Working Paper 33.6: Abstract

Moral Systems in the Regulation of Nonprofits:

How Value Commitments Matter

This essay explores how three behavior-shaping systems - legal, market, and moral - influence the fundamental tasks of both for-profit and nonprofit organizations, including organizational goal-setting; motivation of participants; and deterring and reducing abuse of power.  After identifying key features of these normative systems and their characteristic differences, the author argues that the influence of moral systems on nonprofit organizations may be underestimated, especially in view of their potentially unifying role with respect to all of the fundamental tasks.  He suggests that the prospects for effective reform of nonprofit governance and accountability regimes are improved when the mechanisms and effects of these moral systems are taken into account.