Instrumental philanthropy, nonprofit theory, and information costs

George E. Mitchell, Thad D. Calabrese

Research output: Contribution to journalArticle

Abstract

Instrumental philanthropy has gained attention and popularity in recent decades as an approach to maximizing the impact of giving. This article evaluates the suitability of the nonprofit institutional form, specifically the US public charity, as a vehicle for instrumental philanthropy. The analysis identifies an incongruity between the informational requirements of instrumental philanthropy and the form and theory of the nonprofit. An alternative theory of licensure is proposed to illustrate the difficulty of the information problem. Analysis suggests that the viability of instrumental philanthropy hinges upon information costs. Several public policy options are considered as means of better supporting instrumental philanthropy, presuming that allocative efficiency in the production of public benefits is a desirable public policy objective.

Original languageEnglish (US)
Article number2019-0050
JournalNonprofit Policy Forum
Volume11
Issue number2
DOIs
StatePublished - Jul 1 2020

Keywords

  • information costs
  • institutional design
  • instrumental philanthropy
  • licensure
  • nonprofit theory

ASJC Scopus subject areas

  • Economics and Econometrics
  • Sociology and Political Science
  • Public Administration

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