Rational Nonprofit Entrepreneurship
This paper models nonprofit entrepreneurship as the equilibrium outcome of a multistage game among individuals who would like a public good to be provided.. The model predicts that if individuals will voluntarily contribute towards provision of the public good, then it is in the private interest of the entrepreneur to impose a non-distribution constraint on himself by founding a nonprofit firm. This decision also improves the allocation of resources, in the sense that it results in greater voluntary contributions than if the firm that provides the public good is proprietary.
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- Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
- Rose-Ackerman, Susan, 1987. "Ideals versus Dollars: Donors, Charity Managers, and Government Grants," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 810-823, August.
- Sugden, Robert, 1982. "On the Economics of Philanthropy," Economic Journal, Royal Economic Society, vol. 92(366), pages 341-350, June.