MARTTI MUUKKONEN

THE FAMILIAR UNKNOWN

Introduction to Third Sector Theories

Licentiate Thesis.

University of Joensuu.

Department of Orthodox Theology and Western Theology.

Jubilee 2000 2

ABSTRACT The "third sector" is a concept which denotes the sphere between state and market. This study is an attempt to further delineate that field through an evaluation of the existing models and theories which describe it. It analyses how leading scholars have defined the third sector, the metaphors behind their definitions, and the type and range of theory they use. It also integrates the evaluation of these theories with social and religious movement and world view studies, in order to develop a model for the study of international NGOs. HISTORY: The roots of the Western third sector are in Antiquity. There are three basic models in Europe on how the sharing of responsibilities are regarded. The Catholic model emphasises family responsibility. The Lutheran model favours state dominance. The British (and US) model sees NPOs as public organs in the service of the community. Terminological differences reflect the variety of cultural frames. CONCEPTS: "The third sector" has several parallel concepts such as civil society, philanthropic sector, charitable sector, voluntary sector, nonprofit sector and social economy. It can also be described as a field of intermediary organisations, nongovernmental organisations or social movements. THEORIES: The studies began in the 1960s when the leaders of the US foundations did not know the impact of the US tax reform. Economic theories, which were the first third sector theories, have proposed (state-, market- and voluntary-) failure theories to explain the role of nonprofit organisations. Optimising theories explain the behaviour of the NPOs. Other economic concerns have been labour economics and issues of donations. In the 1970s, historians, sociologists and political scientists devised theories as well. Sociological research includes general theories, political macro theories, organisational (adaptation-, ecological- and institutional) theories and micro level theories of voluntarism. At the end of the 1980s, the focus shifted to comparative international studies which have focused on varying terminology, legislation and religious/ethnic backgrounds. KEYWORDS: THIRD SECTOR, NONPROFIT ORGANISATION, NONGOVERNMENTAL ORGANISATION, CIVIL SOCIETY, SOCIAL ECONOMY, ASSOCIATION, THEORY 3

Preface

When I was a student in the late 70s, I heard a story in one seminar of the European Alliance of YMCAs that taught me what voluntary work is all about:

In Traiskirchen, Austria, there was a refugee camp. In that camp the YMCA had a building where it ran its activities. Those YMCA activities were, for the most part, organised and managed by volunteers from different European YMCAs. A period of a volunteer’s service was from half a year to one year. There was a Scottish teacher who was on leave from his school and he came to Traiskirchen in order to serve the refugees with his talents. He was given responsibility over the recreation activities of the boys in that camp. Thus, he found himself beside the ping pong table playing with the boys. While playing table-tennis, he felt disappointed and thought that he could have done this in Scotland as well. This is not what he expected. He is a teacher among kids who need education but the only thing he is allowed to do with them is play ping pong. Then, one day, one mother came to him and said ”Thank you for your work. The YMCA house has been the only place in this camp where I have seen that my son smiles.”

When I wrote this preface there was a vivid discussion going on in the ARNOVA discussion group over whether or not it is fair to require students to volunteer as part of their compulsory courses. My general impression concerning that discussion has been that if there is no realisation by the student of the raison d’être of the voluntary work and a vocatio interna, it is worthless. Most of the work in the third sector exists in the fields of charity and education. The work in these fields require commitment to values that emphasise love and respect towards those people to whom the service is aimed. Without love the service is cold and does not have a solid base.

In theories of the third sector this aspect of love does not appear often. The emergence of the third sector and organisations there are explained with other determinants. However, I want to ask the reader keep this love aspect in mind while reading this work.

Doing this work has been a challenging but rewarding 4 task. I have learned a lot from the structures and dynamics of the organisations in the third sector. As a former YMCA secretary, I have many times thought, ”if only I had known this ten years ago...” For this priviledge to have a possibility to do this work I would like to thank several organisations and individual persons. First, I want to thank my mother, Marjut Aspinjaakko, who made it possible for me to start this task. For other financial contributions I want to thank the Faculty of Humanities in the University of Joensuu, Adult Education Department of the Ministry of Education of Finland, and The Foundation for the Support of Christian Science and Arts. Among many people who have advised me in my work, I want to say a special thanks to my colleagues Päivi Harinen and Erja Moore. They have patiently read my manuscripts and proposed corrections. Patience has also been asked from my wife Sirpa and my children Matti and Marjukka. Thank you for understanding that father has sometimes been out of this world in his own realms. However, my greatest gratitude is expressed in the words ”Soli Deo Gloria.”

Joensuu, 3rd Sunday after the Passover, Jubilee 2000

Martti Muukkonen 5

Contents

ABSTRACT ...... 2 PREFACE ...... 3 CONTENTS ...... 5

1. INTRODUCTION ...... 7

PART ONE: CULTURAL AND HISTORICAL FRAMES ...... 18

2. HISTORICAL PERSPECTIVE ON THE THIRD SECTOR ...... 19 2.1. The Importance of History ...... 19 2.2. From Face-to-face Charity to Organised Philanthropy ...... 22 2.3. Three Models of European Third Sector ...... 27 2.3.1. The Catholic Frame of Responsibilities ...... 29 2.3.2. The Lutheran Model of Responsibilities ...... 30 2.3.3. The Clash of Frames and the Emergence of the Subsidiarity Principle...... 33 2.3.4. The Anglo-Saxon Protestant Frame of Responsibilities .... 35 2.3.5. The Labour Movement and the Church ...... 38 2.4. A Country Where Everyone Form Associations ...... 39 2.5. Privatisation Boom in Western Democracies ...... 43 2.6. Discussion on the Historical Studies ...... 45

3. CONTEMPORARY FRAMES ON THREE SECTORS ...... 50 3.1. Distinction Into Three Sectors ...... 50 3.2. Problems of Distinctions ...... 52 3.3. Dear Child Has Many Names ...... 56 3.3.1. Civil Society ...... 57 3.3.2. Social Movements ...... 67 3.3.3. Intermediary Organisations ...... 69 3.3.4. Nongovernmental Organisations ...... 71 3.3.5. Philanthropy Sector ...... 74 3.3.6. Voluntary Sector ...... 77 3.3.7. Nonprofit Sector ...... 80 3.3.8. Social Economy ...... 85 3.3.9. Informal Sector ...... 87 3.3.10. Family of Concepts ...... 89

PART TWO: MAIN RESEARCH TRADITIONS ...... 94

4. THE THIRD SECTOR AS PART OF THE ECONOMICAL LIFE ...... 96 4.1. The Emergence of Nonprofit Sector Studies ...... 96 4.2. The Role of the Third Sector ...... 102 4.2.1. State Failure ...... 102 4.2.2. Market Failure ...... 109 4.2.3. Voluntary Failure ...... 116 4.2.4. Transaction Costs Approach ...... 122 4.2.5. Evaluation of the Nonprofit Role Theories ...... 126 4.3. The Behaviour of the Nonprofit Organisations ...... 128 4.3.1. Organisational Effectivity ...... 129 4.3.2. Employment ...... 134 4.3.3. Evaluation of the Nonprofit Organisation Behaviour Theories138 4.4. Discussion on the Economic Theories ...... 140

5. THE THIRD SECTOR AS PART OF THE SOCIETY ...... 144 5.1. The Emergence of Sociological Research on Nonprofits ...... 144 5.2. General Theories of the Third Sector ...... 146 5.2.1. The Sociology of the Nonprofit Sector ...... 146 5.2.2. The Commons ...... 150 5.2.3. Evaluation of the Third Sector General Theories ...... 152 5.3. Political Perspectives on the Third Sector ...... 158 5.3.1. American Market View on Nonprofits ...... 158 6

5.3.2. European Struggle with the Welfare State ...... 167 5.3.3. Evaluation of the Third Sector Political Theories ...... 173 5.4. Sociology of Organisations and the Third Sector ...... 176 5.4.1. Adaptation of the Organisation ...... 178 5.4.2. Natural Selection of Organisations ...... 193 5.4.3. Organisations as Cultural Expressions ...... 207 5.4.5. Evaluation of the Third Sector Sociological Studies .... 212 5.5. Discussion on Third Sector Political and Sociological Studies217

6. THE THIRD SECTOR AS PART OF INDIVIDUALS’ LIFE WORLDS ...... 219 6.1. Altruism ...... 220 6.2. Donating ...... 224 6.3. Definitions of Voluntarism ...... 227 6.4. Motivations for Volunteering ...... 232 6.5. Evaluation and Discussion on Voluntarism Theories ...... 241

7. COMPARATIVE INTERNATIONAL STUDIES OF THE THIRD SECTOR ...... 247 7.1. Need for the Comparative Studies ...... 247 7.2. Early Research of Comparative Studies ...... 249 7.2.1. Religious Heterogeneity and Differentiated Demand ...... 250 7.2.2. Gathering the Research from Various Countries ...... 258 7.2.3. International Conferences ...... 261 7.2.4. Evaluation of the Early Comparative Studies ...... 264 7.3. The Johns Hopkins Comparative Nonprofit Sector Project ..... 266 7.3.1. Definitions ...... 267 7.3.2. Classification ...... 277 7.3.3. Size and Functions of the Nonprofit Sector ...... 280 7.3.4. Factors Behind the Variation ...... 291 7.3.5. Evaluation of the Johns Hopkins Project ...... 296 7.4. Discussion on the Comparative Studies ...... 299

PART THREE: CONCLUSION ...... 304

8. CONCLUSIVE DISCUSSION ...... 305 8.1. Strengths and Weaknesses of the Third Sector Theories ...... 305 8.2. Implications on the Hypotheses of Federal INGOs ...... 315 8.2.1. Theory of INGOs in Brief ...... 315 8.2.2. The Core ...... 318 8.2.3. The Shell of an Organisation ...... 327 8.2.4. Organisational Environment ...... 332 8.2.5. Reflection on the Theory of INGOs ...... 337

LITERATURE ...... 339 INDEX ...... 365 7

1. Introduction

The background of this study lies in my research on the change of the mission view of the World Alliance of YMCAs. When I started the research, I found out that there is not much theory either on international nongovernmental organisations (NGOs) or on international religious organisations. Additionally, when I looked at such an octopus as the YMCA1, I found it hard to force it into one single category. This means that in a way it is more a question of Ludwig Wittgenstein’s family resemblances than a uniform type of organisation. This means that all national YMCA movements are unique but when they are seen together (like in family picture) there are similarities that bind them together. I discuss more on Wittgenstein’s concept in chapter 3.3.9.

In order to find theoretical basis I have reviewed several related fields of research, namely social movement studies, religious movement studies, world view studies and third sector studies. In this work I concentrate on third sector studies. However, the reader can find that I sometimes refer to those other subdisciplines. My strong conviction is that these fields of research should communicate more with each other.

The concepts of third sector, nonprofit sector, social economy, civil society and some other related expressions have appeared more and more in the media. They all point to that citizen’s voluntary action which is neither official state action nor profit seeking market activity.

1 YMCA has over 30 million members in more than 100 countries. Some local associations are large and prosperous, some are small and poor. In some countries YMCA is a revival movement, in others a sports organisation or a social service agency. In some countries all associations are under one national federation, in others there are networks of specialised national organisations for students, sports, Scouts, railway personnel, military personnel, etc. In some countries the movement is strictly Christian, in others the membership can be mostly non-Christian. In some countries YMCA and YWCA have united, in some others they just work together. There is not a one concept of YMCA. 8

However, it is surprising that the terms and their content are often unknown even to those who are dealing with the sector in public administration and in different fields of social research. Some of the usual questions which I have to answer in the university cafeteria are: ”What is that third sector you are talking about?” and ”What are the two other sectors?” This study has an intention to evaluate the third sector studies1. At the same time, I hope the phenomenon of third sector itself will be introduced. However, before starting, I think it is necessary to frame my starting points.

I stand among those scientists who see science as highly dependent on the external history, as Thomas Kuhn2 calls it. It means that scientific results also depend on other factors than the internal development of the science itself. In the anthropology3 and sociology of science4 the impact of researchers' background is seen as an important determinant that must be acknowledged from the very beginning of the study. From that perspective the research is always a composition of the writer. It is a picture that a writer wants to paint for others even though she/he follows certain methodological rules and tries to take

1 I refer mostly to American and international literature which has dominated the discussion in the field. In Finland the field is young and has been centred on the problems of welfare state. The research has been mostly empirical and based on American and German theories. This is why I do not refer much to it. 2 Kuhn 1968,78-82. 3 Anthropological methodology has focused on such themes as the impact of the researcher’s reactions to physical conditions in the field, her/his psychological and social problems, gender and cultural background. Kelles 1984. 4 Sociology of science has focused on the interaction of science and society, the researcher’s personal motives, the validity of observation, the creation of scientific consensus, the character of classification, and the realistic idiom of science.(Barnes & Bloor & Henry 1996; Barber 1968; see also Mulkay 1994). Other themes are science is masculine (Keller 1985), it is bourgeois (Marxists), science is colonialisation (Galtung 1979), it is oppression over disabled (Stone & Priestley 1996), it is one form of tribal culture (Ylijoki 1998), it is a competition over power (Bourdieu 1993; Bourdieu, Passeron Jean-Claude & de Saint Martin Monique 1994), it is question of ethical choices(Heinonen 1998). For the comprehensive introduction of these problematics, see Restivo 1991. 9 distance to the research object. All researchers take for granted some issues that have implications to the results. Science is, in Wittgenstein’s terms, a language game1 and different disciplines have different rules for this game. Paul Feyerabend has expressed this as follows:

an argument becomes effective only if supported by an appropriate attitude and has no effect when the attitude is missing... every argument involves cosmological assumptions which must be believed or else the argument will not seem plausible. There is no purely 2 formal argument.

Especially in sociology of religion this phenomenon is evident. We only have to look how the backgrounds of Comte, Durkheim, Freud, Marx, or Weber determined their theories on religion. If we then look at their successors, we can see that sometimes the texts of the classics have almost a sacred status - Marx is an extreme example but many sociologists hold on Durkheim’s (and psychologists on Freud’s) assumptions on religion, not for scientific reasoning but for world view reasons. In general, as Daniel L. Pals summarised his analysis of theories of religion, in studies on religion ”atheism tends to favour reductionism3.”

Because the backgrounds are not analysed and reflected4, we usually have an impression of objectivity. We do not normally question the influence of our social background, research finance, our experiences in youth, our world views, our emotional connections, the metaphors we use, etc. To sum up this view, I quote Johan Galtung:

Today there is little doubt that there is a basic correspondence between the social matrix and the kind of social science it produces, and that it is probably also true that styles of 5 scientific pursuit will converge as the social matrix converge.

