The Nature of the Nonprofit Sector

The Nature of the Nonprofit Sector

The Nature of the Nonprofit Sector

The Nature of the Nonprofit Sector


Discussing everything from Andrew Carnegie's turn-of-the-century philosophy of philanthropy, to the most recent writings by current scholars, this collection of writings on the nonprofit sector in the US contains articles, chapters and essays.


To say that nonprofit organizations share certain common characteristics and a common rationale is not, of course, to suggest that all nonprofit organizations are identical. To the contrary, the complexity and diversity of this sector is one of the major factors that has diverted attention from it over much of its history. Indeed, nonprofit organizations are so diverse and so specialized that some observers question whether it is appropriate to consider this group of institutions a "sector" at all--a point that could be raised about the "business sector" as well, of course.

Complicating things further is the fact that significant portions of the nonprofit sector are largely informal in character and therefore difficult to capture in empirical terms. This reflects the fact that under American law organizations are not required to incorporate, or even to seek formal recognition by the tax authorities, in order to function as tax-exempt nonprofit organizations. This organizational fluidity is, in fact, one of the prized features of this sector, enabling groups of people to meet together to pursue common purposes without having to seek official approval or even acknowledgment. At the same time, however, it makes it exceedingly difficult to gauge the size of this sector with any real precision.

While recognizing these problems, this chapter seeks to make some sense of the vast array of institutions that comprise the American nonprofit sector, to examine the basic anatomy or architecture of this sector and the scope and scale of some of its constituent parts. In the process, it seeks to strip away some of the confusion and misperception that too often characterize popular understanding of what the nonprofit sector really is and how it functions in American life.

To do so, we first examine the overall scale of this sector and then look in more detail at some of the sector's major components, focusing particularly on what we refer to as "public-benefit service organizations," the portion of this sector that most people have in mind when they refer to the "nonprofit sector." Given the limitations of available data, our focus is inevitably on the more formal and institutionalized organizations, although, as we will see, the line between these and the rest of this sector is far from clear.

Overview: Basic Dimensions

The nonprofit sector is not only a quite important, but also a quite sizable, presence in American society:

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