The Marketization of Nonprofits


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This thesis deals with the concept and consequences of marketization in the nonprofit sector. Marketization describes the process of nonprofit organizations becoming more business-like and is caused, among other things, by increased competition for scarce resources, the rise of professionalism, and calls for more transparency and efficiency by funders and the public. Research about marketization is inconclusive; some researchers believe marketization can increase not only efficiency, but also effectiveness of organizations, while others fear that nonprofits lose their focus on a social mission. The four articles presented in this thesis focus on the theoretical and practical implications of nonprofits relying more on earned income, a dominant feature of marketization, and nonprofits actively and passively adopting management practices and tools from the for-profit sector, another key characteristic of increased marketization. The results show that marketization can increase the economic and social performance of an organization, and, when handled well and implemented through a clear strategic focus, foster mission achievement. Particularly the focus on beneficiaries and internal processes can help organizations to better fulfill their mission. A loss of focus on the mission must be feared if regulatory forces act on the organization without a simultaneous professionalization of management, or if an organization focuses too much on its competitors.

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