1 Wittgenstein 1953, §7 (first mention). 2 Feyerabend 1978,8 (italics in original). 3 Pals 1996 4 This was one of the main theses of Paul Feyerabend. Feyerabend 1978, 1988. 5 Galtung 1979, 485. 10

In the context of third sector studies the same idea is expressed by Peter Dobkin Hall when he evaluated nonprofit theories and institutions:

Theory is not value-neutral. It is inevitably appropriated, constructed, or appealed for purposes related to the configuration of institutional power and the interests of 1 stakeholders.

In the case of third sector studies these different background determinants are especially important for two reasons. First, the field is interdisciplinary and different disciplines have different paradigms. Moreover, this also is true inside one discipline when different schools give different interpretations on reality. Often these competing views exclude each other. Second, the comparative aspect of third sector studies deals with the understanding of society’s construction in various countries. The terminology differs from country to country and this is largely based on how people frame the institutions. Thus, the third sector is also seen differently in different countries and in different disciplines. It is more a question of Wittgensteinian family resemblances2 than anything that can be categorised.

The central question of this study also emerges from the discussion above: Why are third sector studies important in contemporary society? I try to answer that question by looking at how researchers see the field. However, there is the question: ”How do the theoretical starting points influence the choice of data and methods and how do these in turn influence results?” This in mind I have divided this study into two parts. In part one I study the cultural context in which third sector scholars work. The research question in this part is ”How are third sector and other related concepts framed in different cultures?” Because the majority of the research has been

1 Hall 1995,5. See also Karl 1987. 2 Wittgenstein 1953, §§65-67. 11 done in the United States and Europe, I limit my research on cultural streams of the West. In part two I study how the researchers construct the field. Thus, in this part the research task is: How is the third sector constructed in different third sector research traditions? When in part one the differences will supposedly be between countries, in part two the hypothesis is that differences are between the disciplines and scholarly traditions.

While I am doing the question of tradition dependence to the previous research of third sector, I have to do it to myself, too. What does my background mean to this research? As I stated above I have serious doubts about the ‘purity of science’ and thus I reject the objectivity theses of logical empiricism and favour the subjectivist views of constructivism. Following Peter L. Berger and Thomas Luckmann1 I see scientific results more as constructions than objective findings from raw data. If objectivity is impossible then we should openly admit our subjectivity. Otherwise, we betray ourselves. From this point of view it is honest to tell the reader the cadre in which I am standing.

I, like many other movement scholars, have a history in the movement that I study. I have been involved in the YMCA for twenty years both as a paid local secretary and as a volunteer board member. Mainly my experience in international work is in the European context of grassroots to grassroots interaction although I have participated some world wide conferences and seminars. By profession I am a Lutheran pastor and am now on leave from my vicarship. Politically I am more leftist than rightist but remain outside the political parties. My personal history has been much related to voluntary youth work in the YMCA and other Christian associations and parishes. Although I also have experience from relatively large organisations (Jyväskylä Lutheran Parish has 56 000

1 Berger & Luckmann 1972 12 members) my leading positions have been in small organisations of 1-10 employees. This field experience will surely colour my reviews of the theories - I may take for granted such issues that others would see problematic and vice versa. It also means that I am more sympathetic to those research traditions that take religion seriously and do not reduce it to some psychological or social factors. I might also favour the autonomy of third sector more than a scholar who has had a career in public administration. On the other hand, I see the merits of the Nordic welfare model and I am quite hesitant to change it to some other model. As a theologian I might emphasise the role of the churches and other religious bodies more than other scientists would do. As a sociologist I emphasise the social factors in the formation religious ideas more than other theologians.

As a part of a larger project, the other task of this study is to find out how the third sector theories can be used in studies of international NGOs. At this stage the filter for the collection of the ‘pearls’ in studies is my general understanding of the YMCA. I look at the World Alliance of YMCA partly as an insider because I have been involved in YMCA for so many years. However, I also look at it as an outsider because I have never been on the boards or staff of the World Alliance. This general understanding of YMCA, my master thesis on the World Alliance of YMCAs and the time I collected my material in the archives of the World Alliance in Geneva will be the subjective starting points of the second task of this study. However, even if there are strong subjective elements in scientific work, there have to be some methods and tools that guard the subjectivity.

The method of finding the material for this study is what Pertti Alasuutari calls the detective method in his textbook of qualitative methods1. It means that in the

1 Alasuutari 1989,9-15,25-42,124-131. 13 beginning of the study I did not know what I would find. The merit of this method is that it does not exclude from the beginning some phenomena that appear later to be important. I have tried to find the main traditional roots of the collective behavior studies. This has been done by examining the bibliographies of the studies on the third sector and especially reviews into the studies. This process gave me an insight of the main traditions in the field of the third sector.

After identifying the main theoretical traditions, I spotted the hallmarks of these traditions. For this study I reviewed those works that have left their theoretical footprints in the field. After each review I evaluated the main contribution of the scholar to the theory of the third sector. The idea of the following evaluating scheme is from Daniel L. Pals1 who has used it in the evaluation of theories on religion. I have modified it so that it fits better to this study. The evaluating scheme contains the following questions:

1. How does the theory define its Research Object?

In third sector research there are various concepts that describe the sector. These definitions include and exclude the elements of the sector in different ways. I evaluate the parallel concepts of the third sector in chapter 3.3.

2. How does the theory define the responsibilities of different sectors?

Different theories carry the presumptions of the ideal situation. In many cases the third sector has been seen as an anomaly or an exception. Liberal economic theories eagerly see that the market can take care of everything and leftist political theories reserve this role to the

1 Pals 1996,269. 14 state. In understanding how the scholars frame the role of third sector organisations, it is essential to see how they frame the core elements of society.

3. What type of a theory it is?

Third sector research is an interdisciplinary field of study. Different disciplines and schools focus on the phenomena according to their preferences and often the starting point determines the results. Thus, the third sector is framed differently in different research traditions. Additionally, the studies range from micro to macro level when some scholars focus on individual activity while others focus either on organisations, industry or society.

4. What is the range of the theory?

Some theories try to give an explanation of the whole sector while others aim to interpret only some part of it. A question that is linked to the range of the theory is that of empirical evidence. Quite often scholars focus on the organisations in some special industry, like education or health care, but suppose that the results are valid in other industries as well. A similar notion can be made on the studies that focus on some particular country as well.

5. What is the metaphor behind the theory1?

Linked to the previous questions, every scholar has some kind of pre-understanding of the research object she/he is studying. This pre-understanding is often crystallised in some metaphor2 or model. Clifford Geertz has noted in his theories of symbols that a symbol is both

1 The last two of these questions replace Pals’ last question which focused on the religious attitude of the scholar who is studying religion. 2 On root metaphors in sociology, see Brown 1977. On metaphors in sociology of organisations, see Burrell 1997 and Morgan 1988. 15 a model of something and a model for something1. Thus, the metaphor defines how the research object is modelled.

6. How could this theory be used in studies of international NGOs2?

This study has also a practical task in developing a theory for international nongovernmental organisations. Thus, the last question serves this purpose.

The view in this study aims to be more a landscape than a portrait. I am aware that this process of ‘painting a landscape’ means that I cannot go very ‘deep’ into the theories. In practice this means that there are surely details that I do not reach in the same way as if I concentrated on one single theory. However, I think that these kinds of general views are also needed. Especially since sociology has split into so many subfields and schools that without distancing ourselves ‘we cannot see the forest while looking at the trees’. The problem is that the field that emphasises empirical research does not favour this kind of landscape research. The price of a larger picture is that the details will be fuzzy.

The studies, that are the source material of this research, are quite hard to categorise because of the interdisciplinary nature of the field. One cannot always say that one particular study belongs to some traditional discipline and not to another. There are some theoretical traditions that are defined and known according to their discipline. On the other hand, there are approaches that are determined and known by their perspective and they are

1 Geertz 1973, 93. 2 Because this study is a search for the research theory, the comments on NGOs and YMCA are at this stage based on my field experience as a YMCA secretary and volunteer board member. More detailed and analysed results will be given when I have used the tools that I have found, namely in the study of the transformation of the World Alliance of YMCAs from revival movement to social service organisation during the period from 1955 to 1973. 16 interdisciplinary by virtue. Additionally, the same problems (and sometimes solutions) occur in different approaches. So it is impossible to categorise the research neither by discipline nor by approach. One possibility could be the historical development of the field, but this only works in the beginning of history of the nonprofit research. However, after the emergence of nonprofit studies most of the existing theories were created almost at the same time in the late 1970s and in the 1980s. The field is quite a good example of the life that does not accede to definitions.

My categorisation of the field follows the boundaries of disciplines. From that perspective the studies of the third sector can be combined to five large traditions, namely historical studies, economic perspective, sociological perspective (which includes institutional approach and ecological approach), political perspective and comparative international studies. Of those theories institutional and ecological approaches come from the sociology of organisations, historical perspective is mostly social history and comparative international studies are an interdisciplinary attempt to create common language for the field. In the conclusion I will sum up the themes thematically.

The basic problems of the studies are, according to Paul DiMaggio and Helmut Anheier, the origins (why do NPOs exist?) and the behaviour (how do they differ from others?) of NPOs. These two issues should be analysed in three levels: organisation, industry, and nation-state.1 Later Anheier added the third problem of society (how do they interact with society?)2. Other research concerns have been about philanthropy, altruism, ideology, leisure and voluntarism. However, these broad categorisations overlap so often that any divisions of the research

1 DiMaggio and Anheier 1990. 2 Anheier 1995,18. 17 traditions are like lines drawn in the water.

Admitting both the varieties of the third sector actors and the research, I am not giving any general theory based on the research1. Instead, I try to explain how the researchers have seen the phenomenon. In doing this I go from topic to topic in the order that I think is needed to understand the following topic. Thus, in chapter 2 I review the historical studies of third sector in order to give a general view of how the third sector has been part of the Western culture. Cultural megatrends and national traditions have created different concepts which are introduced in chapter 3. These two chapters form the context for the studies which I evaluate from chapter 4 onwards. In chapter 4 I focus on the economic theories of the role and behaviour of the nonprofits. In that chapter the third sector is mainly seen as one segment in the market. Chapter 5 deals with the sociological and political theories and its focus is on the interaction between society and NPOs. While other chapters deal with the meso and macro levels, chapter 6 focuses on the socio- psychological studies on the motives behind donating and volunteering. Chapter 7 enlarges the national views to international comparisons. Finally, in chapter 8 I discuss about the ‘pearls’ of the approaches and make apreliminary proposal for the research theory for federal type international nongovernmental organisations.

1 One task for future studies could be some kind of network analysis of what themes, research, papers, approaches and disciplines are connected to each other. 18

PART ONE: CULTURAL AND HISTORICAL FRAMES

19

2. Historical Perspective on the Third Sector

2.1. The Importance of History

Historical perspective on the third sector focuses on the social historical aspects of the field. Its main pre- understanding is that the third sector cannot be understood without knowledge of the historical conditions where the organisations emerged. Historical aspects give light to the emergence, diffusion and institutionalisation of the ideological and organisational innovations in third sector. Many of the existing models have deep roots in culture. According to Christopher Hood and Gunnar Folke Schuppert:

...institutional design tends to be deeply rooted in tradition, and linked to fundamental constitutional rules and legal 1 assumptions, which themselves change only very slowly.

E. Blake Bromley, who has consulted legislators in the former communist bloc, states from a field workers point of view that:

it is increasingly my belief that international experts in philanthropy promoting civil society would do better to concentrate their time on analysing and communicating the history, ideology and evolution of the charitable sector in their 2 own countries rather than in the recipient country.

Lester M. Salamon and Helmut Anheier note that nonprofit organisations ”have deep historical roots in virtually every one of the societies” they have examined. They continue:

The inter-relationships between this sector and the Church, to cite just one well-known example, have been especially pervasive, and voluntary institutions have therefore been fully caught up in the broader struggles between the Church and secular authorities that animated European history for much of the Reformation and

1 Hood & Schuppert 1990,95. 2 Bromley 1994,170. 20

Enlightenment, and that survived well into the twentieth 1 century.

When a model has been invented it serves as a resource and stimulus for new ideas as it enables concentration on the main issue instead of organisational arrangements. Moreover, as Hood and Schuppert note above, the models are surprisingly stable. I come to this question below when I deal with the sociological theories of the third sector.

The notions of the cited authors above lead to questions like: ”Where do these models come from?” and ”How deeply rooted are they in the culture?” Salamon and Anheier point to the relationship between the church and the nonprofit sector. In this chapter I try give a general view concerning how historians see the emergence and development of the field.

Salamon and Anheier have been interested in the various models that have been developed in different countries. They refer to Gøsta Esping-Andersen’s findings that modern welfare states are a product of ”complex inter-relationships among social classes and social institutions2.” Esping-Andersen writes:

The extraordinary power of the Church, the aristocracy, and an authoritarian state in early continental European capitalism is certainly a key to the explanation of this regime-type; in converse, the weakness of absolutism and the dominance of a laissez-faire-inspired bourgeoisie in the Anglo-Saxon nations goes a long way in accounting for the ‘liberal’ regime... It is clear that international variations in welfare state development cannot be ascribed solely to different levels of power mobilization, but must be understood in terms of power 3 structuration.”

From this idea Salamon and Anheier develop a model of four distinct types of welfare ‘regimes’. They are Anglo- Saxon liberal welfare state, corporatist welfare state of

1 Salamon & Anheier 1996a,16. 2 Salamon & Anheier 1996a,15. 3 Esping-Andersen 1990,110. 21 continental Europe, Nordic Social Democratic welfare state, and the statistic model. In the liberal model the government does not spend much on social services and there is a large nonprofit sector. Opposite to this, in the Social Democratic model, the role of the state is extensive and it leaves little room for the third sector. In the corporatist model the state has been forced to support nonprofit organisations. Finally, the statistic model resembles social democracy, but it is not an instrument of the organised working class but acts on its own behalf. The first three models can be found in Europe and the fourth refers mainly to the Meiji1 Restoration of 1868.2

All the scholars mentioned above note the importance of tradition in the framing of the third sector. However, they refer only to quite a short period of history. As a theologian I recognise some cultural beliefs that arise far earlier than from the last 400 years. It is worthwhile to remember Talcott Parsons’ notion that the era circa 700-600 BC was the time which formed the value systems of the great cultures that have guided the civilisation from then on3.

