Policy and paper clips: Rejecting the lure of the corporate model

Abstract Should nonprofit organizations adopt the business corporation model of governance? This article examines the differences between business and nonprofit corporations and argues that adopting the corporate model would be a dangerous error for nonprofit organizations. Nonprofits need a governance structure that reflects their unique aspects: the complexities of defining corporate mission; lack of a universal measure of success; dominance of community members rather than corporate insiders on the board; accountability for the public trust; responsibilities to many constituencies; and board responsibility for fundraising. While acknowledging that many nonprofit boards need to solve problems of inefficiency and unclear understandings of board responsibilities, the author argues that adopting the corporate model is the wrong prescription.