Explaining Nonprofit Organisation : The Social Value Approach

The paper argues that the major existing economic theories of nonprofit organisation are most suitable to those nonprofits which are protecting and promoting private rather than public interests. These theories therefore do not offer an adequate explanation why some nonprofits do directly serve public purposes on the basis of voluntarily contributed private contributions. The paper suggests that nonprofits of public benefit type exist because they represent a mechanism whereby individuals holding social values are able to realise them. The paper also identifies a number of disadvantages of markets and governments in the area of realisation of social values