The economic organization of philanthropic enterprise: Essays on the entrepreneurial, organizational and fiscal facets

Over the past two decades, private nonprofit organizations have become increasingly embedded in the market economy. These developments have blurred the boundaries between nonprofits and for-profits and made economic decision-making for nonprofit organizations more complex. On the one hand, nonprofits have been urged to become more business-like in order to survive and grow. On the other hand, they are criticized for departing from the single-minded pursuit of their missions.; This dissertation examines three related aspects of the economic organization of philanthropic enterprise. The three areas of concern are the Entrepreneurial, the Organizational and the Fiscal facet. The first paper will explore the Entrepreneurial facet which concerns the creation and the establishment of philanthropic enterprises as well as the relative supplies of capital to philanthropic and profit seeking enterprises. The paper analyzes the differences between entrepreneurial behavior in a for-profit enterprise and in a nonprofit organization. The alternative view proposed in the paper is that it is in the supply of factors as capital and entrepreneurship that may be found the motivation behind the rise of nonprofit enterprises.; The organizational facet covers various topics of internal organization. These include agency costs, recruitment and board selection, all of which deal with the problems that arise in the absence of a capital market to provide discipline, incentive and information. Different models of production are presented in order to analyze differences and points in common with the nonprofit sectors and to determine whether nonprofit organizations may act in an efficient matter.; The fiscal facet concerns unrelated business taxation, as well as tax exemptions and deductions. The empirical results show that there is a tax incentive for nonprofits to engage in tax-exempt related commercial activities. However nonprofit firms have an incentive to expand an unrelated business only slowly if at all, thus it will not affect the price in the industry. Moreover if the nonprofit has substantial funds to invest, sufficient to drive down the price, it has an incentive to spread those funds across a number of markets or industries.