donating to their causes, and the government allocating
some of its budget to fund their causes.
Governance
The business sector is accountable to laws set forth by the
government sector, regulating their production and sale of commodities. The
government is regulated by its society through elected representatives. The
non-profit sector is regulated by the government sector, in large part by tax
provisions, to maintain their tax-exempt status. The government also regulates
how donations are taxed, used, and who may receive them. Each sector also has an internal governing body, or board, which works to maintain the sector’s
purpose.
Values
Each sector values success, as defined by their purpose.
The business sector is driven to success by maximizing profits. The government succeeds
when it adequately represents society in the laws it enacts and upholds the
integrity existing laws. The non-profit sector succeeds when its programs and
projects are sufficiently funded, staffed with volunteers, and effectively delivering
its commodities to those who need them.
The non-profit sector is unique, formed
as an adaptation to meet society’s needs, by the hands of society itself. Business
and government sector participants use their disposable time and income to
ensure that the non-profit sector thrives, as it offers services that are not available
(or affordable to all) through the other sectors. The non-profit sector would not
exist as it does today without its working, interdependent relationship with the
public and for-profit sectors.
Sources:
Berman, Howard J. "Doing “Good” vs. Doing “Well”: The Role of Nonprofits in Society." INQUIRY: The Journal of Health Care Organization, Provision, and Financing 39.1 (2002): 5-11.
Renz, David O. The Jossey-Bass handbook of nonprofit leadership and management. John Wiley & Sons, 2016.
