A Market Approach Fueling Income

January 16, 2018       The NonProfit Times      

Despite the feel-good ethos that many outsiders (and even a few insiders) associate with the nonprofit sector, the trend for many years has been a more market-oriented approach.

    In his book “The Resilient Sector Revisited,” Lester M. Salamon credits this approach for much of the growth in the sector. Further, he wrote that such an approach manifests itself in several discernible ways.

  • Growth of commercial income. This growth in income from service fees, investment earnings and sales of products reflects the success with which nonprofits took advantage of demographic trends.
  • Adaptation to the new terrain of public funding. Nonprofits have adapted well to the recent changes in the tools of action through which government assistance is reaching them.
  • Expanded venture activity. Such ventures differ from the collection of fees for nonprofit services in that they entail the creation and sale of products and services primarily for the commercial market.
  • Managerial professionalism. This means: 1. Expansion of paid staff; 2. The penetration of subject-matter professionals into leadership positions; and, 3. People trained in rational management.
  • New business partnerships. Old suspicions between the nonprofit and business sectors have softened, opening the way for nonprofit acceptance of the business community not just as a source of charitable support but as a legitimate partner for a wide range of nonprofit endeavors.