Bandwagon or Band-Aid? A Model of Nonprofit Incorporation by State

Abstract

What accounts for the addition of new nonprofit organizations in different U.S. states? Do new nonprofit organizations answer calls for help (Band-Aid) or calls for proposals (bandwagon) at their inception? Are nonprofit entrepreneurs pushed by the failures of government and the market or pulled by the legitimacy of the organizational form? This comparative research models the level of nonprofit incorporation in different U.S. states given fragmented legal environments, variable organizational legitimacy, and different levels of social needs. Drawing from institutional, resource dependence, population ecology, and social movement theories and using data from state legal codes, judicial decisions, the U.S. census, the Bureau of Labor Statistics, and the Nonprofit Almanac, 1992-1993, we explore the environmental and interorganizational forces that influence the level of nonprofit incorporation by state.