Abstract

http://ssrn.com/abstract=1083806
 
 

References (43)



 
 

Citations (1)



 


 



Mission-Market Tensions and Nonprofit Pricing


Taehyun Jung


Georgia State University - Andrew Young School of Policy Studies; Georgia Institute of Technology - School of Public Policy

Dennis Young


Georgia State University - Andrew Young School of Policy Studies

January 2008

Andrew Young School of Policy Studies Research Paper Series No. 08-03

Abstract:     
Private not-for-profit organizations combine characteristics of a public sector agency with those of a private, proprietary firm. In particular, nonprofits are required to address designated social missions while breaking even financially. This structure underlies the difficulty that nonprofit organizations face in making decisions with important resource implications. Specifically, choices that would achieve maximal mission impact may differ from choices that reward the organization in purely financial terms. As a result, nonprofit managers face a variety of trade-offs between mission responsive and financially rewarding actions. This paper considers some of these tradeoffs in the context of pricing decisions by nonprofit organizations. In particular, the paper draws on alternative theories of nonprofit pricing from the literature. In one theory, nonprofits are viewed as revenue maximizers, pricing their services to garner as much net revenue as possible to support their organizations. In an alternative theory, nonprofits are conceived as mission maximizers, pricing their services to achieve maximum mission impact within the constraint of financial solvency. The efficacy of these theories is explored through five case studies of organizations offering a variety of services within the context of a local social services federation. Evidence from these cases suggests that the forgoing theories apply in some combination for any given nonprofit organization. Several different behavioral patterns are found, including nonprofits seeking to balance financial and mission impacts in the pricing policies for each of their service offerings and others pursuing a strategic mix of pricing policies for profitable and mission-impacting services. It is clear from all cases observed that nonprofit managers struggle with mission-market tensions as they relate to pricing and that they can benefit from metrics to help them sort through these decisions in ways that resolve these tensions.

Number of Pages in PDF File: 44

working papers series


Download This Paper

Date posted: January 14, 2008  

Suggested Citation

Jung, Taehyun and Young, Dennis, Mission-Market Tensions and Nonprofit Pricing (January 2008). Andrew Young School of Policy Studies Research Paper Series No. 08-03. Available at SSRN: http://ssrn.com/abstract=1083806 or http://dx.doi.org/10.2139/ssrn.1083806

Contact Information

Taehyun Jung (Contact Author)
Georgia State University - Andrew Young School of Policy Studies ( email )
Andrew Young School of Policy Studies
Atlanta, GA 30303-3083
United States
404-413-0126 (Phone)
Georgia Institute of Technology - School of Public Policy ( email )
685 Cherry St.
Atlanta, GA 30332-0345
United States
Dennis Young
Georgia State University - Andrew Young School of Policy Studies ( email )
35 Broad Street
Atlanta, GA 30302
United States
Feedback to SSRN


Paper statistics
Abstract Views: 919
Downloads: 239
Download Rank: 70,177
References:  43
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.391 seconds