The Unsung Role of Nonprofit Organizations in Creating Economic and Social Value: A Stakeholder Theory Perspective

Abstract

Why do non-profit organizations exist? Prior research largely assumes that non-profit organizations’ primary goal is to create social value, while corporations are viewed as the sole creators of economic value. This dichotomy has overshadowed and narrowed scholarly understanding of the role that non-profit organizations can play in the value creation process. Drawing on an eight-year longitudinal case study of an Italian non-profit organization (NPO), we found that the nonprofit organization emerges as a central economic value-creating actor, not merely a beneficiary or implementer. Our findings reveal a process model in which the NPO leverages technological capabilities to create economic value for firms while simultaneously generating social value for society. At the center of this model is the concept of tech-resonance capability, which enables non-profit organizations to mitigate firms’ negative externalities through technology, thereby producing integrated economic and social outcomes. In doing so, we contribute to stakeholder theory by re-centering non-profit organizations as central actors in economic value creation, rather than as peripheral social value providers. We conclude with practical implications for how organizations can develop such capabilities to foster shared value creation.