The Role of Nonprofit Organizations in Compensating for Market Failure

The Role of Nonprofit Organizations in Compensating for Market FailureABSTRACT This paper reviews three affable scientific accounts of the civic sectors role in society the government failure, contract failure, and unpaid failure theories. All three explain the role of nonprofit organizations as compensating for the markets failure to provide certain collective goods. This approach involves a fore misinterpretation of the underlying principles of civic sector organizations. An account is needed that explains their scrimping in damage of their normative concerns, rather than explaining normative concerns in terms of their economy. I lay a foundation for such an account by examining (1) the self-understanding among civic sector organizations that they should be mission-driven, and (2) the implications of this self-understanding for the sector as a social economy. Whereas mission-drivenness calls attention to service-provision, resource-sharing, and open communication as the norma tive core of civic sector organizations, the notion of a social economy suggests a recirculation of bullion into channels where standard economic logic no longer holds. The discover to the civic sectors role lies not in responses to market failure, but in the short-circuiting of a money-driven capitalist economy. Three trends will shape the future of fostering around the world the revolution in information technologies, the crisis of the welf ar state, and the globalisation of a consumer capitalist economy. In the face of such powerful developments on a massive scale, philosophys efforts toward educating humanity (1) can seem both forward and quixotic presumptuous, because much of philosophy has given up global theorizing of variant ... ...n producers and consumers, or among consumers.(10) Jon Van Tils Mapping the Third Sector Voluntarism in a Changing Social Economy (Washington, D.C. Foundation Center, 1988) hints at this, but a communitarian emphasis on building habits of t he heart keeps Van Til from pursuing the normative implications of voluntarism for the communication that should characterize such organizations and their relations to the humans.(11) Civic sector organizations are under tremendous pressure to bend their communicative capacities for the sake of sales, advertising, marketing, and public relations strategies whose primary objective is the promotion and preservation of the organization itself. sequence such strategies are necessary, openness suffers when communication subserves these strategies rather than these strategies themselves submitting to tests for open communication.