The Organizational Foundations of the Nonprofit Sector

The nonprofit sector is a recent invention, arising mainly in the latter half of the twentieth century. There are some historical precursors, such as religious activity and civil society, but these fail to directly capture contemporary meanings of the term “nonprofit sector”. The editors of this volume define the nonprofit sector as “voluntary (and organized) action that is not aimed at generating profit” (Child & Witesman, this volume, page TBD): Appropriately, the organized nature of the sector is explicitly called out. In this chapter we argue that “organization” is a constitutive feature of the nonprofit sector. What makes the sector distinct from earlier manifestations of prosocial activity is its dependence on formal organization and organizing. By embedding the emergence of the nonprofit sector within the evolution and institutionalization of organization as a central feature of modern society, our chapter provides new insight into core questions about the sector, such as how to explain blurring between boundaries of business, government, and nonprofit domains, and how to explain variation in the size of the nonprofit sector over time and around the world…