Author: White, Michelle J.

Publication Year: 1980

Media Type: Book

Summary:

Sponsored by the Committee on Urban Public Economics. Three major research issues present themselves to economists working in the nonprofit area. The first is to develop an overall theory of the behavior of nonprofit firms analogous to the theory of profit maximization for for-profit firms or to the theories of staff or budget maximization behavior recently proposed for public sector bureaucracies. The second important research issue concerns the sectoral mix within industries; that is, why do some industries contain predominantly non-profit, public sector, or for-profit firms, while others contain a mixture of firms in two or even three sectors. The third major research issue concerns public policy toward the non-profit sector.

Abstract:

Sponsored by the Committee on Urban Public Economics. Three major research issues present themselves to economists working in the nonprofit area. The first is to develop an overall theory of the behavior of nonprofit firms analogous to the theory of profit maximization for for-profit firms or to the theories of staff or budget maximization behavior recently proposed for public sector bureaucracies. The second important research issue concerns the sectoral mix within industries; that is, why do some industries contain predominantly non-profit, public sector, or for-profit firms, while others contain a mixture of firms in two or even three sectors. The third major research issue concerns public policy toward the non-profit sector.

As just indicated, nonprofit firms are subsidized in many ways from public funds, both in the form of open-ended tax exemptions and in the form of grants and contracts from public sources for specific purposes. Thus an important item on the research agenda for nonprofits is to evaluate these subsidies, to consider whether nonprofits produce a return consistent with the value of the subsidies, and to pose the normative issue of whether these subsidy arrangements are in need of revision or reform.

The seven papers in this volume were presented at the spring 1980 meeting of the Committee on Urban Public Economics held at the Joint Center for Urban Studies of Harvard and MIT and supported by The Urban Institute. The program was organized by Harold Hochman, Jerry Rothenberg, and Michelle White. The aim of the conference was to encourage and present recent research on the nonprofit sector, stressing both interrelationships among the three sectors and issues relevant for public policy.

CONTENTS
1. An introduction to the nonprofit sector/Michelle J. White, New York University.

2. The ambivalent value of voluntary provision of public goods in a political
    economy/Jeffrey H. Weiss, Baruch College, City University of New York.

Introduction.
Overview of Game I.
Game I: the players.
The rules of Game I.
The characteristic function.
The core.
Governmental market failure.
Overview of Game II.
Rules of Game II.
The role played by the one-person coalitions.
Answers to the central questions.
Discussion.

3. Institutional constraints and art museums management/Kenneth W. Clarkson,
    Law and Economics Center and University of Miami School of Law.

Variations in organizational constraints between proprietary and nonproprietary museums.
Variations in resource use in nonprofit museums.
Modifications of decision makers' constraints for improving outcomes.
Summary and conclusions.

4. The role of citizen interest groups in environmental policy formation/Paul B. 
    Downing, Florida State University and Gordon L. Brady, National Commission on 
    Air Quality.

A model of a citizen interest group.
The origin and funding of citizen interest groups.
Institutions, funding, and behavior of citizen interest groups.
Some reactions to behavior of citizen interest groups.
Summary of findings.

5. Do government grants to charity reduce private donations?/Susan Rose-Ackerman,
    Yale University.

Introduction.
Neoclassical model.
Government grants in a more realistic model of the charitable sector.
Conclusion.

6. Why are nonprofit organizations exempted from corporate income taxation?/Henry
    Hansmann, Yale University.

Introduction.
The nature of exempt organizations.
Defining taxable income for nonprofits.
Distributional considerations.
Subsidization of services.
Consistency with the charitable deduction.
Compensating for capital constraints.
Uncovered ground.
Conclusion.

7. Entrepreneurship and the behavior of nonprofit organizations: elements of a
    theory/Dennis R. Young, State University of New York, Stony Brook.

Introduction.
Entrepreneurship.
Strategy of theory construction.
Models of entrepreneurs.
Screening by field or industry.
Screening by sector.
Implications.

Arts & Intersections:

Categories: Creative Economies