Who Benefits from the Nonprofit Sector?

• Author: Tiwari, Kashi Nath

Given the fixed supply of resources, a market-oriented economic system delivers far better services than a government-controlled economic system. Profits and self-interest appear to be the main driving forces in achieving the national economic goals under a market-oriented economic system. Within a private economic system, the for-profit organizations appear to be better equipped and possess a stronger driving force than the nonprofit organizations in providing all the required goods and services. If the economic system is free of government intervention, then all the needed goods and services (including the ones for which nonprofit organizations exist) will be delivered to all the market participants by the for-profit economic units; there should be no need for the existence of nonprofit organizations. To the extent that government intervenes in the free functioning of the market system, thereby unwittingly hurting the group of individuals which it intends to help, there may be some limited role for nonprofit organizations to eradicate the economic problems created by government intervention.

The papers of this volume study the functioning of a broad range of nonprofit organizations that attempt to provide essential social services. These organizations include: health services, educational institutions, religious organizations, social service establishments, arts and cultural organizations, and foundations. As the title of the book suggests, the central issue raised in these papers is: Who Benefits from the Nonprofit Sector? The papers provide lucid analyses of the benefits and the distributional effects produced by the various nonprofit organizations. The volume is the product of a conference sponsored by the Duke University's Center for the Study of Philantrophy and Voluntarism, held on November 29-30, 1990. The authors are well known academicians from the leading institutions in the U.S.

In a well documented introductory chapter, Charles Clotfeller provides a comprehensive, judicious and illuminating discussion on the distributional consequences of non-profit activities. He presents factual data on: number of nonprofit organizations, their sources of income, patterns of charitable giving by income, and distribution of contributions. The readers will learn that there were more than one million (1,285,200) nonprofit organizations in the country in 1987. He notes there are five possible roles (with associated costs and benefits) for...