What follows in this chapter is an attempt to find deeper cultural roots for the three European models than what Salamon and Anheier give. Another attempt is to give light to the role of religion in the formation of models of third sector. This is done by reviewing historical studies in the field. However, there is certain disequilibrium in third sector literature. One can say that only the history of American nonprofit sector has been thoroughly studied. When we turn to Europe (and other

1 Salamon and Anheier refer to the reign of Japan’s emperor Mutsuhito 1867-1912. 2 Salamon & Anheier 1996a,15-18, 24-27. 3 Parsons 1969,558-563. Jacques Defourny goes even further when he mentions that mutual benefit organisations of stonemasons existed as early as 1400 BC in the Nile valley. Defourny 1992,29, note 5. 22 continents), we still have to wait for the writer of the history of the European third sector. Until then we have to rely on studies that focus on sub-fields of the third sector, the most important of which are education and philanthropy. It is a matter of opinion if this literature is included in third sector literature or not. The choice is much based on the debate whether the third sector is a product of modernity or is there a continuum from ancient institutions to the present organisations. Below we can see how the roots of third sector can be found in antiquity.

2.2. From Face-to-face Charity to Organised Philanthropy

Early histories of third sector show that philanthropy is not an invention of the 19th century but has its roots in the dawn of humankind. Frank M. Loewenberg has studied philanthropy in early Israel. The ancient Near East is important because it produced the basis for Western ethics1. As we see below, a great number of NPOs have a religious basis and Biblical ethics are very alive in them.

Loewenberg notes that philanthropy has transformed from individuals, via voluntary organisations, to state. He points out that

At first, the norm called for individual concern for the unfortunate. In time, in most cultures, voluntary organizations were given (or taken upon themselves) the responsibility for providing services that gave concrete expression to these sentiments. At a still later date, communal agencies began to 2 supplement or replace these voluntary organizations.

1 Loewenberg and Vonhof argue that the Greek philanthropy was more of a reciprocal activity, i.e. a donor expected some kind of repayment from the beneficiaries, like votes or (in the case of hospitality) gifts. Loewenberg also discusses the tendency to neglect the Jewish roots of Christian charity. Loewenberg 1994,196f.,205,n.2-3; 1995,308f. Vonhof 1962,13-16. 2 Loewenberg 1994,193f. 23

The basic concept necessary to understand ancient Jewish philanthropy is the Hebrew term tzedakah1, righteousness. Early Jewish ideas of charity were derived from social legislation which was based on three ideas: divine authority, covenant between Israel and God, and idea of a man as an image of God. The individual charity was built into the culture through socialisation. Philanthropy in Israel was a religious act.2 This trend can be still seen in all Abrahamic religions an it forms one basic model for philanthropy.

Loewenberg identifies two historical trends that were seen when the society changed. Along with urbanisation and increase of the amount of the poor there was a shift from individual, voluntary provision to taxation3. Parallel with this the services transformed from first individual

1 The situation comes clear from the other point of view when we look at the meaning of the tzedakah. E.R.Achtemeier explains the meaning of tzedakah as follows: ”Righteousness as it is understood in the OT is a thoroughly Hebraic concept, foreign to the Western mind and at variance with the common understanding of the term... righteousness is in the OT the fulfilment of the demands of a relationship, whether that relationship be with men or with God... Generally, the righteous man in Israel was the man who preserved the peace and wholeness of the community. because it was he who fulfilled the demands of communal living... the OT sets over against [the righteous]...the evildoer, the wicked...because he destroys the community itself by failing to fulfil the demands of community relationships.” (Achtemeier 1986,80f). In fact the whole concept should be understood in the context of a nomadic lifestyle. The main concern was always the survival of the tribe and the family. A righteous act was an act that strengthened unity and helped the tribe to survive. 2 Loewenberg 1994,195ff; 1995,308f. In the Torah there is a continuous tendency to underline that God is not neutral - he is always on the side of the ‘strangers, fatherless, and widows’. This tendency in the Torah has much older roots and seems to have been a general ideal in ancient Near East. Similar rules can be found already in the law codices of Urukagina from 2400 BC and Hammurabi from 1700 BC(Aejmelaeus 1991,39). Vonhof mentions the seven acts of charity that were important in Egypt: ”feeding the hungry, watering the thirsty, clothing the naked, accommodating the strangers, freeing the prisoners, healing the sick and burying the dead.” (Vonhof 1962,11.) The other emphasis in the Torah was that Israel was in debt to God because of the redemption from Egypt and tzedakah was the way God wanted the repayment: ”Love ye therefore the stranger: for ye were strangers in the land of Egypt.”(Deut 10:19) 3 An interesting detail is that taxation(according to Josephus) seemed to start among the Jewish urban sects. Loewenberg 1995,315. 24 activity to voluntary (often religious) organisations and then to government services. However, Loewenberg points out that these developments were neither linear nor spiral but cumulative. In other words, the old forms existed along with the new ones.1

The communal services emerged during the time of the Second Temple2. An early attempt was the system of a secret chamber. Pious people left gifts for the poor in a certain room and later the poor ones came to take what they needed. There is no information on how effective this was. The first widely used form was the communal soup kitchen, tamhu’i, which delivered bread to the poor3. The second was the communal charity fund, kuppah, which gave weekly grants to the poor. Along with these there were relief projects such as public works. However, it should be noted that the government had no responsibility for the welfare of the poor people - it was the responsibility of the community. In the fund-raising the tithing became the main source of revenues for the communal funds although there were campaigns for fund-raising as well.4

In the development described above there are some important elements for the theory of nonprofits. We have to remember that the Jewish kingdom was independent only during a short period between 161-63 BC. Only at that time the Jewish religious authorities had a state authority status. At other times they were separated from the state administration. Although Jews had their own legislation,

1 Loewenberg 1994,199f; 1995,308. 2 Second Temple refers to that temple which was built after the captivity of Babylon in c.a. 515 BC. The period ended when Romans occupied the country in 63 BC. 3 The amount per person was almost the same as what an unskilled labourer could buy with the salary for his six member family. Loewenberg 1995,316. 4 Loewenberg 1994,200-203; 1995,314-318. Although Loewenberg regards Matt 6:1-2 as a misunderstanding, I think that in that passage Jesus was opposing such philanthropy where the names of the givers were published. Anyway, it shows that the concept of modern sponsorship is not anything new but can be found in ancient Judaism. 25 the Jewish authorities were not (in the strict sense) part of the public sector. This became more clear after the destruction of Jerusalem in 70 AD after the Jewish revolt. The Jewish institutions grew on third sector basis. Similar developments can be seen among many peoples with a strong ethnic identity but lacking an own state1.

The Christian church adopted the Jewish model of philanthropy. The system was so effective that emperor Julian (361-363 AD) wrote that ”it is disgraceful when no Jew ever has to beg and the impious Galileans [Christians] support not only their own poor but ours as well, all men see that our people lack aid from us.”2

It can be seen that Loewenberg paints a picture in which there are two models of philanthropy, namely individual charity and religious institutional activity. Further he points out that they are not modern but have roots in antiquity. Actually, he states this quite openly: ”Philanthropic institutions were not invented in the nineteenth century but were already known in antiquity.” If we accept his argumentation it surely has implications to our understanding of the field of the third sector. Even if we see a remarkable growth of different kinds of NPOs and NGOs in 20th century, we cannot say that it is a modern phenomenon. Instead, we have to ask what is there in modern society that favours organising services in third sector basis?

Loewenberg’s theses also resonate with a theory in social movement studies, namely Ann Swidler’s thesis of

1 Even if the political organisations are excluded (PLO, IRA, Sinn Fein and others) there are a great multitude of cultural organisations for the Palestinians, Curds, Sami, etc. The link between minorities and the amount of nonprofit organisations is focused more deeply in the section of economical theories and international comparative theories. 2 Epistle 22, cited by Sperber 1991,263 and again in Loewenberg 1995,319. 26 culture as a tool kit1. According to her, people use rituals, symbols, stories, and world views to construct strategies of action. Thus, the prevailing model enables people in organising their affairs. Another point is that just as organisations reflect the time of their birth2 the models also reflect the cultures in which they have been formed. This does not mean that I would claim these models to have remained unchanged. Instead it should be assumed that they have quite a high inertia. They may remain even if the possible religious basis has vanished away. It is a similar phenomenon to the case of holy places and holy days. They are often adapted by the new religions and cultures that replace the old ones3.

It seems that for Loewenberg nonprofit organisations in ancient Israel were extensions of individual charity. The sector was a form of co-operation that did not require state activity but did not deny it either. Philanthropy and poor relief were not state responsibilities in this realm except when poverty threatened the stability of the state itself. Neither were they activities of the market. The market came into the picture only when there was a need for fund raising campaigns. Even in that case the responsibility of the services was not on market but on religious institutions. An important point in Loewenberg’s thinking is the notion that different forms of charity do not compete with each other but complete each other.

If we reflect on these old Jewish ideas, that Loewenberg introduces, we can see that the ideas have been living in the social ethics of the Christian Churches through centuries: the monasteries have been the centres for care and hospitality and parishes have been involved in local charity. Although there were only seldom

1 Swidler 1995. 2 I come to this later. 3 Good examples are the status of Jerusalem (originally Canaanite, then Jewish, Christian and Moslem holy city) or Christmas (originally a mid winter festival in many cultures). 27 systematic efforts to serve the whole population, the ethical basis planted in philanthropic efforts emerged continuously. Thus, the teaching of Loewenberg for a scholar of international NGOs is that the values NGOs hold are old and deep rooted in European societies. The other lesson is that behind philanthropy there often lies individual religious commitments. Charity begins many times from an individual actor who faces the need and helps because of an inner command.

In summary of Loewenberg’s articles it can be said that they are social historical studies and that their focus is on the roots of the phenomenon of philanthropy. Thus, they are also cultural historical studies which describe how philanthropy is linked to Semitic religious values. As we have seen, his focus is mainly on macro level and he explains the changes in philanthropy from the structural changes of society. He does not openly express a metaphor for the nonprofit organisation, but implicitly a model for NPOs is a synagogue that runs charity activities. Loewenberg’s articles present two models for philanthropy: individual charity as a religious act and collective philanthropy in the framework of a religious body. However, these are not the only models that have emerged in the history. In the next chapter I present some of the other models.

2.3. Three Models of European Third Sector

Western Europe has had essential non-state community organs for centuries. Foundations, guilds, universities, etc. have been part of the European everyday life and philanthropic system. The church has matured European philanthropy through its monasteries, fraternities and local parishes. In Europe there has almost always been some co-operative arrangements between private philanthropy and state legislation. Here we must remember 28 that it is sometimes hard to speak of states in the modern sense of the word when we look the societies in Medieval times. In most cases the state played a minor role compared to the Catholic Church in the field of charity and in education. When the secular state gained more power, the strategy of the Catholic Church was to limit it as much as possible. Helmut Anheier summarises the roots of the European third sector as follows:

To some extent, the third sector in European societies is both the terrain and result of the conflict between organized religion, political opposition, and the state over the division 1 of labor and spheres of influence.

Thus, one of the main questions in the historical reconstruction of the role of the European third sector is ”how the roles of the church, the state, the family and the third sector have been understood during history?” These frames of responsibility have, in Berger and Luckmann’s terms2, been routinised and have become self evident.

As I mentioned before, the history of the European third sector still waits for its writer. Until that it can perhaps best be viewed through the history of the development of education. In the Encyclopaedia Britannica’s Macropaedia there is a beautiful joint article on the history of education3. The parts that deal

1 Anheier 1992,50. 2 Berger and Luckmann 1972. 3 On the philanthropy sector there is Heinz Vonhof’s Herzen gegen die not [The Heart Faces The Need] from 1960 (I have used the Finnish Translation from 1962). It is a popular style history of charity without scientific references but in spite of its pathos it gives one interesting view to the subject. See also bibliographical notes of James Leiby’s work on charity organisations (1984). However, I have not found anything on, e.g., ancient Gallic, German or Scandinavian education or philanthropy. On the other parts of the world I recommend the edition of Warren F. Ilchman, Stanley N. Katz and Edward L. Queen II: Philanthropy in the World’s Traditions from 1998. On the New Era there are several studies on British philanthropy like F.M.L. Thompson’s edition Social Agencies and Institutions which is volume 3 in The Cambridge Social History of Britain 1750-1950 from 1990. 29 with antiquity and Europe give a good view to the role of the third sector in the European education system. As I mentioned before I focus on the role of religion in the formulation of different models of sharing responsibilities. The oldest of the models can be found in ancient Rome.

2.3.1. The Catholic Frame of Responsibilities

ANCIENT ROME gives the first model for an education system. Although Christians adopted the Jewish model of philanthropy, they did not adopt the Jewish education system that was related to the Synagogue. The model was taken from Rome. Henri-Iréneé Marrou and James Bowen describe how the education in Rome was a responsibility of family. Both parents took care of the education till the age of 16 when the military education began1. This early model remained the basis for their education system, but it was modified according to the Greek system. In Greece the education of the nobles was given in semi-public institutions which relied on the generosity of citizens. Rome got a network of schools of which the primary schools were all private but many grammar- and rhetoric schools became public institutions supported either by private donations or municipal budget.2

As we can see, the actors in the field of education3 in the European antiquity were family4 and nonprofit organisations. The state and the Church played a minor role at thas time5. This tradition can still be seen in the Catholic social ethics.

1 This was the model of boys’ education. Girls were educated mainly at home. 2 Marrou & Bowen 1994,9-12. 3 As well as in philanthropy. 4 An interesting study would be how the strong legal status of the family in ancient Rome has left its footmarks to the latter solutions of society. Can we, for example, trace the roots of the subsidiarity principle to this legal tradition? 5 However, the state and religion cannot be totally separated because religion in many cases was a concern of the state. 30

MONASTIC and episcopal schools changed the role of the Church. Pierre Riché and Bowen note that the supremacy of the Church in education was cemented when Charlemagne ordered that ”in each bishopric and each monastery let the psalms, the notes, the chant, calculation and grammar be taught and carefully corrected books be available1.” In time the significance of the monastic schools decreased because they closed their doors to those who did not want to become monks. The education of lay people was organised in urban schools and universities2 which were organised under the protection of the Church3. The importance of the medieval schools and universities is that for centuries they legitimated the thinking that education belongs in the territory of the Church which was independent from the state. The depth of this attitude can be seen in the German Cultural struggle which I deal with after introduction of the Lutheran model of responsibilities.

