Commercialization: An Option for Sustaining the Nonprofit Sector in Developing Countries
International Journal of Economic Behavior and Organization
Volume 2, Issue 5, October 2014, Pages: 69-77
Received: Sep. 21, 2014; Accepted: Sep. 30, 2014; Published: Oct. 10, 2014
Views 2830      Downloads 220
Balgah Roland Azibo, College of Technology, University of Bamenda, Bambili, Cameroon; Research Fellow, Bamenda University of Science and Technology, P.O. Box 277 Nkwen Bamenda, Cameroon
Article Tools
Follow on us
The importance of the nonprofit sector in enhancing sustainable development especially in developing countries where states and markets often fail is generally recognized in the literature on organizational behavior and development. The rapid growth observed in this sector has been accompanied by increasing volatility of charity and philanthropy, perverse global shocks and institutional arrangements. These factors threaten the financial sustainability of the nonprofit sector as well as its constant contribution to sustainable development especially in developing countries. This paper proposes an extension of the concept of nonprofit commercialization to developing countries, which until now has claimed significant importance only in the developed countries nonprofit literature. The key hypothesis developed in this paper is that commercialization of nonprofit organizations in developing countries can significantly reduce the risk of financial insolvency, enhance organizational sustainability and long term contribution to sustainable development. The importance of nonprofit organizations and rationale for commercialization of third sector organizations in developing countries is presented. The pros and cons for nonprofit commercialization are intensively discussed before proceeding to some of the key motivating factors for nonprofit commercialization. An empirical example is briefly presented to support this theoretical position. The paper concludes with implications of concept application for research, development and sustainability of the nonprofit sector in developing countries.
Commercialization, Nonprofit Organizations, Developing Countries, Sustainability
To cite this article
Balgah Roland Azibo, Commercialization: An Option for Sustaining the Nonprofit Sector in Developing Countries, International Journal of Economic Behavior and Organization. Vol. 2, No. 5, 2014, pp. 69-77. doi: 10.11648/j.ijebo.20140205.11
H. Hansmann, The role of nonprofit enterprise, Yale Law J. 89(5), pp 835-901, 1980
A. Ben-Ner, “Nonprofit organizations: why do they exist in market economies?” In Rose-Ackermann, S Ed. The Economics of nonprofit Institutions: Studies in structure and policy. Oxford: Oxford University Press, pp. 94-113, 1986.
S. Rose-Ackermann, “Altruism, nonprofits, and economic theory.” J. Econ. Lit.34, pp 701-728, 1996.
B.A. Weisbrod, “Nonprofit Mission and its Financing: Growing Links between Nonprofits and the rest of the Economy”. In Weisbrod, B.A. ed. To profit or Not to Profit, UK: Cambridge University Press, pp.1-24, 1998.
R. Steinberg, “Economic theories of nonprofit organizations”. In Powel, W.W. and Steinberg, R. (Eds), The Nonprofit Sector: A Research Handbook, 2nd ed., Yale University Press, New Haven, pp. 117-139, 2006.
M. Jegers. “Managerial Economics of Nonprofit Organizations”, Routledge: London et al., 2008.
V. Valentinov. “The economics of nonprofit organization: in search of an integrative theory”. J. Econ. Issues, Vol. 62 (3) pp 745- 759, 2008.
J. Kydd, and A. Dorward. “Implications of market and coordination failures for rural development in least developed countries” J. Int Dev 16, pp 951-970, 2004.
C. Pandya. “Private Authority and Disaster Relief. The cases of Post-Tsunami Aceh and Nias” Crit Asian Stud. 38(2), pp 298-308, 2006.
C. Lliopoulos, and V. Valentinov, “Toward an economics of the rural third sector”. Int. J. of Agric. Res, Gov. and Ecol 8(5/6), pp 439-456, 2009.
R.A. Balgah and G. Buchenrieder. “Targeting of and outreach to the poor by rural development nonprofit organizations in Cameroon”. Res. Dev. Econ. Pol. Discussion Paper No.1/2010, Stuttgart: Grauer Verlag, 2010.
R.A.Balgah, V. Valentinov, and G. Buchenrieder. “Nonprofit extension in rural Cameroon: a study of demand and supply determinants”. Int. J. Soc.l Econ.37(5), pp 391-399,2010.
T.R. Davies. “The rise and fall of transnational civil society: the evolution of international non-governmental organizations since 1839”. CUTP Working paper No. 003. 2008.
A. Dreher, P. Nunnenkamp, S. Thiel and R. Thiele.“Aid Allocation by German NGOs: Does the Degree of Public Refinancing matter?” CEGE Discussion Paper No. 92, 2010.
C. I Irungu,. and , M. Zeller “On Targeting and Outreach of NGDO Safety Net Programmes: Evidence from Rural Kenya”. Conference on International Agricultural Research for Development, Deutscher Tropentag, Witzenhausen, 2002.
J-C Carcia-Zamor. A Theoretical Guide to define Transparency and Accountability in Public Organizations, Glob Adv Res J Soc Sci1(7), pp 142-151, 2012.
J. Crespin. “Aiding local action: the constraints faced by donor agencies in supporting effective, pro-poor initiatives on the ground”. Environ. Urban. 18, pp 433-449, 2006.
C.J. De Vita, C. Fleming, and E.C Twombly. “Building Nonprofit Capacity. A Framework for Addressing the Problem”. In De Vita, C.J. and Fleming, C. (Eds), Building Capacity in Nonprofit Organizations. Washington DC: The Urban Institute, pp 5-30, 2001.
