The Nonprofit/For-Profit Continuum: Theorizing the Dynamics of Mixed-Form Markets

Abstract

A growing body of research has emerged on “mixed-form” markets—markets for goods and services in which for-profit, nonprofit, and government providers coexist. This article seeks to understand the dynamics between nonprofit and for-profit organizations operating within the same market. The authors propose a five-step theoretical framework that includes both nonprofit and for-profit actors to capture what is fundamentally a temporal process: market identification; market growth; increasing cost for goods/services; increasing price for goods/services; and cross-sector competition. The authors use data from extended qualitative investigations in distinct service markets to analyze the unique contributions and capacities of each organizational form, and the transformation of market structure over time. The authors conclude that the dynamic interplay between nonprofit and for-profit forms within markets produces three possible outcomes: stratified, displaced, and defended markets.