2.3.2. The Lutheran Model of Responsibilities

THE REFORMATION revised the European education perhaps more than any other period of time. Ettore Gelpi and Bowen note that when Martin Luther wanted to create educational institutions that were open to masses he realised that they ”would have to be public and financed by citizens4.” From this time we have a new model for education, namely that education is a responsibility of the state. The

1 Capitulary of AD 789 according to Riche & Bowen 1994,18. Vonhof describes how Charlemagne was also active in the field of social welfare. He was the first European monarch who organised charity on the legal basis. He was in this sense a forerunner of the modern welfare state. Vonhof 1962,43. 2 An important detail is that the autonomy of the universities comes from the autonomy of the Church. Universities got the similar status as the monasteries and fraternities. The other root of the independence of the universities was in the Medieval thinking that accepted the idea of a building as a juridical person. On this, see Le Roy Ladurie 1978. The Finnish church legislation still holds the concept of ‘land of the church’. On the development of the concept of juridical person, see Coleman 1974,16ff. 3 Riche & Bowen 1994,18-21. 4 Gelpi & Bowen 1994,29. 31 teachings of Luther laid the foundations of the legitimacy of the modern welfare state1. Contrary to elitism of humanism, Luther stressed everyone’s right to read and understand the Bible. This also meant that basic literacy was a right of everyone. From this basis new schools on the behalf of princes and towns were founded throughout Germany. Similar attempts were formulated in other wing of the Reformation, namely in Calvinism as well.2

THE THIRTY YEAR WAR left a widespread ill feeling towards high dogmatism and there was a trend away from church control. According to Ipfling and Chambliss this took two forms, namely Pietism and Enlightenment3, which played important role in future developments. The first stressed individual piety and the second vowed in the name of ratio (reason). This trend was accompanied by the fact that the significance of universities had diminished for two reasons. First, they had suffered from the religious wars. Second, their curriculum had remained too classical. This led to a situation where the state sponsored academies took the lead in the field of sciences. Especially Halle’s Institutions4 became significant actors in developing new models for the state, Lutheran churches and the third sector. Halle became the leader of academic thought for the whole 18th century. However, Halle was not only a centre of education but a centre of new models for poor relief as well. In Halle these two aspects were inseparable.5

1 Luther expressed his main theses in An die Radsherrn aller Stedte deütsches Lands: Das sie christliche Schulen affrichten und hallten sollen (To the councilmen of all cities in Germany that they establish and maintain Christian schools) from 1524 (Luther 1955a) and Dass man Kinder zur Schulen halten sollen (Exhortation that children should be sent to school) from 1529 (Luther 1955b). 2 Gelpi & Bowen 1994,29ff. 3 On this see McManners 1990,266-299. 4 On Pietism, its leaders and Halle Institutions see entries in ODCC 1997,636(on Francke), 1284f.(on Pia Desideria), 1286f.(on Pietism), 1528f(on Spener). The articles in the book also include fine bibliographies on items. 5 Ipfling & Chambliss 1994a,36. 32

Aage B. Sørensen has studied the influence of Pietism on the Nordic welfare model. According to him, the influence of Pietism is threefold. First, it strengthened state intervention into fields that had previously been a territory of the Church. Second, it established a Protestant tradition for small clubs and independent organisations. These organisations and their descendants formed the first nonprofit organisations in the Protestant part of the world1. Third, Halle’s Institutions enabled central administration to be less dependent on land owning nobles by supplying educated civil servants to states. This educated staff was inspired by Pietistic ideas and made the first attempts to create welfare states2.

In Northern European thinking the Lutheran emphasis on the responsibility of the society created the Nordic welfare system in which the state is the major actor in health care, social care and education. Luther’s teaching of two regiments legitimised state intervention into the fields of education and philanthropy which had been church territory before. The issues of practical reason belong to the secular authority and the divine issues to ecclesiastical authority.

On the other hand, Luther’s teaching of an individual’s right to read and interpret the Bible resonated with some ancient ideals of Nordic democracy and together with other factors they inflated that all Nordic countries became Lutheran. This is, of course, a more complicated issue than presented here. Although Luther’s ideas resonated with democracy, his attitude to please the nobility was totally opposite to this. This gave to the rulers a possibility to use the Reformation for their own purposes, (e.g. Gustav Wasa in Sweden). The outcome of the struggles in the era of the Reformation was the principle

1 See, e.g., Auguste Senaud’s article ”‘YMCAs’ Before the YMCAs”. Senaud 1955. 2 Sørensen 1998. 33 quius regio, eius religio. This meant in practice that the monarch became the head of the church. Thus, the Lutheran church became part of the state bureaucracy and much of the poor-relief of the society was organised through local parishes. This relationship can still be seen in Denmark and Norway where the Lutheran church is not independent but under the state government1.

When Salamon and Anheier refer to the Nordic welfare model, they seem to forget the understanding of state in these countries. In Nordic countries the government was something that was not distinct from the people as it was in southern Europe. The ancient democracy of Vikings and Finns consisted of elected kings and local and national parliaments. On the local level democracy was most clearly manifested in the practice where free peasants had a right to choose their own vicar instead of getting a pastor that has been sent by the bishop. The key point is that the idea of common responsibility and common decision making was deeply rooted in the icy soil. When the state is seen as a common enterprise, it is no wonder why it has been seen natural to organise affairs first through parishes and then through municipalities.

2.3.3. The Clash of Frames and the Emergence of the Subsidiarity Principle

ENLIGHTENMENT, although cosmopolitan by nature, paved the way for nationalism and nationalistic tendencies especially in education. Ipfling and Chambliss note that the idea of state dominance was the primary common element that got firm ground in almost all European countries, Britain being the major exemption. In the absolutist states the monarchs realised the benefits of public education in propagation of the idea of nation, obedience, and training civil servants and merchants.2

1 The Evangelical Lutheran Church in Denmark 2000; Church of Norway 2000. 2 Ipfling & Chambliss 1994b,37ff,42. 34

BISMARCK’S GERMANY is often said to be the classic model of the secular welfare state. Anheier notes that during the years 1871-1891 the struggle culminated in the Kulturkampf (cultural struggle) between chancellor Otto von Bismarck and the Catholic regions. It was a struggle for the division of labour and influence in the fields of education, culture, and welfare. In 1891 pope Leo XIII sent his encyclical Rerum Novarum which advocated local solutions to social problems. Forty years later pope Pius XI sent his encyclical Quadragesimo anno (Forty Years) where he continued the ideas of Leo XIII and launched the principle of subsidiarity.1

Anheier underlines the centrality of the Catholic social ethic in the formation of the German welfare system. This ethic taught the subsidiarity principle according to which ”the larger unit (the state) should assist the smaller social unit (the family) only if the smaller unit can no longer rely on its own resources2.” This also implies a hierarchy which goes on from the individual, family, community, church, and state. The principle contains two important elements. First, the larger unit is not allowed to take responsibilities that the smaller unit can handle. Second, the larger unit must assist the smaller unit in taking care of its responsibilities. In this way there is both the protection from the state and the responsibility of the state.3

The Catholic social ethic has been based on Aristotelian concept of the good life4. This ethic has seen the concept of righteousness as a property of

1 Anheier 1992,33-37. Also Chambliss 1994,46. 2 Anheier 1992,32f. 3 Anheier 1992,33f. Most politicians, at least in Finland, have misunderstood the concept of subsidiarity when they point only to national versus EU decision making. They forget that subsidiarity goes all the way from top to bottom and it is not only question of local responsibilities but about state responsibilities on the lower levels as well. 4 Aristotle 1908-52. 35 individuals but not as a property of communities1. In this thinking the focus is on the actor. With the moral codes the society tries to grant that there is enough individual philanthropy to meet the needs2. This has been accompanied by the vague understanding of the state. State has been something imposed on people, not an enterprise of the people. Especially before the modern era the state was something which was far away. Additionally, different wars shifted borders so often that state was not a stable basis for such important issues as education and welfare. From this point of view, family and parish are the more near and stable institutions and they have traditionally carried the main responsibility of people’s welfare. The important point here is that this has been seen as the natural way of organising things. What Salamon and Anheier say about corporate welfare states is not opposite to this thinking. On the contrary, the role of religious based welfare agencies arises from seeing their role as natural and self evident.

2.3.4. The Anglo-Saxon Protestant Frame of Responsibilities

THE BRITISH SYSTEM is a combination of the Catholic and Lutheran traditions and it was developed in eighteenth century England. Bowen and Gelpi note that although there were attempts for public education at the times of Henry VIII and Elizabeth I, education was regarded as entirely the concern of family or philanthropic enterprise. The state hesitated to intervene in education until the midst of nineteenth century3. In the British model, the different societies became to play major role in education, science and in philanthropy. The Royal Society in England as well as the French Academy in France, began

1 In Aristotelian ethic other people are seen in relation to an individual’s own good life. Accordingly, a human cannot live a good life if she/he treats others badly. This idea has been dominant in Catholic thinking through Thomism. 2 Kopperi 1996,224-227. 3 Gelpi & Bowen 1994,30; Chambliss 1994,47f. 36 as an informal gathering of famous men1.

Pat Thane describes the reasons for the British system. He mentions that when the crown had not such competitors as the continental monarchs had, there was no need for strict centralised administration. The landlords were loyal to the crown even in the case when they got a relatively large amount of power. It was in a way, decentralised centralism. This led the British administration to be indirect and based on local governance. The main idea was that the central government creates the framework in which independent institutions can act. Local municipalities had large local autonomy and judicial power. The landlords served as unpaid local Justices of the Peace. Taxation was a typical example of decentralised administration. There was no direct income tax (except temporarily at war times). Instead, the landlords collected the taxes in rents and paid the crown its share. The poor relief was organised in local parishes as well. However, this was only in rural areas. When towns grew, the better off citizens did not turn to the existing municipal corporations to handle the emerging problems but established free associations of their own. These kinds of associations were established for street-lightning, refuse removal, etc. In general, the belief in local responsibility was strong and the dual model of coexistence of municipals/parishes and associations became the Anglo-Saxon way of organising common issues.2

E. Blake Bromley gives more light on this belief in local responsibility. He states that as in the case of the Lutheran territory, the Reformation has enormous impact in the British isles as well. The common feature was the attempt to eradicate poverty. Bromley writes:

The Puritans of Tudor England (led by wealthy merchants) wanted to do far more than relieve suffering and poverty. They were

1 Ipfling & Chambliss 1994e,35. 2 Thane 1990,1-8. 37

content to do nothing less than the eradicate the conditions which gave rise to poverty and sickness and accomplish a social reformation. Although this zeal for social change was religiously motivated, these merchants could see that the church was neither able nor ideally suited to solve the problems of their society and needed a legal mechanism to implement their secular 1 solutions, the charitable trust.

So, when in the Lutheran territory, the tool for work against poverty was the church, in Britain it was charitable associations. Basically, there was no big difference. In both areas the society was seen as made up of individuals2. In both areas it was seen that the responsibility of the poor was on the society. Fundamentally, the resources came from individuals. The difference was the channel through which these funds were distributed. In the British system the principle was that as long there were private funds, there were no need for state intervention. If there were not funds enough, the responsibility was on the state3. Bromley writes:

The Statute of Elizabeth I should be celebrated not as the classic starting point and quintessential statement of the law of charity but as the beginning of philanthropy as a voluntary partnership between the citizen and the state to fund and achieve 4 social objectives.

Bromley notes that in the time of the Elizabethan statute, ”the preamble classified as charitable things which relieve the state of expenses which it would otherwise incur5.” However, the understanding of charity changed later in two respects. First, the Protestant work ethic arose the problem of ill-spending of endowments which was not a question at all before. Second, there emerged a tension between ‘entitlement’ and ‘charity’. In other words: ”It is a cardinal principle of charity law that charitable funds should not be used in place of

1 Bromley 1994,173f. 2 This was in contrast with the medieval Catholic view of society like a human body where all members have their proper place and where the aristocracy was in the leadership position - in general as well as in philanthropy. Leiby 1984,530. 3 Bromley 1994,175. 4 Bromley 1994,176. 5 Bromley 1994,178. 38 benefits to which an individual has a statutory right”.1

Thus, the Lutheran and Anglican view of responsibilities grew basically from the same ground, namely the idea that the roots of poverty should be attacked. The solutions were different. However, there were also ideological differences between these two areas, namely the attitude of Labour Movement towards the church and Christianity in general.

2.3.5. The Labour Movement and the Church

The Labour Movement explains some differences between the British model and the Nordic systems which both had long local governance traditions and parliamentary systems. In Britain the Labour Movement got its early leaders2 and legitimisation from Methodism and from its rebellion against the Anglican Church. In Germany and the Nordic countries there was not such opposition to the Established Church (either Catholic or Protestant3) because the revival movements remained inside the Church. In this situation the Labour Movement did not gain religiously articulated legitimacy but the movement had to find its legitimacy elsewhere. This lies behind the greater hostility of the Labour Movement (and especially of its communist wing) towards the Church in the Lutheran territory than in Britain. The result was that in the Lutheran territory the attitude on the third sector was more negative. The philanthropy sector was seen as a fortress of conservatism and ‘an armed daughter of the

1 Bromley 1994,178f. 2 ”Most of these early leaders took their gospel from the Bible and their nonconformist churches.”(Brand 1974,16) ”Methodist class meetings and lectures had been a training ground for political radicals and early trade union organizers.”(Pelling 1965,129). According to Leonard Smith the relation between Labour Movement and Methodism was first argued by Elie Halevy. On the topic see Wearmouth 1957; Smith L. 1993. 3 Cuius regio eius religio-principle. 39

Church’1.

Social Democrats favoured the strong involvement of the state in welfare politics. Combined with old Scandinavian and Lutheran traditions of democracy, this led to state dominance in Scandinavia. The ultimate model of the state supremacy has been Sweden and its folkhem (people’s home), which was created under the Social Democrats after the Second World War. Swedish scholars evolved the Keynesian model of the welfare state2 and ”from the 1960s to the 1980s Nordic countries believed that they had created the best social policy system in the world3”. Its influence and regulation reached to almost every sphere of human life. This in turn shifted the attitudes towards the welfare state in the 1990s, but before entering into that period, it is necessary to review the developments in the US.

2.4. A Country Where Everyone Form Associations

The United States has been seen as specially hospitable towards the third sector - or nonprofit sector, as it is called there. Since Alexis de Tocqueville’s notion that ”Americans of all ages, all conditions, and all dispositions constantly form associations4” the United States has been seen as the major home of the third sector. The American model was founded on the British basis but - as a special spice - there was a strong allergy to central administration.

Although the US has been treated in international comparisons as an entity, it in fact has several competing

1 Seibel & Anheier 1990,8. 2 Pekkarinen 1993,102ff. 3 Anttonen & Sipilä 1993,435. 4 Tocqueville 1945(1835),115. 40 traditions. John C. Schneider1 has argued that there were three different tiers in the country. These tiers consisted of different groups and had different attitudes towards the state and towards the private corporations ranging from benevolent to hostile in both cases. Peter Dobkin Hall notes that similar diverse attitudes could also be seen in the policies of leading political parties2.

