The Sociology of Nonprofit Organizations and Sectors

TLDR

Interest in nonprofit organizations has surged, yet sociological research has largely examined specific subsectors rather than nonprofits as a whole. This review seeks to articulate a distinct sociological perspective on nonprofits, contrasting it with economic theory and addressing why nonprofits exist and what differences they make at organizational, industry, and firm levels. The review concludes that nonprofit origins and behavior are shaped by institutional and policy contexts, that an industry‑level ecological view is needed to understand sector differences, and that nonprofitness lacks a universal definition, varying with legal, cultural, and policy factors across societies.

Abstract

Interest in and research on nonprofit organizations and sectors have developed rapidly in recent years. Much of this work by sociologists has focussed on particular subsectors rather than on nonprofits as a class. This review attempts to extract from a large and varied literature a distinctively sociological perspective on nonprofits, which it contrasts to influential work in economics. Two questions—“Why (and where) are there nonprofit organizations” and “What difference does nonprofitness make?”—are addressed at the levels of organization, industry, and firm. Three central conclusions, each with research implications, emerge from this review: (a) The origins and behavior nonprofit organizations reflect institutional factors and state policies as well as the social-choice processes and utility functions emphasized by economists. (b) Understandingth e origins of nonprofit sectors and behavioral differences between nonprofits and for-profit or government organizations requires an industry-level ecological perspective. (c) “Nonprofitness” has no single transhistorical or transnational meaning; nonprofit-sector functions, origins, and behavior reflect specific legal definitions, cultural inheritances, and state policies in different national societies.