Being Nonprofit-Like in a Market Economy

Abstract

Nonprofit organizations experience a tension between pursuing their social missions and meeting the demands of a market economy. This mission-market tension is an everyday, practical concern for nonprofit practitioners. Yet, scholars know very little about how nonprofit practitioners define and manage this tension. Drawing on contradiction-centered perspectives of organizing, data from an ethnographic study of a single U.S. nonprofit organization demonstrate that the mission-market tension was defined and managed by organizational members as both a contradictory and interconnected phenomenon. This framing was enabled by specific communication practices that supported a productive and generative relationship between these seemingly incompatible goals. Findings suggest that the mission-market tension is an inherent condition of nonprofit organizing and highlight the central role of communication in successfully managing mission and market concerns.

Examining the Extent and Coherence of Nonprofit Hybridization Toward the Market in a Post-corporatist Welfare State

“…This phenomenon can manifest itself in different forms on different organizational levels (Dart, 2004a). NPOs can develop activities generating earned revenue through the sale of organizational services and products (e.g., McKay et al, 2015), populate the board with corporate professionals (e.g., Vidovich & Currie, 2012), employ marketing techniques in their stakeholder communication (e.g., Powell & Osborne, 2020), engage in venture philanthropy schemes (e.g., Letts et al, 1997), participate in social impact bonds (e.g., Del Giudice & Migliavacca, 2019), partner in cause-related marketing (e.g., Boenigk & Schuchardt, 2015), adopt a "business-like" discourse (e.g., Sanders, 2015), introduce corporate management tools to guide their day-to-day functioning (e.g., Hvenmark, 2013), and so forth.…”

“…Other studies, in turn, embrace the phenomenon of NPOs hybridizing toward the market domain as coherent and plural in meaning, but tend to be limited by the number of cases they examine (e.g., Cooney, 2006). These small-N studies tend to position the term "NPOs becoming business-like" as the overarching concept in this debate (e.g., King, 2017;Sanders, 2015), thereby essentially assuming that the observed coherence between these different hybrid manifestations in their cases is-to a certain extent-generalizable to other NPOs. In similar vein, Maier and Meyer (2009, p. 15) theorize that the use of corporate management practices (i.e., "business-like form") is likely to induce a monetary reflex in NPOs (i.e., "business-like substance").…”

Nonprofit organizations in between the nonprofit and market spheres: Shifting goals, governance and management?

“…Therefore, paradoxically, imitating for-profit enterprises might contribute to nonprofit organizational functioning in perception, rather than in practice. This view is supported by the observation that NPOs adopt coping strategies such as strategic decoupling (Arvidson & Lyon, 2014), redefining market discourses by assigning social meaning to them (Sanders, Harper, & Richardson, 2015;Sanders & McClellan, 2014;Sanders, 2015) and tactical mimicry (Dey & Teasdale, 2016). In particular, Dey and Teasdale (2016) provide a case in point by describing how an UK-based NPO consciously pretended to be a social enterprise vis-à-vis external stakeholders in order to gain access to public funding (allowing them to further their social goals), while avoiding the potential perils associated with social entrepreneurship.…”

Beyond Socially Responsible Investing: Effects of Mission-Driven Portfolio Selection

“…Today, asset allocation and grant distribution are not seen delinked anymore. In contrast, entering the market economy creates mission-market tensions [9].…”