Another Role for Nonprofits: The Case of Mop-Ups and Nursemaids Resulting from Privatization in Emerging Economies

Abstract

This article synthesizes economic, sociological, and historical theory, first in the American context and then in an Eastern European (Polish) context, to develop an explanation for a distinctive type of nonprofit activity. The authors explore a role for some nonprofits arising due to the privatization experience in the early history of the United States and to recent privatization in Poland (as an example of a transitioning economy), where nonprofits develop as facilitators for the creation of for-profit enterprises. The "facilitator hypothesis" proposes two roles for nonprofits. First, they "mop up" problems created when firms are privatized, assisting those persons left unemployed or otherwise adversely affected by privatization. Second, they act as "nursemaids," nurturing nascent for-profit businesses and industries. This article suggests further study of emergent organizational forms in the transformation from command to market-oriented economies as a way to understand the diffusion of sectoral models from one economy to another.