Politics and the Origins of the Nonprofit Corporation in Massachusetts and New Hampshire, 1780-1820

Abstract

This article explores the origins of the nonprofit corporation following American independence. Corporations had long been considered state agencies responsible to and under the control of state leaders. Both Federalists and Republicans believed that corporate trustees were political officeholders. Only in the face of intense partisan and religious conflict did they change their minds. By examining debates over the legal status of colleges and churches, this article explains how party politics and religious pluralism convinced leaders in Massachusetts and New Hampshire to distinguish between nonprofit corporations and the state. These debates culminated in the United States Supreme Court case of Dartmouth College v. Woodward. The court ruled that private corporations were protected from state control. The decision provided the legal foundation for the subsequent development of the nonprofit corporation and civil society in the United States.

The Political Embeddedness of Voluntary Action: The Case of Local Philanthropic COVID-19 Relief Funds

“…We hypothesized that in the face of political competition, nonprofits may serve as a means of moderating political conflict by allowing interest groups to retain control over institutions (Hall, 1987;Neem, 2003). Alternatively, one might posit that high levels of political competition may lead to more moderate political positioning in a community.…”

“…If political competition does not lead to compromise, an alternative explanation, more aligned with historical perspectives of control and contestation (Hall, 1987;Neem, 2003), is that CPOs, and other nonprofits, may serve as collective action structures that allow in-groups to form across party identities. Associations, such as CPOs, recruit and attract likeminded individuals through social networks (McPherson et al, 2001), allowing CPOs to be internally homogenous within a politically polarized community.…”

“…Specifically, nonprofit historians have described how political competition early in the U.S. republic drove the development of a robust civil society (Hall, 1987;Neem, 2003). Voluntary control ensured that if government leadership were to shift to the "other party," as was more likely in a competitive political environment, that "losing" interests would be protected.…”

“…Voluntary control ensured that if government leadership were to shift to the “other party,” as was more likely in a competitive political environment, that “losing” interests would be protected. Neem (2003) argued that as political competition between Federalists and Republicans increased, leaders of each party feared the other’s control over elite institutions and were eager to move governance of civic institutions to the “voluntary sector.” Political competition may also expose disagreements over problem definitions and identification of potential solutions, discouraging government response and facilitating the emergence of voluntary action. Both perspectives suggest that, in the face of elevated levels of political competition, government fails to reach consensus and the nonprofit sector becomes the preferred mechanism for action.…”

Book Review: Neem, J. N. (2008). Creating a nation of joiners: Democracy and civil society in early national Massachusetts. Cambridge, MA: Harvard University Press. 259 pp. $49.95 (hardcover)

“…Some readers of NVSQ will doubtless be familiar with part of Neem's argument, as one portion was published in 2003 (Neem, 2003).…”