Commercial Venturing and the Transformation of America's Voluntary Social Welfare Agencies

Abstract

This article examines venturing, or the commercial sale of services and products, as a strategy employed by voluntary social agencies to bolster their faltering budgets. It reports the findings of a descriptive study of a population of 101 such agencies in greater Philadelphia. The authors suggest that the increase in commercial ventures by nonprofits is to some extent a by-product of the expansion of government contracting in the social welfare field. They conclude that even when successful, commercial ventures pose significant risks to nonprofit agencies.

The Adoption of the Corporate Governance Model by Nonprofit Organizations

“…First, they are consistent with the prescriptive recommendations of others who write on the advisability of commercial venturing by nonpro fit org anizations (for example, Adams and Perlmutter, 1991). Adams and Perlmutter (1991, p. 34) suggest that to "balance the cro s s -c u t t i n g f o rces created by commercialism in a nonpro fit agency, the org a n i z ation needs a minimum size as well as economic and political stability.…”

“…Consequently, executives and board members of larg e hospitals may hold more cosmopolitan outlooks, identify more re a dily with leaders of other large corporations, and exhibit greater willingness to adopt organizational arrangements found in the commerc i a l sector (DiMaggio and Powell, 1984;Gouldner, 1957). Furt h e r, because they often resemble large corporations in their scale and comp l e x i t y, large nonpro fit organizations may also find it easier to attract b o a rd members with the business, legal, and financial skills re q u i re d by the corporate governance model (Adams and Perlmutter, 1991). …”

Diversifying revenue sources in Canada: Are women's voluntary organizations different?

“…In order to make these commercial ventures successful, voluntary organizations require the business expertise within the staff or on the board to manage these activities. DiMaggio (1986b) and Adams and Perlmutter (1991) both note the increased number of members with finance and marketing backgrounds on boards, replacing those with traditional social service backgrounds. This fits with the emphasis in nongendered organizations on marketing, working with the private sector, and recruiting board members with business expertise.…”

Work Integration Social Enterprises in the United States: Operating at the Nexus of Public Policy, Markets, and Community

“…As the trend grew in popularity throughout the 1990s, the rhetorical characterizations of these WISE market based activities as sustainable sources of revenues for their nonprofit parent organizations echoed the emphasis in the U.S. welfare reform on personal responsibility and the reduction of dependency on social sector supports. In this way, in an era of a shrinking welfare state, WISE commercial activity reflects a reality that for nonprofit organizations, like the disadvantaged workers they aim to serve, survival and growth increasingly depends on their success in generating sustainable revenue streams, including from market based activities (Adams and Perlmutter 1991;Young 1998;Cooney 2007).…”