| Original language | English (US) |
|---|---|
| Title of host publication | The New Palgrave Dictionary of Economics |
| Editors | Steven Durlauf, Lawrence E Blume |
| Publisher | Palgrave-Macmillan |
| Edition | 2 |
| ISBN (Electronic) | 978-1-349-58802-2 |
| ISBN (Print) | 978-0-333-78676-5 |
| State | Published - 2008 |
Abstract
Non-profit organizations are hybrids – private but with restricted ownership rights. This defining ‘nondistribution constraint’ reduces incentives to exploit underinformed customers and allows non-profits to depart from profit-maximizing behaviour, although costly enforcement of this constraint limits effectiveness. Non-profits' GDP share in the United States is about 30 per cent of the governmental non-defence share. Worldwide they employ about four per cent of the labour force. Non-profits receive public subsidies potentially justifiable by their provision of public goods. Sales of goods and services constitute the main source of non-profit revenues, but government grants and private donations are also important. Extensive research on the economic behaviour of non-profit, for-profit, and governmental organizations in mixed industries has disclosed systematic differences.