Handbook of Research on Nonprofit Economics and Management
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Handbook of Research on Nonprofit Economics and Management

Second Edition

Edited by Bruce A. Seaman and Dennis R. Young

Building on the success of the first edition, this thoroughly revised and expanded edition explores (1) areas of general agreement from previous research; (2) areas of conflicting results and unexplored questions; (3) the relative roles of theory, data availability and empirical analysis in explaining gaps in our knowledge; and (4) what must be done to improve our knowledge and extend the literature. Selected original chapters addressing especially challenging topics include the value of risk management to nonprofit decision-making; nonprofit wages theory and evidence; the valuation of volunteer labor; property tax exemption for nonprofits; when is competition good for the third sector; and product diversification and social enterprise; international perspectives; the application of experimental research and the macroeconomic effects of the nonprofit sector.
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Chapter 15: Franchises and federations: the economics of multi-site nonprofit organizations

Dennis R. Young and Lewis Faulk

Abstract

This chapter examines the economic and organizational factors underlying the formation, structure and functioning of multi-site nonprofit organizations. We characterize such organizations as associations in which the members are themselves organizations rather than individuals. Multi-site nonprofits are manifested in various forms including federations, franchises, membership associations, systems, leagues, decentralized corporations, and networks. Such organizational structures are seen as mechanisms for nonprofits to achieve efficient scale in promulgating their missions and services. Various growth scenarios are considered including expansion, imitation and affiliation, and agglomeration and networking of single cell organizations over time. The particular structures that these organizations assume are determined by a variety of factors including economies of scale and scope, transactions costs, principal–agent considerations, and inter-organizational externalities. In light of new technologies, the study of inter-organizational networks is seen as an important frontier of research on multi-site nonprofit organizations.

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