Commercialism in nonprofit social service associations: Its character, significance, and rationale

This article examines the commercial practices and sales income of national nonprofit social services associations in the United States. The associations span the fields of youth services, health charities, community and recreation services, and advocacy programs for older Americans and children. The commercial ventures of these associations reflect an important trend in the non-profit social services sector, which has implications for taxation, financing,and regulatory policies. The conceptual framework that defines nonprofit organizations as multiproduct economic organizations helps illuminate the relationship of commercial sales to the pursuit of the mission. In general, the commercial initiatives of the associations examined are not solely revenue-producing ventures in that they make direct contributions to the mission as well; indeed, pains are taken by association leaders to avoid activities that would damage their associations’ abilities to pursue their missions. Statistical analysis of the sales revenues of local affiliates of one association—the Jewish Community Centers Association—demonstrates that losses of external income from grants and contributions stimulate sales income whereas increases in memberships expand the markets within which these organizations can generate revenue from user fees.