Hall emphasises that before the Civil War there were two major groups that created both for-profit and nonprofit organisations, namely the evangelical network3 and Boston merchants. These two groups created organisations, developed administrative skills administration, and created personal and organisational networks that enabled their work. Hall4, DiMaggio and Anheier5 stress that the evangelical network was a result of the New England urban elite. However, this is only one side of the coin. They do not see the impact of lay religiosity that was the result of the Second Awakening. They are right that some institutions, like Harvard and Yale, were established by the New England Puritans but they fail to see the impact of the religiosity of the outcasted of New England, namely Baptism and other free church activities6. In fact it was free church activity in the West that made the US a Christian country. Established churches were much slower in their moves.

1 Schneider 1996,198-203. He quotes Daniel J. Elazar (1972) who defined the groups in these tiers to be East Anglian Puritans in the North, Quakers in the middle, and traditionalists in the South. Schneider also quotes Raymond D. Gastil (1975) who argues that the cultures of the first settlers in each region tended to dominate the latter regional culture. 2 Hall 1987,6f. 3 On the religious context of the pre civil war situation see, e.g., Yoder 1993(1954) and Smith T.L. 1976. In short the situation was that all European schisms were planted into American soil. It was the Awakenings and missionary needs that brought some churches together. 4 Hall 1987,7. 5 DiMaggio & Anheier 1990,141. 6 See Handy R.T. 1970,379; Hudson W.S. 1970,211f. By the 1800s the Baptists were the largest denomination in the United States. Corbett 1990,52. 41

Hall, DiMaggio and Anheier underline that the rising organisations had close links to the urban elite. Upper class people were in boards of trustees or as patrons and in this way maintained their monitoring ability and status in the society. DiMaggio and Anheier even suspect that NPOs created by other status groups (workers, ethnic and religious communities) ”are often less stable, less likely to incorporate, and less likely to claim community-wide missions than those created by the wealthy1”. This again is only partially truth. If we look at the older studies of religious movements, we see that religious sects (with their organisations) are often products of lower classes2. The asceticism in the movements generates prosperity and mobility towards upper classes. Although this picture is one-sided a question remains: were the founders of the nonprofits already elite when they founded the organisations or did the organisations enable them to join the elite?

In the first half of the century the ”Second Awakening” spread over the country. It created a host of interdenominational societies. According to Don Herbert Yoder these societies can be divided into two classes. The first includes those with missionary motive3. The latter was a combination of those societies that aimed to ”reform the American society in the image of American Protestantism, with its Puritan and revivalist undertones.” There were societies for temperance, anti- slavery, peace, and nearly for every reform.4

The evangelical network developed administrative

1 DiMaggio & Anheier 1990,141f. 2 This was the main line among church-sect-theorists before the emergence of new religious movements. One of the leading theorists was H. Richard Niebuhr. See Niebuhr 1954. 3 American Board of Commissioners for Foreign Missions (1810), the American Educational Society (1815), the American Bible Society (1816), the American Sunday-School Union (1924), YMCA (1850). 4 Yoder 1993,235. The work of these societies and churches was so effective the church membership grew from 7% in the beginning of the 19th century to 57% in 1950. Latourette 1957,19. 42 skills and organisation cultures that facilitated their work. The ‘secular wing’ of the movement showed how religious ethics were transformed into practical policy. It helped committed laymen to have contacts with political power. These laymen, in turn, tended to find themselves in ”positions of economic, political, and cultural leadership wherever they settled.”1

When the Civil War broke out the Union had adequate administration and leadership neither in the government nor in the Army. In that situation people from the evangelical network and Boston merchants were recruited to reorganise the Union Army and the government. The result was that

the Union’s victory was seen by its organizers and significant element of the public as a legitimation of the claims of the 2 organized private sector.

This ensured, according to Hall, that the basic welfare and educational institutions were formed on a private nonprofit basis. When the European governments launched new services to their citizens in order to calm down the challenges of socialism, America developed a model called welfare capitalism in which the nonprofit organisations played a major role. Private companies supported voluntary organisations which in turn launched the welfare projects.3

The welfare capitalism lasted until the 1930s when the great depression hit the country. The basic weakness of welfare capitalism was that in the critical situation the companies first cut out their donations to nonprofit organisations. In this situation the state had to rescue the welfare service sector. The tax legislation, that

1 Hall 1987,7. 2 Hall 1987,8. 3 Hall 1987,8-15. 43 enabled tax substitutions, traces from this time.1

After the Second World War the state became the biggest donor of the nonprofit sector although the services were launched by nonprofit organisations. Thus, the funding and delivery of services were separated. At the same time there also emerged criticism against the private welfare model. As a consequence, there were attempts to regulate both the activities of nonprofit organisations and the federal aid to them. This criticism led to the ”1969 Tax Reform Act, which placed the foundations under strict federal oversight.” This in turn was one major catalyst to the emergence of nonprofit studies to which I come in the beginning of part two.2

2.5. Privatisation Boom in Western Democracies

THE CRISIS OF THE WELFARE STATE has altered significantly the whole question of the third sector. The oil crisis in the 1970s caused many western states problems of payment deficit. At the same time the rising costs of education, social service and health care led governments to focus on the costs. Martin S. Feldstein notes that in the US ”in the three years from mid-1967 to mid-1970, the cost per patient-day rose some 42 per cent.” However, he points out that the discussion did not focus on why this happened but only on how it happened. Obviously, the discussion in general created negative attitudes among taxpayers.3

Some time later the rise of neo-conservatism led to questioning the whole basis of the Keynesian model of the

1 Hall 1987,15ff.; Andrews 1970,646. 2 Hall 1987,18ff. 3 According to Feldstein, the components of cost are more a result than a cause of higher prices. The main cause for higher costs was the pressure of rising demand (created by Medicaid) and the low net price that a patient had to pay. Feldstein 1971,870. 44 welfare state. Lester M. Salamon and Alan J. Abrahamson1 note that this had assumptions about the third sector, too. Following neo-liberalistic ideas Ronald Reagan in the US and Margaret Thatcher in Britain justified the cut-offs of public expenditures by claiming that state activity is doing harm to private philanthropy and enterprise. However, as Burton A. Weisbrod states, the output of the privatisation policy was harmful to the third sector. Since the state was the major donor of third sector, the cut-offs heavily injured the NPOs. At the same time, the US Economic Recovery Tax Act of 1981 had an effect of reducing private donations because it raised the marginal price of a donation for the donor2.

Reaganism-Thatcherism has been the dominant doctrine during the 1980s and the 1990s especially in the United States and the United Kingdom. This meant that the state reduced its activities either by moving the responsibility to municipalities or by privatisation. When the doctrine was tributing free market, this often meant that the focus was on the private business and not on the nonprofits.3

The political left has been hesitant to surrender the welfare services to the for-profit sector. This has led to new interest towards the third sector among the political left which traditionally opposed it. The basis of the new interest is that with public subsidies and it being under public control the third sector is supposed to maintain the welfare services on a satisfactory level. The other reason for the new interest lies in the emergence of new social movements which favour grassroots activities and claim that the public sector has moved too far from the citizens.

Thus, in the 1980s and 1990s the political left and

1 Salamon & Abrahamson 1982 2 Weisbrod 1988,92ff,103f; Taylor 1992,151-155. 3 Hudson P. 1998,452f. 45 the political right have found each other as they see the important role of the third sector. However, they come to the same point from different directions. For the political right, the third sector fits into the model of liberal society in which state has a limited role. For the political left, third sector is a rescue from market forces that enables democratic control of services. On the other hand, it is also a field where direct democracy can be implemented.1

2.6. Discussion on the Historical Studies

The main research question of part I is: ”How are the third sector and other related concepts framed in different cultures?” In this sub-chapter I try to give a summarised answer to that question.

As it was mentioned in the beginning of this chapter, the models of society lie deep in history. Philanthropy and education have been territories of religions for milleniums. The models that Judaism developed have been quite stable during the history. The basic reason for this, as Reijo E. Heinonen has argued, is that religion serves as the value memory of a culture. He writes:

In important decision making situations, when basic statements or new orientation is needed, people often return to these deep values or principles and maxims that are derived from these 2 values .

Thus, religion sacralises and stores values that the society sees as important. If these values are written in the sacral texts, they are again and again reflected on in new situations. In this sense the old Durkheimian notion about the relationship between religion and society has

1 Trägårdh 1999. 2 Heinonen 1997,40. My translation. 46 some relevance1.

When the religions do not exist in a vacuum, but interact with the society, the teachings of the holy books are interpreted again and again in new contexts and times. Thus, the Christianity today is quite different in different parts of the world and quite different from the Christianity of the Apostles. This means that the explanations of righteousness and the good life vary according to the context. Over time these explanations become self evident to people and become a part of their world view. It is important to note that even in the secularised world some basic religious ideas and customs are taken for granted. For example, we have a linear understanding of time in the West, people follow the Christian calendar and see it natural that they have free on Sundays.

More fundamental than these everyday habits is the impact of theologians during the last two millennia on philosophy and social ethics. Weber’s notion of the connection of capitalism and Protestantism reflect the idea that in different cultures different ways of thinking are seen as natural. This is what Peter Berger and Thomas Luckmann have meant with the routinization of thinking2. Routines are not challenged but are taken for granted. The thesis of Berger and Luckmann in a nutshell is that when an issue is once dealt with, it is ‘stored’ into symbols that form the symbolic universe3. Although symbols are abstract, they can be ‘brought back’ to everyday life4. This also happens when old models of organising

1 However, this does not mean that religions can sacralise any values that society sees important. Heinonen’s theory differs from Durkheimian thinking at the starting point. According to Heinonen, value memory refers primarily to those values that have their roots in religious ethics. This means that his starting point is religion which supplies ethics to the society. In Durkheimian thinking religion is a reflection of the values of society. 2 Berger 1972,56ff. 3 Berger 1972,113-122. 4 Berger 1972,55. 47 philanthropy and education are used. The variation between the models of different countries depends much on the different symbols through which people frame their world.

The well-known thesis of Samuel P. Huntington about the clash of civilisations is on this line as well1. The point of his thinking is that people in different civilisations construct their world view differently. Jaana Hallamaa has argued how the different attitude towards beggars in North and South Europe is dependent on the differences in Catholic and Lutheran doctrines. She states that the Aristotelian concept of the good life2 in Roman Catholic areas sees beggars as important because people can then do good works. In this context the face- to-face situation in giving alms is important because both parties get something. Opposite to these good works, in the Lutheran context the fear of self-righteousness has lead to an attitude to avoid face-to-face helping. Nobody should think that giving alms could be a merit. This has led both to anonymous giving via the tax system and social care and is accompanied by the understanding of the position of an individual. In Roman Catholic countries the individual is first and foremost a member of her/his family. In Scandinavia she/he is regarded as an individual member of the society. This has implications, for example, on the situations when children are taken from their parents to be under the care of the society. In South Europe the officials are more hesitant than in the North. The other implication is on welfare subsidies that in the North are given to guarantee the individual’s life standard regardless of the wealth of one’s family.3

In this chapter I have concentrated on the impact of religion on different welfare models. This does not mean that religious ideas are the only determinants that

1 Huntington 1996. 2 Aristotle 1908-52. 3 Hallamaa 1999,179-198. 48 constitute the frame of the responsibilities of the state, the family, the market and the third sector. On the contrary, there are various other variables that sometimes resonate and sometimes fight against these models. Additionally, in the course of history, these models can interact, and a society that has been developed in one tradition borrows some elements from an other tradition. Thus, when in the 1960s the Scandinavian welfare model was transformed into different contexts, there has since the 1970s been a trend of American models being planted in European contexts. At the same time Common Law and Civil Law systems are coming closer to each other. The problem of this mix is that partial adaptations from foreign systems disturb the original system. This is because copying only one feature does not take into account the factors that balance the adopted practice in the other system. Thus, when the welfare state’s responsibilities are transferred to the third sector in Scandinavia, it has to be asked if those aspects that enable the third sector’s function in other cultures are transferred as well. On the legal level this means different tax subsidies both to organisations and donors. On the cultural level this means the status of philanthropical work and donating in society.

Another question that has emerged in this chapter is the status of the churches. When we look at the organisational arrangements in Western history we can see the important role of churches. This urges us to treat them as special entities. They form their own sector which is public but does not belong to state. In many respects churches are state-like entities which have proved to be more stable than secular authorities. Churches follow their own legislation and have their own taxing system and administration. They do not have their own military forces but in Poland at the end the 1980s we saw the ”divisions of Pope” that transformed Eastern Europe. This state-like status also means that international church federations 49 such as the World Council of Churches should be compared more with governmental organisations like United Nations, International Labour Organisation, World Bank, etc. than with nongovernmental organisations. Organisationally they are bodies of established institutions while NGOs are voluntary lay associations.

The central question of this study is: ”Why are third sector studies important in contemporary society?” I hope that this historical excursion has shown that different kinds of third sector organisations have been elementary parts of European societies since the dawn of Western civilisation. As a summary of historical studies we can say that they show how different traits of thinking influence our understanding of societies and the third sector. When these traits are combined differently at different times and indifferent areas, it is no wonder why we have so many different determinations of the phenomenon. In the next chapter I will give short descriptions of different concepts that are used in the field that lies between the state and the market. These concepts are culturally constructed and thus they frame the field differently. 50

3. Contemporary Frames on Three Sectors

3.1. Distinction Into Three Sectors

As we have seen in the previous chapter, different cultures see the role of the third sector in various ways. If the cultures frame the third sector in different ways, so do various disciplines and because of this, the concepts vary much as well. The question of concepts, and their effect on inclusions and exclusions, is one of the main issues in this Figure ¡Error! Argumento de modificador desconocido.: The State, the market and the chapter. The main third sector disagreements in definitions deal with the status of organisations that fall between the ‘pure’ sectors. ¡Error! Argumento de modificador desconocido. describes the idea of the three sectors and spheres between them.

Inclusions and exclusions in science are not only scientific tools, they are a way to use power as well1. Especially in social sciences, the results of the research construct the world by supplying frames that tell what is important in society and what is not. One example of the possible effect of the importance of determinations is which organisations are included into the third sector.

1 See discussion in Introduction. 51

This is especially important if the European Union one day harmonises its tax legislation. Below I show that the American concept of the nonprofit sector does not include mutual organisations or co-operatives while the French concept of social economy includes them. The terminological choice will have significance if it determines the tax treatment of these organisations.

