Nmp 650- core course nmp 600

ANALYTICAL FRAMEWORKS THAT INCLUDE THEORIES AND MODELS

FOR NMP 600- FOUNDATIONS OF NONPROFIT MANAGEMENT.

BY: ANGELA MCINTYRE

NMP 650- LEADING CHANGE FOR NONPROFIT ORGANIZATION

PROFESSOR JEFF GREIM

NOVEMBER 6, 2013

THEORIES:ECONOMIC THEORIES

VS NON- ECONOMIC

THEORIES

List of the Economic Theories:

Public Goods TheoryMarket Failure TheoryMarket Failure and High Transition Cost TheoryExternality TheoryContact Failure Theory Subsidy Theory Consumer Control Theory

Source: Grobman, Gary. M. (1999). An Introduction to the Nonprofit Sector: A Practical Approach for the 21st Century. 3rd Edition. White Hat Communications: Harrisburg

Public Goods Theory:Nonprofit organizations are put together due to government failure.

Governments are unable to obtain enough public goods due to the “structure of the democratic process”(p.53).

For example: Leukemia and Lymphoma Society gather private donations and put together fundraisers to pay for research to find a cure for blood cancers.

Source: Grobman, Gary. M. (1999). An Introduction to the Nonprofit Sector: A Practical Approach for the 21st Century. 3rd Edition. White Hat Communications: HarrisburgLeukemia and Lymphoma Society. (2013). Fighting Blood Cancers. Retrieved from http://www.lls.org on November 4, 2013.

Market Failure Theory: This theory means that nonprofit organizations could form due to

market failure.

Market failure can occur if a good or service is too low for a for profit business and would benefit a nonprofit organization more because they can have private donations and tax exemptions.

For Example: Wayne ARC a nonprofit organization for indivudals with disabilities has a transportation service that indivudals with disabilities can utilize with a low fee per year paid by the indivudals with disabilities and Wayne ARC receives funding through grants to pay for the service. Where if a for profit business tried to run this service they would not be able to manage the cost because the for profit would not have tax exempt or funding through private donations or grants.


Externality Theory:

Externalities occur whenever the actions such as “costs and benefits of a market transaction accrues” to make a situation worse or better (P.56).

For Example:

An area in downtown Rochester, NY has started to become a violent area to live. This area is not safe for families to live in these days.

The negative externalities might be increased health care cost in this area, decrease in property values with real estate, and decrease in safety in the neighborhood.

The positive externalities would be financial support given to the community to make a safer location for indivudals to live, nonprofit programs and organizations can be started to help at risk youth not become involved in violent behavior, and this area could start a nonprofit program that can help keep the neighbor hood safe such as a neighborhood watch nonprofit organization.


The Violence

Contract Failure Theory: This theory is where indivudals can’t evaluate the quality or

quantity of a service or program. Nonprofit organizations will be chosen by the indivudals to fulfill the service rather than a for profit business. For Example: Linda wants to loose weight. She can go to a for

profit organization to help her loose weight that will cost her a lot of money or she can go to a nonprofit organization that can help her with choosing healthy foods, help her prepare foods, and help her budget to get health food. Where the for profit business would only be able to give her advice or medication to loose weight. There is more opportunities at the nonprofit then the for profit.


Subsidy Theory:•This theory shows that there is an “initiations of nonprofits in some fields is encouraged because of the government subsidies that are available” (p. 58).•These subsidies are “government funding for services, tax exempt, lower rates for postage, are able to issue tax-exempt bonds, and have personnel regulations”(p.58).


CONSUMER

CONTR

OL

CONSUMER

CONTR

OL

THEO

RY:

THEO

RY:

This

theo

ry s

hows

how “

soc

ial c

lubs

and

coop

erat

ives

form

non

profit o

rgan

izat

ions

rath

er th

an fo

r pro

fits”

busines

ses

(p.

58).

Source: Grobman, Gary. M. (1999). An Introduction to the Nonprofit Sector: A Practical Approach for the 21st Century.3rd Edition. White Hat Communications: Harrisburg

Non- Economic Theories:

•Pluralistic Theory•Mediating Structures Theory•Theory of the Commons


Pluralistic Theory:This theory states “ government does have the political support to begin providing a collective good” (p. 59).

For Example: This is where the government starts a program to help indivudals stop smoking. Nonprofit organizations also can help provide the service to help indivudals quit smoking by receiving funding from the government.


Mediating Structures Theory:

This theory is where mediating structures “help shape cultural values in a positive way and receives encouragement from government public policy” (p. 60).

Mediating structures are “families, community, voluntary associations, and institutions”(p.60).


Theory of Commons:

This theory is where the communities design and create social worlds.

The common goods that are created include “religious worship, contemplation, scientific inquiry, helping and charity, expression through art, play and other projects that’s are done by voluntary action groups” (p. 60).

This theory also explains that what is produced by the theory of commons is to “benefit individuals or groups other than the producer” (p. 61).


Models Used in NMP 600:

• Weisbrod Model

•Market Failure and High Transaction Costs Model


Weisbrod Model:

This model shows how there is an existence of the nonprofit sector due to government failure.

The Public Goods Theory goes under the Weisbrod Model.


Market Failure and High Transaction Costs Model:

This is the model where there is a market failure and the government is not taken over the function of collective goods (p. 55).

This could be a lack of government not wanting to be involved, government taking a long time to solve an issue, and the cost of government acting quickly to issues could cause indivudals to have to pay higher taxes for services (p.55). This is where nonprofits come in to help with this issue to find services to fix problems quick.Source: Grobman, Gary. M. (1999). An Introduction to the Nonprofit Sector: A Practical Approach for the 21st Century. 3rd Edition. White Hat Communications: Harrisburg

Primary Learning Objectives:#1: Articulate an understanding of the history, theory, scope, unique role, and significance of philanthropy, voluntarism, and nonprofit sector organizations within the North American and global context.

#6: Apply appropriate analytic methods to management problems in a nonprofit organizational context and design solutions to problems.

#7: Analyze, design, implement, maintain, and evaluate problems/solutions in the key nonprofit functional areas including fundraising, planning, financial management, board governance, volunteer management, and information management.


ANY QUESTIONS?

Turnitin Statement:

“I submit that this paper is entirely my own work and agree that it may be submitted to Turnitin for the purpose of checking for plagiarism and further that it may be maintained on the Turnitin database in order to check for future plagiarism”.

Reference Page :

Grobman, Gary. M. (1999). An Introduction to the Nonprofit Sector: A Practical Approach for the 21st Century. 3rd Edition. White Hat Communications: Harrisburg

Leukemia and Lymphoma Society. (2013). Fighting Blood Cancers. Retrieved from http://www.lls.org on November 4, 2013.

Technology

Nmp 650- core course nmp 600