Dimensions of Nonprofit Entrepreneurship: An Exploratory Essay

Abstract

Little research has analyzed the motivations forcreating a nonprofit enterprise; thus, the focus here is on the factors thatmotivate entrepreneurs to create both nonprofit and charitable for-profitenterprises. To understand both the birth and death rate of new nonprofitenterprises, data from the National Center for Charitable Statistics (NCCS) areanalyzed, examining the entry and exit rates of new nonprofit firms between1992 and 1996. The limitations and advantages of the NCCS data are discussed.Theinflux of charitable for-profit firms and of for-profit social venturing isexamined in terms of the motivations of charitable for-profit entrepreneurs,the differences between charitable for-profit and nonprofit firms, and thelimitations of data for studying charitable for-profit firms.Themotivations of nonprofit entrepreneurs are inspected according to factors suchas utility maximization, charitable impulses, nondistribution constraint, theprovision of public goods, the provision of quality goods, and socialventuring. The impact of external factors, including the demand for nonprofit goods andthe changes in public policy, upon charitable nonprofit organizations isdiscussed.For instance, the impact of AFDC waivers upon nonprofitentrepreneurship is scrutinized.The funding sources of both nonprofitorganizations (grants, contributions, fees, charges) and charitable for-profitsare presented. (AKP)

Keywords: National Center for Charitable Statistics, Public good, Not-for-profit organizations, Public policies, Philanthropy, Social entrepreneurship, Social responsibilities, Startup rates, Exit rates, Motivation