By Dennis R. Young
Bernard B. and Eugenia A. Ramsey Professor of Private Enterprise,
Andrew Young School of Policy Studies, Georgia State University, Atlanta, Georgia, U.S.A.
Private not-for -profit organizations combine characteristics of a public sector agency with those of a private, proprietary firm. In particular, nonprofits are required to address designated social missions while breaking even financially. This structure underlies the difficulty that nonprofit organizations face in making decisions with important resource implications. Specifically, choices that would achieve maximal mission impact may differ from choices that reward the organization in purely financial terms. As a result, nonprofit managers face a variety of trade-offs between mission-responsive and financially rewarding actions. The article considers some of these trade-offs by exploring how tensions between mission and market manifest themselves in a variety of nonprofit decision making applications. The analysis is based on a set of task forces assembled by the National Center on Nonprofit Enterprise in eight areas of nonprofit decision making. The article suggests the development of metrics to reconcile mission goals with market incentives and research on appropriate nonprofit practices in areas such as pricing, employee compensation, outsourcing, collaboration, investment, fund raising and the undertaking of commercial ventures.