The Rise of the Nonprofit Sector

Lester M. Salamon

From Foreign Affairs, July/August 1994

Article preview: first 500 of 4,584 words total.

Summary:  Around the globe, people are forming private, nonprofit and voluntary organizations to pursue public purposes once considered the exclusive domain of the state. Economically, environmentally and socially, where the state has failed, nonprofit groups are taking advantage of revolutions in communications and bourgeois values to fill these gaps for themselves. This ?associational revolution? may be permanently altering relations between states and citizens and prove as important to the latter twentieth century as the rise of the nation-state was to the nineteenth.

Lester M. Salamon is Director of the Institute for Policy Studies at The Johns Hopkins University.

A GLOBAL "ASSOCIATIONAL REVOLUTION"

A striking upsurge is under way around the globe in organized voluntary activity and the creation of private, nonprofit or nongovernmental organizations. From the developed countries of North America, Europe and Asia to the developing societies of Africa, Latin America and the former Soviet bloc, people are forming associations, foundations and similar institutions to deliver human services, promote grass-roots economic development, prevent environmental degradation, protect civil rights and pursue a thousand other objectives formerly unattended or left to the state.

The scope and scale of this phenomenon are immense. Indeed, we are in the midst of a global "associational revolution" that may prove to be as significant to the latter twentieth century as the rise of the nation-state was to the latter nineteenth. The upshot is a global third sector: a massive array of self-governing private organizations, not dedicated to distributing profits to shareholders or directors, pursuing public purposes outside the formal apparatus of the state. The proliferation of these groups may be permanently altering the relationship between states and citizens, with an impact extending far beyond the material services they provide. Virtually all of America?s major social movements, for example, whether civil rights, environmental, consumer, women?s or conservative, have had their roots in the nonprofit sector. The growth of this phenomenon is all the more striking given the simultaneous decline in the more traditional forms of political participation, such as voting, party affiliation and union membership.

The rise of the third sector springs from a variety of pressures, from individual citizens, outside institutions and governments themselves. It reflects a distinct set of social and technological changes, as well as a long-simmering crisis of confidence in the capability of the state. Broad historical changes have thus opened the way for alternative institutions that can respond more effectively to human needs. With their small scale, flexibility and capacity to engage grass-roots energies, private nonprofit organizations have been ideally suited to fill the resulting gap. The consequence is a sweeping process of change that closely resembles the "third wave" of democratic political revolutions identified by Samuel Huntington, but that goes well beyond it, affecting democratic and authoritarian regimes, developed and developing countries alike.

EVERYONE?S DOING IT

Nonprofit organizations are incredibly diverse, and analyzing their upsurge at the global level is no simple task. A lack of systematic data, varying terminology and widely divergent functions make these organizations hard to identify from place to place. Serious definitional problems are compounded by the varied treatment of these organizations in national legal structures, with some countries explicitly providing for the incorporation of charitable or nonprofit organizations and others doing so partially or not at all. Official listings of such organizations are therefore notoriously incomplete, and their treatment in national economic statistics is grossly imperfect.

Ideological blinders have also obscured a clear assessment of the nonprofit sector?s true scope and role. For much of the past 50 years, politicians on both the political right and left have tended to downplay ...

End of preview: first 500 of 4,584 words total.