The trichotomy of state, market and the third sector was defined by Amitai Etzioni1 and Theodore Levitt2 in 1973 and by the influential Filer Commission in 19773. Etzioni linked the term third sector to the convergence theory and he used it to express an alternative to the disadvantages of both bureaucracy and profit maximisation. For him the third sector was everything that was not purely governmental or profit oriented4. Thus, Etzioni’s definition also includes the boundary areas between market and state that are shown in figure 1. The important point is that for Etzioni the third sector also includes (or at least does not exclude) informal networks and families. For the Filer Commission the concept was a suitable slogan to draw public and scholarly interest to the philanthropic organisations.5

Etzioni’s definition can serve as a starting point of determining concepts. It is wide enough that it does not accidentally exclude some interesting phenomena. However, it is so wide that it has not been used much in third sector studies. The problem is that it is hard to operationalize for empirical research. For that reason most studies have been made with more limited definitions. Before I introduce them, I will discuss about the general

1 Etzioni 1973. 2 Lewitt 1973. 3 Filer Commission 1977. 4 Actually Etzioni proposed that the reference should ”be made to private (profit), governmental (state), and public sectors (not-for- profit, voluntary).” Etzioni 1973,316 (italics in original). See the discussion of public and private below. 5 Seibel & Anheier 1990,7. 52 problems of distinctions.

3.2. Problems of Distinctions

The divisions of sectors depend on the discipline and differ according to what the scholarly tradition regards as important. The first divisions were dualistic. Perhaps the oldest distinction is between sacred and secular or, from an other point of view, family and others. The most important distinction in this field is the distinction between public and private, and the third sector falls somewhere between these two.

The trichotomy of state, market and the third sector can be seen more as a way of thinking and not as a definition of organisations. It is a question of Weberian ideal types which in this case can exist as such but at many times organisations can act in all three fields. One example is a typical Finnish Lutheran urban parish. It is officially a public organisation that has to follow administrative legislation. At the same time, many of its activities are based on voluntary work and are in fact part of the third sector. Additionally, it belongs to the market because the garden connected to the graveyard sells flowers to public.

Inside the sectors there have also been distinctions that offer different views. In the public sector the division between the state and municipalities has been the main dividing line but there are also other independent organs in the public sector like central banks and in some cases universities and national churches. In the private sector the dichotomy has been the distinction between for- profit and nonprofit created by the economists. In the third sector the distinction has been made between juridical persons (associations, foundations, etc.) and an informal set of individual’s networks (family, friends, 53 neighbours1). On the other hand United Nations System of National Accounts (SNA) divides the national economy also into five institutional sectors but adds to it financial corporations and ignores informal networks 2.

The third sector organisations can also be divided into four broad classes, as Salamon and Abrahamson stated in 1982.

The first class comprises funding agencies or fund-raising intermediaries which exist not so much to deliver services as to channel resources to those who do... The second class comprises organizations that exist primarily to provide goods or services to their immediate members, rather than to society or the community at large... The third class is made up of organizations that exist primarily to serve others, to provide goods or services to those in need, or to contribute in other ways to the general welfare... The fourth category, which embraces religious organizations, may not be a separate class at all but a part of the second or third. Yet churches and other primarily religious bodies have a distinct 3 status that warrants separate treatment.

These definitions and divisions leave us with two possibilities. Either we continue to make distinctions and declare all the examples above as sui generis or we treat the market, public sector, and third sector as ideal types that are seldom found pure. More often there are different combinations of these dimensions4.

The division into three rises questions of the borderlines of the sectors. In different countries there are different understandings of what is public and what is private, what is not-for-profit and what is for-profit. One problematic institution is the church. In the US there is a free church system and churches belong to the third sector. In many European countries the Established Church

1 David Horton Smith argues that from the third sector there must be separated a fourth and fifth sector. They are the personal or expanded household sector with different informal networks and the organised sector which includes the member-serving nonprofits and the public benefit organisations. Smith D.H. 1991. 2 Anheier 1995,17. 3 Salamon & Abrahamson 1982,221. 4 Weisbrod 1988,1f. 54 is either part of the state bureaucracy1 or has an official status but is separated from the state administration2. In all cases the churches follow their own legislation and have a realm of their own. It could be questioned if the trichotomy is enough or if we need a distinction into four basic sectors in which religion is the fourth.

The churches do not form the only problem of borderlines. The whole field of sports is problematic as well. In the early days of the Olympic movement Paavo Nurmi was disqualified as a professional because of the rumours that he had got some support for his training. Now all the stars are openly professionals. In many cases football teams and other sports teams are companies in the stock market and the players are professional employees. On the other hand there are plenty of teams that are associations in which the activities are run on a voluntary basis. These can be even mixed so that the junior work is on a voluntary basis and the representative team is on a (semi)professional basis. Other examples are mutual insurance companies and co-operatives which were originally formed as organs outside the market forces but can today be bigger than their for-profit counterparts and behave equally to for-profit companies. Modern examples of co-operatives are car-pools and some attempts to organise children’s day-care. It is hard to determine whether these kind of organisations are part of the third sector or the market.

The third problem of classification is in the field of public companies like state owned post-, telephone- and bus-companies or power plants and waterworks of the municipalities. They are formally companies but their aim is to serve community as a whole and they are strictly

1 State churches of Denmark and Norway. 2 People’s churches of Finland and Sweden, Landeskirches in Germany (see Anheier 1992,36), in most cases Catholic and Orthodox Churches, and the Israeli system (see Jaffe 1992,168). 55 regulated. Their dilemma is that at the same time they are supposed to be economically effective. For example, the post cannot concentrate only on those areas that are economically profitable but it has to cover the whole country and at the same time pay profits to the state. The staff of these companies is normally nominated by elected boards and is in that way under democratic control. Often post companies are monopolies in their area but on the other hand, they are indirectly owned by their users. These and many other features determine that post companies cannot behave like normal companies but they are neither part of the ‘official’ public sector. In the so called charity law countries (the British Commonwealth and the US) there is also a tradition to see charities as part of the public sector, too1.

In addition to these borderline questions the three sectors are interact heavily with each other. The choices made in one sector influence the two others either directly or indirectly. As mentioned before, when Reagan’s government cut public expenditures and reduced income taxes in order to shift the welfare responsibility to the private sector, the result was a reduction both in public subsidies and private donations of nonprofit organisations. That forced the nonprofits to enter more and more to the market with such activities that were meant only for fund-raising and had little to do with their primary goals. Especially small enterprises saw this as an unfair competition because of the tax-exempt status of nonprofits.2

Wolfgang Seibel and Helmut K. Anheier refer to the problems of classification in the first international anthology on the research field:

Difficulties in classifying organizations by applying

1 Randon & 6 1994,41,46,51. 2 Weisbrod 1988. This interdependence is one of the main themes of his volume. 56

institutional characteristics such as ”nonprofit” versus ”for- profit” or ”private” versus ”public” are, to a large degree, the result of continuous shifts in what societies define as private 1 and public, for-profit and nonprofit.

Thus, all the definitions are temporal and depend on the zeitgeist (or cultural climate or megatrends) of the culture. They are socially constructed and they also construct the reality. This should call world view studies into the field but too often the world views of the researchers have been taken for granted. The definitions and terminology are based on how people see reality. Is it a market2, a battlefield of classes or spiritual powers, a structure, an organism, or a conversation? All of these preferences create different view of reality.3

The importance of world views can also be seen in the terminology that reflects the different cultural ways of thinking. In the previous chapter we already saw how three different models of organising the European welfare had grown. The same historical and cultural forces also play a crucial role in the formation of those concepts which describe the field that I call third sector. Below I introduce the main terms and discuss their differences.

3.3. Dear Child Has Many Names

The terminology of third sector research refers on one hand to the sector and on the other hand to the actors in the sector, namely organisations. Thus, sometimes it would be adequate to speak of etymons that are related to concepts. In some cases there are terms from these etymons for both the sector and organisations but sometimes they refer only to the sector. Thus, in the literature there are not such concepts as a third sector organisation or a

1 Seibel & Anheier 1990,9. See also Douglas 1987,44. 2 An extreme could be that a mother gives breast-feeding services to her baby and baby pays them by smile and other emotional currencies. 3 See discussion in Introduction. 57 civil society organisation. Instead, we have voluntary organisations and nonprofit organisations. This imbalance reflects again the varieties in the field. If the research focuses mainly on macro level phenomena it prefers the concepts that speak about the sector over those about the actors.

The different concepts draw boundaries of what kinds of organisations they include in the definitions and what kinds they exclude. In general, the associations and foundations are included in all concepts. Mutual organisations, self-help organisations, co-operatives, religious bodies and social movements, in turn, are treated differently in different definitions.

Below, I introduce the concepts that are used in the research to describe the sphere between the state and the market. In every subchapter I give first a short description of the concept which is followed by details.

3.3.1. Civil Society

Civil society is the oldest of all concepts related to third sector. In modern usage it emphasises, on one hand, the distinction between the official realm of the state and the grassroots activity of ordinary people and on the other hand, the distinction between the market and the life world of ordinary people. The concept includes not only all kinds of autonomous associations, co-operatives, social movements, mutual help and other informal groups but families and informal personal networks, too1. In the last 20 years the concept has lived in the debates on democratic theory between defenders of elite versus participatory models, in discussions between rights- oriented liberalism versus communitarism and disputations between neo-conservative advocates of the free market

1 Eisenstadt 1995,240; Black 1987,77; Bush Zetterberg 1996,9. 58 versus defenders of the welfare state1. The term has been used frequently but as Jeffrey C. Alexander has expressed it, civil society is a ”richly evocative but undertheorized concept2.”

The concept civil society has several connotations which depend on the scholarly tradition using it. The oldest is the ancient Greek meaning that refers to the Greek word polis. The other derives from the Medieval town system, burg. The third tradition is linked to liberalism of the seventeenth and the eighteenth centuries. The fourth tradition is from Friedrich Hegel and his interpreters Karl Marx and Antonio Gramsci. Finally, the modern usage is linked to the turbulence of the East Europe in the end of the 1980s.

KOINONIA POLITIKHE (unity of the town) and its Latin equivalence societas civilis (association of the citizens) are the original concepts of civil society. They mean the arena of politically active citizens3. The etymology of the word can be described as follows:

”κοινωνια, an abstract term from κοινωνος and κοινωνεω denotes ‘participation’, ‘fellowship’ esp. with a close bond... The group κοινων- is applied to the most varied relationships, the common share in a thing,... common enterprises, and esp. legal relations... Marriage is closer and more comprehensive... than all other forms of fellowship... friendship is also a supreme expression of fellowship. In Gk. thinking this includes a considerable readiness to share material possessions. Sharing the 4 same city underlines the fellowship of equal citizens.”

Thus, the etymology of this word emphasises the commitment to a shared destiny. In the thinking of Plato5, Aristotle6 and Cicero1 the concepts departed from the

1 Cohen & Arato 1994,3-15. 2 Alexander 1993,797. 3 Dahlkvist 1995,172; Cohen & Arato 1994, 84f; Black 1987,77. 4 Hauck 1984,797f. See also Cohen & Arato 1994,84ff. This emphasis of citizenship was also meant in John Locke’s civil government, Immanuel Kant’s bürgerliche Gesellschaft and Jean Jacques Rousseau’s état civil(Rousseau 1978). Kumar 1994,75f; Cohen 1982,25f. 5 Plato 1977. 6 Aristotle 1965. 59 intimate meaning and became expressions of the rule of the town-state. The important point is that the ancient concept meant the whole civilised society, not any distinct part of it. The opposite to civil society was barbarism2. Much of the classical and the Medieval theorising focused on the requirements and the core elements of the civil society. Key concepts were the good life3, stability and civilisation. Much of the discussion centred around the question of the independence/dependence of the state from/on the Church.4

BÜRGERLICHE GESELLSCHAFT is another etymological root for the concept of civil society. The German term originally means ‘a society of the castle/town’. It refers to the Medieval town system although it is more widely known in English as bourgeois society. However, in German there is no distinction between the words5.

Heikki Lehtonen has described the formation of the Medieval town system and gives another view on civil society. Feudalism had its vertical relationship of rulers and ruled. However, there was the horizontal counter system that was manifested in families and guilds as well. Both of these had internal interaction systems that were valid only inside of a particular family or guild. The civil society was then formed to cope with the interaction between the members of these communities inside the town. It was the sphere where an individual citizen could interact with the members of other communities. Thus, in a Medieval town the main sectors were family, guild and civil society. The difference between the state and civil

1 Cicero 1988. 2 Dahlkvist 1995,172; Ehrenberg 1999,3. 3 This Aristotelian concept became one of the most fundamental concepts of the European social ethics. Aristotle 1908-52. 4 On the development of the concept, see Ehrenberg 1999. 5 Cohen & Arato 1994,viii,97. It is good to remember that also the English word ‘citizen’ means originally ”An inhabitant of a City or (often) of a town; esp. one possessing civic rights and privileges, a burgess or freeman of a city.” Oxford English Dictionary 1970,442. 60 society was that the former meant the emperor or the king and the latter the political autonomy of the town.1

In a Medieval town it was not any more a question of such intimate relationship as in the ancient idea of koinonia which meant intimate commitment to a common destiny. Rather, it was the opposite: civil society was a sphere where individuals could act freely from their old family or guild bonds. However, it had a connotation of the public sphere and it was seen as some kind of modification of the ancient polis2.

THE REFORMATION paved the way to new theories of civil society. Martin Luther provided two important aspects into the theories of civil society. First, the concept of a common priesthood downplayed the role of the institutions3. Basically there was the individual alone in front of God without any mediating body. This notion legitimated individual independence and, as we have seen in chapter 2.3.2., facilitated the emergence of small ecclesiolae in ecclesia. The other notion was Luther’s teaching of two regimes that should not be blurred nor separated4. Ehrenberg describes Luther’s point of view: ”If the household, political life, and church affairs constitute the three ‘orders of creation’ of Christian existence, they need political order because civil society cannot generate the power, domination, and authority necessary to the life of fallen humanity5.”

LIBERALISM modified the old Aristotelian and the Medieval understanding of civil society as the realm of political life. Civil society was actually a society of free citizens. Mats Dahlkvist has argued that this usage can also be seen in the works of liberal philosophers in

1 Lehtonen 1988,33f. 2 Cohen & Arato 1994,85. 3 Luther 1520(1915,1960). 4 Luther 1523(1968). 5 See Ehrenberg 1999,62-70. 61 the seventeenth and the eighteenth centuries. He argues that

the division in the political theory of liberalism, and thus in later western thought, goes not between ‘state’ and ‘society’. When the distinction to ‘state’ is hinted or outspoken, it is the distinction to the unjust royal state, not to the hoped liberal 1 state authority.

