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Do non-profits make a difference?

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Author Info
Pierre Koning
Joëlle Noailly ()
Sabine Visser ()

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Abstract

This CPB Document provides a framework for the evaluation of non-profit organisations. This framework addresses the question under which conditions, and, if so, in what way non-profits should be stimulated. Essentially, in order to answer these questions, three steps can be followed: (i) identifying potentially relevant market failures that non-profits may aim to diminish; (ii) linking market failures to observed performance indicators for profits and nonprofits; and (iii) use these insights to derive policy implications: should non-profits be stimulated? We apply the proposed framework to three sectors that are commonly labelled as ‘social services’: the care sector, the childcare sector and welfare-to-work services. All these sectors are subject to substantial informational problems regarding the quality of services. When surveying the literature, we find non-profit organisations only to make a difference in some specific cases. So far, there is no strong evidence that can be used as an argument to stimulate non-profit organisations in mixed markets. Moreover, such (targeted) policies may discourage donated labour and private donations, thus rendering them largely ineffective.

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Publisher Info
Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Documents with number 142.

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Date of creation: Mar 2007
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Handle: RePEc:cpb:docmnt:142

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Related research
Keywords: firm organisation non-profit organisations and public enterprise legal status

Find related papers by JEL classification:
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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References listed on IDEAS
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    Other versions:
  15. Karen Eggleston & Yu-Chu Shen & Joseph Lau & Christopher H. Schmid & Jia Chan, 2006. "Hospital Ownership and Quality of Care: What Explains the Different Results?," NBER Working Papers 12241, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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