J.E. Austin. “Strategic Collaboration Between Nonprofits and Business”. Nonprof. Volunt. Sect. Quart. 29(1), pp 69-97, 2000.
D. Ashman. “Strengthening North-South Partnerships for Sustainable Development”. Nonprof. Volunt. Sect. Quart. 30(1), pp 74-98, 2001.
Z. Teka, and V. Magez, “Global financial crises and donor funding implications: should NGO beneficiaries be concerned?” AIDs Foundation of South Africa, 2008.
GHA. Report., Global Humanitarian Assistance, 2009, accessed on December 20th 2013
W. Forster and J. Bradach. “Should Nonprofits Seek Profits?” Bav. Busin. Rev. 2,pp 1-9, 2005.
L. Moeller, and V. Valentinov. “The Commercialization of the Nonprofit Sector. A General Systems Theory prespective” Syst. Pract Act. Res. 2012, pp 365-370, 2012.
H.P. Tuckmann. “Competition, commercialization, and the Evolution of Nonprofit Organizational Structures”. In Weisbrod, B.A. ed. To profit or Not to Profit, UK: Cambridge University Press, pp.25-45, 1998.
R. Dart. “Being "Business Like" in a Nonprofit Organization: A Grounded and Inductive Typology”. Nonprof. Volunt. Sect. Quart. 33(2), pp 290-310, 2004.
A.M. Eikenberry and J.D. Kluver. “The Marketization of the Nonprofit Sector: Civil Society at Risk?” Pub. Adm. Rev. 64(2), pp 132-140, 2004.
V. Valentinov. Managerial nonpecuniary preferences in the market failure theories of nonprofit organization, Int. J. Soc. Econ. 36 (1/2), pp 81-92, 2009.
P. DiMaggio and H. Anheier “The sociology of nonprofit organizations and sectors”. Ann. Rev. Soc. 16: 137-159, 1990.
J. Estelle. “Whither the third sector? Yesterday, today and tomorrow”. Voluntas: Int. J. Volunt. Nonpr. Org. 8(1), pp 1-10, 1997
L.M.E.. Goodlad. "Making the working man like me. Charity, Pastorship and themiddle-class identity in nineteenth-century Britain” Vict. Stud. 42(2), pp 591-617, 2001
D.C. Minkoff, and W.W.Powell. “Nonprofit Mission: constancy, responsiveness, or deflection?” In: Powell S. ed The Nonprofit Sector: A Research Handbook, 2nd Ed. Yale University Press, New Haven, pp 591-6112006.
A. Slivinski. “Team Incentives and Organizational Form” J. Pub. Econ. Theo. 4, pp 185-206, 2002.
W.M. Rohe, R.G. Quercia, D.K. Levy and P. Biswas, “Sustainable Nonprofit Housing Development. An Analysis of the Maxwell Award Winners”. Washington D.C., Fannie Mae Foundation, 1998.
J.J. Havens. “Do the poor pay more? Is the U-shaped curve correct?” Nonpr. Volunt. Quart. 24(1), pp 79-90, 1995.
C.M. Lewis, and K.C. Murdock, “The Role of Government Contracts in Discretionary Reinsurance Markets for Natural Disasters”. J. Risk Insur. 63 (4), pp 567- 597, I996.
R. Holzmann and S. Jorgensen. “Social Risk Management: A new conceptual framework for Social Protection and Beyond” Social Protection Discussion paper No. 0006, World Bank, 2000.
Munich Re “Topics: Natural catastrophes. Annual Review of Natural Catastrophes” 1997, Munich: Munich Re, 1998.
E. Cavallo and I. Noy. “The Economics of Natural Disasters. A Survey”. RES Working Paper No. 09-19, 2009.
OECD/DAC. “Paris Declaration on Aid Effectiveness: Ownership, Harmonization, Alignment, Results and Mutual Accountability”. OECD/DAC High Level Forum, Paris, 2005.
OECD. “The Paris declaration on Aid Effectiveness and the Accra Agenda for Action”. Paris, OECD, 2008.
T. Suzuki. “From Sector Wide approach to General Budget Support: The Impact of Political Shift in the Education Sector in Zambia”. J. lnt. Coop. Stud. 17(1), pp 79-99, 2009.
C. Gaynor. “The Paris declaration on aid effectiveness and gender equality. New York: Department of Economic and Social Affairs, United Nations, Global Humanitarian Assistance Report 2009. Humanitarian assistance through NGOs.Development Initiatives (accessed on 13.06.2012), 2007.
H. Hansmann, “Economic theories of nonprofit organization”. In Powell, W.W. Ed. The Nonprofit Sector: A Research Handbook, New Haven: Yale University Press, pp. 27-42,1987
OECD/DAC. “Evaluation of General Budget Support: Synthesis Report”. DAC Network on Development Evaluation, Paris, OECD, 2006.
A. McCarty and A. Julian. “The development effectiveness of Untied Aid: Evaluation of the implementation of the Paris declaration and of the 2001 DAC recommendation on untying ODA to LDCs. LAO PDR Country study”. Mekong Economics Ltd, 2009.
UNDP. “Main Model United nations Conference 2010. United Nations Development Program Background Guide”, New York, UNDP, 2009.
R.E Brummett, J. Lazard, and J. Moehl. “African Aquaculture: Realizing the potential”. Food Poli. 33(5), pp 371-385, 2008.
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
Tel: (001)347-983-5186