Thus, John Locke2, Adam Smith3, Adam Ferguson4 and John Stuart Mill5 all see civil society basically in the Aristotelian way: civil society is the same as the civilisation. However, the difference both to antique and to Medieval theories was that neither the Church nor the state were anymore the center of civil society. For Locke and Smith the core of civil society was based on individual property and thus their civil society was the market. For them the state was a protective organ of the civil society. However, the distinction between the state and civil society began to appear because of the thrust for the independence of the market. Thus, when theorists of Reformation and Enlightenment aimed to free civil society from the Church, liberal thinkers aimed to free it from the state.6

IN THE NINETEENTH CENTURY the historical equation of civil society and state was broken by Georg Wilhelm Fredrich Hegel7. His theory was based on the idea that there are three spheres of social life which are also three stages of ethical development. The family is the natural phase and tends to suppress the differences between its members because of their common destiny. Civil society is the antithesis of the family and it is marked by diversity and competition. Finally, the state

1 Dahlkvist 1995,176 (my translation, italics in original). See also Kumar 1994,75. 2 Locke 1960(1690). 3 Smith A. 1976(1776). 4 Ferguson 1995(1767). 5 Mill 1987(1859). 6 See Ehrenberg 1999,84ff; 96-108. 7 Hegel 1967(1821). 62 reconciles these two. Thus, Hegel saw the civil society basically in the same way as liberalism. The difference was that Hegel emphasised the need for social and civic institutions to regulate the individual interest. Ehrenberg states that for Hegel the state ”is the final realization of spirit in history because... its ability to organize rights, freedom, and welfare1.”2

Krishnan Kumar argues that for Karl Marx3 the concept of civil society was almost equivalent to that of political economy and later he dropped the term and spoke only of society and state4. Although Marx disliked the corporatist civil society, the intermediary thinking has received backing from the Marxian philosophy and, as Jean L. Cohen puts it: ”its dislike of the institutions of modern civil society and their reduction of these institutions to mere bourgeois culture and capitalistic relations5.” In the Marxian philosophy the civil society has been something that has to be eliminated. For Marx the state was not an ideal final goal of history, like for Hegel, but an oppressive mechanism that served the bourgeois civil society. Thus, it does not mediate individual interests but is in the service of them. The civil society itself should be transformed.6 This explains why the Marxist tradition opposes both the civil society and the state.

Antonio Gramsci7 recognised the plurality of associations, churches, unions, cultural organisations, clubs, neighbourhood groups and political parties that were typical in modern civil society. These he recognised to be elements of the hegemonic system of bourgeois civil

1 See Ehrenberg 1999,128. 2 Ehrenberg 1999,122-132; Kumar 1994,76; Cohen and Arato 1994,91-116. For the critics of Cohen and Arato, see Dahlkvist 1995,191-196. 3 Marx & Engels Frederick 1975-. 4 Kumar 1994,76. 5 Cohen 1982,5. On Marx’s critique of civil society see pages 23-52. 6 See Ehrenberg 1999,132-143. 7 Gramsci 1971. 63 society. This hegemony is build on the web of interactions and connections of family, economy, law and informal norms.1 Thus, unlike Hegel, he located both family and the political sphere in the civil society. He differed from Marx by excluding economy from it. Cohen notes that ”from Gramscian perspective civil society is a site of social contestation wherein collective identities, ethical values, and alliances are forged2.” However, as Cohen and Arato note, Gramsci’s terminology is quite confusing. Sometimes he identifies civil society with the state, sometimes he sees it as a counterpart of the state and sometimes as part of the state as a counterpart of political society. For Gramsci, the civil society is the sphere of ‘cultural politics’ where the system is maintained and challenged at the same time.3

In the non-Marxian discussion the leading theorist was Alexis de Tocqueville4. His theory became the basis of contemporary American theorising of civil society. He adopted from Montesquieu5 the concept of mediating organisations that lie between the state and the individual. However, he noted that in America there was no ancien régime, but the mediating institutions were voluntary organisations that were focusing on private matters. Thus, as Ehrenberg notes, Tocqueville’s ”civil society is populated by voluntary associations that are oriented to the pursuit of private matters and are generally unconcerned with broad political or economic affairs6.” In American thinking this exclusion of the political sphere has remained a dominant phenomenon.

THE CONTEMPORARY DISCUSSION of civil society arose from the turbulence in Eastern Europe in the late 1970s

1 Ehrenberg 1999,209. 2 Cohen 1998,1. 3 Cohen & Arato 1994,142-159; Kumar 1994,76. 4 Tocqueville 1945(1835). 5 Montesquieu 1949(1748). 6 Ehrenberg 1999,167. 64 when the concept was used to oppose the totalitarian states. Especially in Poland the Solidarity movement used the concept to describe ”the democratic political government of the people and for the people but also the hope of a liberal society with freedom of thought, freedom of belief and of a free market economy.” Dahlkvist states that ”the concept of civil society was not used in Eastern Europe differently from its usage in the West.”1

The Solidarity movement and social movements of the 1960s inspired neo-Marxists to elaborate the concept. They found an alien ally, namely neo-liberals who favoured the concept from their own point of view. Dahlkvist states that they ”introduced and propagated for the concept of civil society that was seen as a special sphere.” He continues that the main point in neo-Marxism was that the state with a parliamentary democracy was in fact a bourgeois class state. When neo-Marxism turned to post- Marxism this negative attitude remained but the attitude towards bourgeois life world changed. ”The state became depressive or inhuman per se.” Neo-Liberals, on the other hand, campaigned against the welfare state and the official sector. They reformulated the old laissez-faire principle to justify their negative attitude toward the state.2

In its present meaning, civil society combines NGOs, social movements, families and individual activity. It means citizens’ independent activity outside the sphere of the state. In this sense, like classical liberalism stated, the market is part of the civil society as well.

1 Dahlkvist 1995,214 (my translation). See also Trägårdh 1999,15f and Kumar 1994,76. 2 Dahlkvist 1995,216 (my translation). Dahlkvist continues his argument that there is no such sphere like civil society that is outside the sphere of the state. However, he, as many other scholars, forgot that in European history the church has almost always been a sphere outside the state, and, surprisingly, many of those organisations that belong to civil society have emerged from the bosom of the church. 65

However, Cohen and Andrew Arato1 define

civil society as a sphere of social interaction between economy and state, composed above all of the intimate sphere (especially the family), the sphere of associations (especially voluntary associations), social movements, and forms of public communication. Modern civil society is created through forms of self-constitution and self-mobilization. It is institutionalized and generalized through laws, and especially subjective rights, 2 that stabilize social differentiation.

Accordingly, Cohen and Arato distinguish civil society from both political and economical fields of action. For them the civil society also includes the private sphere. For them the civil society has the following distinct components:

(1)Plurality: families, informal groups, and voluntary associations whose plurality and autonomy allow for a variety of forms of life; (2) Publicity: institutions of culture and communications; (3) Privacy: a domain of individual self- development and moral choice; and (4) Legality: structures of general laws and basic rights needed to demarcate plurality, privacy, and publicity from at least the state and, tendentially, 3 the economy.

Later Cohen stresses the role of publicity even to the point that a reader gets an impression that civil society is almost equivalent to the public sphere where public opinion is formed. She writes:

The public sphere is where people can discuss matters of mutual concern… Discourse on values, norms, laws, and policies generates politically relevant public opinion… This concept of the public sphere is the normative core of the idea of civil society and at 4 the heart of any conception of democracy.

However, with this definition Cohen comes back to the classical understanding of civil society, namely that it

1 Their theory of civil society arises from their ‘post-Marxian’ heritage of the critical theory. It forms a combination of Alexis de Tocqueville’s thoughts, Hegel’s philosophy, Talcott Parson’s structuralism and Jürgen Habermas’ concept of life world that is different from political and economic subsystems. Habermas’ concept of discourse ethics is especially important to them. 2 Cohen & Arato 1994,ix. 3 Cohen & Arato 1994,346. 4 Cohen 1998,2. 66 is a sphere where independent citizens rule themselves. Public opinion is one crucial part of the democratic state and thus the division between state and civil society is blurred.

It seems that the modern usage of civil society is quite flexible. In the long run its broad definition has referred to the political sphere where independent citizens can arrange their government. In its narrow definition it has meant the sphere outside of the realm of the state. In both meanings the concept is broader than the concept of the third sector. In the first case it means the whole society including the state. In the latter definition it also includes households that are not usually included in the third sector.

In the narrow definition we could also call civil society non-statutory sector or independent sector. These are concepts used mainly in British and American contexts. In a similar way as the concept of civil society these terms aim to underline the independence of the sector from the state and the market. The terms have been used especially by some American umbrella organisations which guard the interests of nonprofit organisations against the state.1

The problem of the concept lies in the interaction with the state. Basically there are two ways to frame the state and these frames give different meanings to the civil society. The state is either ‘our business’ - a common enterprise of all citizens that guards the rights of people2, or it is a realm outside and above the grassroots level. In this case the state can be a dictatorship, where there are no citizens but subjects, or a bureaucracy that is so involved in maintaining itself

1 Helander 1998,41f. 2 This is what Scandinavians eagerly think about their respective societies and what both Aristotelian and old liberal traditions propagated. 67 that it has forgotten its citizens. In these contexts the state has given more responsibilities than rights and thus social services and education were organised in other spheres. A new phenomenon is a state that is in principle democratic but in practice far away from its citizens. This is what post-Marxists claim the modern state to be. Thus, the frame of the state thus defines the frame of civil society as well. In the formation of these frames social movements have a significant role.

3.3.2. Social Movements

The social movement sector or ideological sector refers to non-material and non-economic activity. It can also refer to organs which have unselfish and altruistic purposes. They can improve the interests of their members, too. Voitto Helander notes that in Scandinavia the actors and scholars in the field of third sector prefer terms such as movement, ideology and interest organisation1. Social movements have been understood as the core of civil society. On the other hand social movements are also a channel to the decision making of the state because they are closely involved with the preparation of legislation.

Kurt Klausen and Per Selle identify five major movements and their organisations that have left their footprints in the understanding of third sector organisations in Scandinavia: ”the Peasant Movement, the Labour Movement, the Religious Movement (the laymen’s movement2), the Teetotal Movement, and the Sports

1 Helander 1998,38. However, it seems that although Scandinavian scholars speak about social movements (or literally peoples’ movements) they do not interact with the international social movement research community. Both in the ISA conference in Montreal 1998 and the ESA conference in Amsterdam 1999 there were only three (two from Finland) Scandinavian researchers in social movement research groups. Moreover, in the papers of the Nordic third sector conference in Stockholm 1999 there were almost no references to social movement literature. Montreal 1998,238-248; Amsterdam 1999,46f; Stockholm 1999. 2 The accurate term should be revival movements (in plural) because there are several independent movements with different emphasis and 68

Movement1.” Because of the legal tradition they have been regarded as associations2 or (in the case of Finland) organised themselves as associations.

The concepts social movement organisation, social movement industry and social movement sector are central concepts in the American resource mobilization approach3 (RM) to social movements. The traditional difference between social movements and other definitions in third sector studies is that social movement is regarded more as a process than a ‘social thing’4. The old assumption is that a social movement has a life span starting from unorganised activity and ending in becoming an institution when the movement ceases to exist as movement. This idea is based on Roberto Michels’ classical ‘iron law of oligarchy’ theory5. However, the resource mobilization approach stressed that organisations are essential parts of the social movements as a resource of activity. The European new social movement6 approach (NSM) has placed more emphasis on the ideology and identity of the movements. These two approaches started to influence each other by the end of 1980s7.

The content of social movement concept is rather unclear. There are two extremes. On one hand, there are Alain Touraine (NSM) and Charles Tilly (RM) who include only political movements in the concept8. On the other hand, Mayer N. Zald (RM) includes almost all possible human activity in it9. I regard that ‘social movement’ is

which often compete against each other. 1 Klausen & Selle 1996. 2 On legal status of Scandinavian associations see Gjems-Onstad 1996. 3 On resource mobilization approach see McCarthy & Zald 1977. 4 On this, e.g., Melucci 1992,48ff. 5 One of the main theorists in this line has been Ottheim Rammstedt who developed a model for the rise and fall of social movements. Rammstedt 1978. 6 The concept was developed by Alberto Melucci. Melucci 1980. 7 The mediator between these approaches was Bert Klandermans. Klandermans 1986. 8 Tilly 1978; Touraine 1981. 9 McCarthy & Zald 1977. 69 de facto a main concept of movement research and it can be then divided into more sophisticated sub-concepts like political movements, reformation movements, religious movements, etc. With excessively strict preliminary boundaries there is a danger of excluding significant phenomena.

The concept of social movement sector is thus a part of the concept of civil society as well as a part of the broad description of the third sector. With broad description I mean Etzioni’s definition that includes everything that is not governmentally or market oriented. In comparing the concept of civil society to the concept of social movement sector, it is found that they are almost identical because movements are the other major way to participate in the legislation process. The difference is that civil society also includes other phenomena than movements, namely a host of intermediary organisations that facilitate interaction in the society.

3.3.3. Intermediary Organisations

The concept of intermediary organisations, in its contemporary usage, means the sphere between the family, market and the state as ¡Error! Argumento de modificador desconocido. shows. Thus, it is close to Figure ¡Error! Argumento de modificador the concept of civil desconocido.: Intermediary organisations society and its roots are, in fact, in the discussions of civil society. 70

Baron de Montesquieu1 was the first philosopher who used the concept. He defended the status of the aristocracy and developed the theory of mediating organisations. He started from the Aristotelian notion of three classes in society but identified the middle class to be the aristocracy between the monarch and the people. For him, the legal institutions of the lords (courts, parliaments, estates) protected civil society. Now it is important to note the difference that Montesquieu made between despotism and constitutional monarchy. All his theories concerned the latter one. Ehrenberg argues that ”it was Montesquieu who first placed intermediate organizations at the center of civil society2.”

In German and Scandinavian political thought the concept arises both from the Medieval town system and from the Hegelian heritage. The starting point of this thinking is that the main institutions of a society are the family, state and market. Intermediary organisations form a sphere that lies between these three forming a fourth sphere. According to Cohen, Hegel’s theory was a response to the Jacobinic natural rights theory because it enabled terror in the name of the people or citizens against an individual. An individual was quite helpless in front of the Jacobinic state apparatus. Hegel rejected the ‘one man - one vote’ principle and urged the intermediary organisations and corporate representation to protect personal liberties.3 In this Hegel followed the liberalistic and Social Christian tradition of which Jacques Defourny writes:

In general, the Social Christians of the XIXth century called for ‘intermediary bodies’ to fight against the isolation of the individual which was the taint of liberalism and against the absorption of the individual into the State, which was the 4 Jacobinist trap.

