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Notforprofit organizations play a critical role in the American economy. In health care, education, culture, and religion, we trust notforprofit firms to serve the interests of their donors, customers, employees, and society at large. We know that such firms don't try to maximize profits, but what do they maximize?This book attempts to answer that question, assembling leading experts on the economics of the notforprofit sector to examine the problems of the health care industry, art museums, universities, and even the medieval church. Contributors look at a number of different aspects of notforprofit operations, from the problems of fundraising, endowments, and governance to specific issues like hospital advertising.The picture that emerges is complex and surprising. In some cases, notforprofit firms appear to work extremely well: competition for workers, customers, and donors leads notforprofit organizations to function as efficiently as any forprofit firm. In other contexts, large endowments and weak governance allow elite workers to maximize their own interests, rather than those of their donors, customers, or society at large.Taken together, these papers greatly advance our knowledge of the dynamics and operations of notforprofit organizations, revealing the underexplored systems of pressures and challenges that shape their governance.
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