Business-Like and Still Serving Society? Investigating the Relationship Between NPOs Being Business-Like and Their Societal Roles

Abstract

Nonprofit organizations (NPOs) becoming business-like is a contested issue. Some understand the adoption of business-like practices by NPOs as a case of adopting rational myths through institutional isomorphism and thus potentially dangerous for NPOs’ ability to fulfill their unique societal roles. Others are more optimistic, arguing that technical rationality is possible in the adoption of business-like practices, and that such practices can therefore support NPOs in fulfilling a wide range of societal roles. Drawing on survey data of NPOs in Flanders, we examine the relationship between the extent to which NPOs use business-like practices, and the extent to which they engage in various societal roles. We find that business-like practices are weakly related to NPOs’ societal roles. All roles are positively related to nonprofit managerialism and unrelated to NPOs’ reliance on commercial funding. Our results suggest that a certain optimism regarding the rational use of business-like approaches is justified.