The Goods Produced By Nonprofit Organizations

Abstract

Nonprofit organizations produce a range of goods and services from the purely public to the purely private. Within the two extremes fall a majority of their outputs. This article explores the question of what determines a nonprofit's mix of goods. It first develops a method to measure the product mix of charitable nonprofit organi zations. A testable model is then offered and applied to a national database consisting of tax returns filed with Internal Revenue Service by tax-exempt charitable nonprofits. The results indicate that the output mix can be explained by institutional characteristics, types of activity, and community-based factors. The article concludes with a discussion of whether, given the evidence, public subsidies to charitable nonprofits should be based on the outputs these entities produce.

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