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

Edited by Bruce A. Seaman and Dennis R. Young

Nonprofit organizations are arguably the fastest growing and most dynamic part of modern market economies in democratic countries. This Handbook explores the frontiers of knowledge at the intersection of economics and the management of these entities. The authors review the role, structure and behavior of private, nonprofit organizations as economic units and their participation in markets and systems of public service delivery, assess the implications of this knowledge for the efficient management of nonprofit organizations and the formulation of effective public policy, and identify cutting edge questions for future research.
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Chapter 1: Income Diversification

Cyril F. Chang and Howard P. Tuckman


Cyril F. Chang and Howard P. Tuckman Introduction Lane et al. (1994) provide evidence that the current tradition of philanthropy is rich and deep, with up to 70 percent of the population of many Western and developed countries making regular contributions. Where are the roots of this tradition? Robbins (2006), in an impressive historical summary of traditions of philanthropy in the West, traces this tradition back to ancient Jewish life, and Greek philanthropy as a cultural phenomenon that shaped sociology and politics of ‘fractious communities, Roman philanthropy as an obligation of civilized people, and the development of Christianity’. These roots ‘profoundly influenced the motives of philanthropists, the formation of voluntary associations and the ethos of self-sacrifice’ (p. 19). Robbins’ provocative analysis concludes that ‘many nonprofits survive . . . because of the compulsions toward external or communal service experienced by private donors and . . . that donor motives are usually . . . plural in nature’ (p. 28). Interestingly, diversification of ‘revenue’ sources took many forms, even in ancient Israel. Ancient gifts involved alms to the poor, shared meals, gleanings from landowners, special tithes for the poor, leavings from untended fields, and donors putting charitable contributions in secret chambers in the Temple, including money and other assets of value. Similar forms of diverse charitable gifts can be found in other early cultures as well. Monetary funds were important, but so too was diversification, which insured that need for charitable funds would not fall on a single revenue source (Robbins, 2006). In fact, monetary support is, and has always...

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