Do non-profits make a difference? Evaluating non-profit vis-Ã -vis for-profit organisations in social services
AbstractThis 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 non-profits; 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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Bibliographic InfoPaper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Document with number 142.
Date of creation: Mar 2007
Date of revision:
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-09 (All new papers)
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