Commercialisation in the nonprofit sector - Blessing or curse?

Abstract

The rapidly growing nonprofit sector with its important role as a provider of social services is facing new challenges; not only due to the growing number of organisations competing for scarce resources, but also as a result of the increasing complexity of social issues that the sector is trying to solve. To respond to the current challenges, nonprofit organisations are increasingly utilising commercial practices. While there is a plethora of existing scientific studies agreeing on the most common reasons for and forms of commercialisation in the nonprofit sector, there is no consensus whether the implementation of commercial activities positively or negatively affects nonprofit organisations. Apart from the differing views on the effects of commercialisation, the majority of existing studies addresses the general effects rather than the effects of individual commercial practices. Trying to fill this gap in the literature, this thesis explores the effects of different forms of commercialisation in two Gothenburg-based case studies through semi-structured interviews. The results indicate that most commercial activities lead to effects that can be categorised into an increase in resources, efficiency, economic sustainability as well as the retention of organisational values and positive mission-level effects, showing the potential of commercial practices to support nonprofit organisations. The research furthermore revealed organisations’ lack of awareness of what role commercial practices play in their organisations.