1 Montesquieu 1989(1748). 2 See Ehrenberg 1999,148. 3 Cohen 1982,26. 4 Defourny 1992,31. 71

Intermediary organisations include not only protective and pressure organisations but churches, associations, personal networks, etc. as well. The difference in the concept of third sector is that along the state and the market there is also a third major institutional sector, namely the household sector and intermediary organisations form a sphere where these can interact.

Aila-Leena Matthies has, following the German research tradition, argued that

intermediary level organisations do not exactly form a separate, clearly identifiable fourth sector, which is distinct by its inner dynamics from market, state and the household. On the contrary, the speciality of intermediary level is the ability to fix together the principles of the other three sectors in a way that meets the situational needs: namely, competition of the markets, hierarchial democracy of the public sector and 1 solidarity of communities.

Thus, the intermediary level does not mean only a sphere that lies between the other sectors but has also a functional meaning: it intermediates the interests between citizens and the state2. In this statement we can see the Hegelian definitions of the main components of the society. It seems that in Germany there is still resistance to accept the existence of (in this case) the fourth sector on its own terms.

All of the concepts above see the state at least as a ‘significant other’. There is, however, a concept that is totally based on the distinction from the state, namely the concept of nongovernmental organisation.

3.3.4. Nongovernmental Organisations

Nongovernmental organisation (NGO) is a concept that describes those organisations that work in the framework of the United Nations. Marc Nerfin had described the role

1 Matthies 1994,15. 2 Matthies 1994,14. 72 of NGOs with the distinction prince - merchant - citizen where NGOs represent the citizens1. Thus, it is a concept quite near to the concept of third sector.

Nongovernmental organisations are defined according to the United Nations Charter 71 which empowers the Economic and Social Council (ECOSOC) to ”make suitable arrangements for consultation with nongovernmental organizations which are concerned with matters within its competence.” The Cold War intensified with early attempts to give meaning to the concept. The present legal framework is from 1968 from the ESOSOC resolution 1296 (XLIV). According to that resolution, any international organisation that is not established by an intergovernmental agreement falls into the NGO category. However, this is not enough because the text emphasises that any NGO that is seeking consultative status must have goals that resonate with UN economic and social ambitions. Thus, not all organisations that are not governmental gain the status of a NGO.2

Leon Gordenker and Thomas G. Weiss describe the distinction of NGOs from other organisations. They define the NGOs as follows:

They are formal organisations that are intended to continue in existence; they are thus not ad hoc entities. They are or aspire to be self-governing on the basis of their own constitutional arrangements. They are private in that they are separate from governments and have no ability to direct societies or to require support from them. They are not in the business of making or distributing profits. The NGOs of interest here have transnational goals, operations or connections, and have active contacts with the UN system.3

Thus, the concept of NGO has arisen in the context of UN to draw distinction between states, the UN and other international governmental organisations (IGO) that are established by governmental agreements4. From there the

1 Nerfin 1986. 2 Gordenker & Weiss 1995,361f. 3 Gordenker & Weiss 1995,360. 4 One ‘difficult’ organisation is the International Red Cross because 73 concept has spread to Third World countries and former socialist countries.

There are a great variety of concepts related to NGOs. Anna C. Vakil has collected a selection of them: big international nongovernmental organisations (BINGO), community based organisations (CBO), community based nongovernmental organisations (CB-NGO), co-operatives, donor nongovernmental organisations (DONGO), government nongovernmental organisations (GONGO), grassroots organisations (GRO), grassroots support organisations (GRSO), informal community based organisations (ICO), interest organisations, international development cooperation institutions, international nongovernmental organisations (INGO), local development associations (LDA) nongovernmental development organisations (NGDO), northern nongovernmental organisations (NNGO), peoples organisations (PO), public service contractors (PSC), quasi nongovernmental organisations (QUANGO), social change organisations(SCO), support nongovernmental organisations(SNGO), voluntary organisations (VO) and welfare church organisations (WCO). There is still one expression that can be added to this mess of concepts, namely Congress of Nongovernmental Organisations(CONGO), which is an umbrella organisation of most of the NGOs. All of these concepts underline different connotations. Some concepts frame the distinctions in the continuum local - national - international. Some frame the purpose of the organisations while some others frame the distinction between the North and the South, etc.1

Comparatively, the concepts of third sector, civil society, social movements, intermediary organisations and

it has two bodies, namely the International Committee of the Red Cross and the International Federation of Red Cross and Red Crescent Societies. The first is an IGO because it was founded by the agreement of governments, and the latter is a NGO (or QUANGO) because it is an alliance of national Red Crosses and Red Crescents. 1 Vakil 1997,2060f,2067. 74 the concept of NGO have much in common. The common feature is the distinction from the state. In this sense the concept differs from the classical meaning of civil society but is included in the modern meaning of the word. The differences with other concepts occur if the other concepts do not make distinctions between the market and intimate sphere. It is also broader than, for example, the concept of social movement because it includes more than movement organisations. On the other hand, it is narrower because it includes only organisations and not informal networks or movements that do not have formal organisations.

Civil society, the non-statutory sector, the independent sector, the social movement sector, intermediary organisations and nongovernmental organisations are all etymons that frame the third sector from a macro perspective. The state is always at least the ‘significant other’ if not part of the concept. Another group of concepts starts from the premise that the individual is in the centre. Philanthropy and charity, as we have seen, started as individual activity.

3.3.5. Philanthropy Sector

The Philanthropy sector and charity organisations refer to private voluntary activity of poor relief. As we saw in the historical part of this study, philanthropic organs have existed almost as long as mankind1. Nearly all cultures have some forms of philanthropy and they are usually legitimated by religious regulations.

Loewenberg offers quite a useful distinction between the terms philanthropy and charity. The previous is a wider term meaning any individual activity for the benefit of society. The latter refers to the services for

1 Michael O’Neill refers to anthropological literature to point out that some kind of mutual benefit organisations have existed since the Neolithic period (8000-7000 BC). O’Neill 1994,7. 75 disadvantaged groups.

Charity is always targeted for others, while the beneficiaries of philanthropy may include the donor or members of his or her social 1 group.

One of the main historical hallmarks for the recognition of philanthropic organisations as legal entities is in Elizabethan Statute of Charitable Uses from 16012. That legislation started the legal tradition that is used in a family of countries that Anita Randon and Perri 63 call charity law countries. They are originally Common Law countries, but according to Randon and 6, their major feature is the charity legislation. Randon and 6 found that only those countries which have charity legislation, constrain the political activity of philanthropic organisations. Philanthropy comes thus first and the tax legislation afterwards. Randon and 6 state that

The scope of ‘charitable purpose’ means that organisations are prohibited from obtaining charitable status if their purpose is 4 considered to be ‘political’ .

Additional to this,

much of the charity law tradition appears to regard charities as, in some unclear way, public if not quite part of the state, and 5 therefore properly subject to administrative fiat.

In this way philanthropy and charity have a strong connotation of politically neutral activity in Anglo-Saxon countries. Compared to other terms, this is a unique connotation. In other countries such constraining cannot be found.

However, Randon & 6 leave the existence of Canonic law in many European countries unstudied. Charity (as well as

1 Loewenberg 1994,195. 2 See, e.g., Fraser 1985. 3 Randon & 6 1994. 4 Randon & 6 1994,36. 5 Randon & 6 1994,51, see also 41f. 76 education) issues were ruled according to Church legislation. Although the monarchs in Continental European history would have favoured to silence the political voice of the churches, they did not have the power to do it. It seems that in a similar way as the universities got their independent status from the privileges of clergy, the European philanthropic organisations benefited from the same heritage. However, this is only a hypothesis that should be studied more carefully.

E. Blake Bromley has studied the development of the concept of philanthropy. He states that there are five broad historical phases of philanthropy that he calls religious, Reformation, remedial, Renaissance and retrenchment. ”In the first historical period, the Medieval phase, philanthropy was almost exclusively religious in character, with its primary expression in society being almsgiving1.” In the Reformation phase there was a change to state responsibility. In this phase ”the agenda is set in conjunction with or by the state and the citizen determines his or her level of participation2.” In the remedial phase emerged the different tasks and responsibilities of state and philanthropic organs. Before, it was not so important from which source the benefits came but in this phase the concepts of entitlement and charity were separated. If somebody (for example, a wounded soldier) has a statutory right to the state entitlement, it is not philanthropy3. In the Renaissance phase the concept was expanded to ‘other purposes beneficial to the community.’ It was not any more a question of the poor relief and, for example, education was not any more seen as a method of relieving poverty. Instead it was ”predominately emancipation of the mind and excellence4.” Finally, retrenchment philanthropy is a phase where the state tries to reduce its

1 Bromley 1994,172. 2 Bromley 1994,175. 3 Bromley 1994,179. 4 Bromley 1994,180. 77 responsibilities. Bromley does not see it as real philanthropy. He expresses it as follows:

Retrenchment Philanthropy is a product of a partnership between charitable institutions and the state. True philanthropy is a 1 voluntary partnership between the citizen and the state.

Thus, the meaning of philanthropy differs from time to time depending on how the responsibilities are framed and what activities are included under the concept.

The non-political pre-understanding of the philanthropic sector is the major difference between the concepts of civil society, nongovernmental organisations and the social movement sector. In this sense the philanthropic sector is a part of the third sector, the group of nongovernmental organisations and the narrow meaning of civil society. Compared the concept of philanthropy sector to the concept of social movements and classical understanding of civil society it seems that they are almost opposite concepts. The main task of social movements and classical civil society is political activity and that is what philanthropic organisations try to avoid.

Michael O’Neill has discussed if the mutual benefit organisations and self-help groups are included in the category of philanthropy. In some cases they are charities and sometimes not. It depends on how much the organisation puts weight on inclusiveness/exclusiveness questions when the help is given2. However, in mutuals and self-help groups as well as in charity, voluntary work plays a major role.

3.3.6. Voluntary Sector

Voluntary sector is a term that is closely related to philanthropy but it has a stronger emphasis on voluntarism

1 Bromley 1994,182. 2 O’Neill 1994. 78 than charity and philanthropy. Barry D. Karl has argued that the etymon voluntary refers originally to religious concerns of free will and service to church. From there it spread to military service and agriculture. As a religious term it was bound to call for the service, and it was also linked to brotherhoods and sisterhoods. However, the voluntarism ended immediately after the voluntary oath and professional1 commitment began. In military terminology it was distinguished ”men coerced or paid to go into battle and those who offered their service freely.” In agriculture the term differentiated ”crops that reseeded themselves on their own from those for which seeds would have to be procured.” Karl mentions also the fourth old use of the term, namely in the cases of community emergencies. In these cases it meant ”extraordinary support services regardless of cost.”2

Karl argues that ”an important controversy has always been present in discussion of the volunteer”, namely whether volunteers are better in their duties than professionals. He notes that these two aspects have lived together and, for example, in Dickens writings can be seen the contradiction between the cold, state organised poor relief and the warm, voluntary philanthropy. There has been institutionalised charity for centuries but it is from time to time challenged by volunteer work. Karl argues that there have been certain moments in Western history when organised relief has been transformed into voluntary charity. Two such important moments were the Protestant Reformation and the Industrial Revolution. Both caused the breakdown of the old organised relief systems and ”made those services dependent on the charity of individual congregations” or individuals.3

In the modern usage the term has two aspects. First,

1 Karl notes that ‘professionals’ in the oldest sense of the term meant ”persons who responded to a call of service.” Karl 1984,507. 2 Karl 1984,506ff. 3 Karl 1984,495,509. 79 the main reference is to volunteering as a phenomenon in different organisations. In this sense it distinguishes itself from professionalism. In this usage there is no difference in which kind of organisation this volunteering occurs. Second, the opposite of voluntary is, of course, compulsory. In this sense the term refers to the character of the organisations. Voluntary organisations are formed freely to satisfy the needs of people. In this sense the term excludes organisations that are compulsory according to legislation. This means that such non-state organisations that are based on legislation and have a legal status (and in some cases legal authority) are not voluntary organisations in this sense. In Finland, for example, some organisations that take care of the administration of forest and water fall into this category as well as the two national churches.

Compared with other concepts we find that the voluntary sector is wider than the concepts of third sector, the narrow definition of civil society, nongovernmental organisations, social movements and intermediary organisations. Namely voluntarism also exists in the official sector, neighbourhoods and informal networks. Here the European churches again form a special case. They are part of the official sector but their activities are much based on voluntary work. However, we find voluntary work more and more in the municipal sector, too. Parents’ participation in kindergartens’ and schools’ work is especially increasing. Thus, the concept of voluntary sector expands itself to the sphere of the state and differs from the other concepts. The same phenomenon of volunteering in public sector can be seen in international organisations (IGO). Organisations like the International Red Cross, UNICEF and UNHCR use volunteers in their fund-raising and in their field activities. The concept of voluntary sector expands itself to the intimate sphere of family, neighbourhoods and friends, and thus differs itself from the other concepts in this respect, 80 too. If we compare it to the classical meaning of civil society we see that the voluntary sector is a part of it because civil society is the whole society.

Historically the voluntary sector has had a connection with the public status of philanthropy. Later, the term was widened to cover all kinds of voluntary organisations without specific philanthropic emphasis1. We find voluntarism in sports clubs and political campaigns as well.

On the other hand, it can also be argued that the voluntary sector does not cover everything that the other concepts cover. In the third sector, civil society social movements, intermediary organisations or philanthropy sector many of the activities are run by professionals. Below in part two we see that in some organisations there is even a tendency to avoid voluntary work because an organisation works more efficiently without them. Universities, schools and hospitals are examples of organisations that rely more on professional staff than on volunteers. These institutions are in the core of the nonprofit sector.

3.3.7. Nonprofit Sector

Nonprofit sector and tax exempt sector are concepts that are used in the USA. The latter has rarely been used outside the USA. However, it is central in tax legislation and national economy2. Nonprofit sector means a sector where the organisations are not allowed to distribute their profits to their owners or staff.

The etymon nonprofit has become widely used outside the USA, too. The main reason for this has been the American dominance in the research. It refers, as Estelle

1 Helander 1998,37. 2 Helander 1998,39. 81

James puts it ”to group of organisations that qualify for tax exemption and for tax-deductible donations1.” Paul J. DiMaggio and Helmut K. Anheier give a more specific determination:

...nonprofit organizations are those falling under section 501(c)3 of the Internal Revenue Code (a category including most nonprofit hospitals, cultural organizations, traditional charities, foundations, schools, day-care centres and foundations, among others), or the smaller, related 501(c)4 category (civic leagues and social welfare organizations, which are denied tax-deductible contributions but which may engage in some political or commercial activities from which (c)3s are barred); these do not include such mutual-benefit associations as labor unions, workers or consumers cooperatives, veterans organizations, or political parties, which the law treats 2 separately.

Both definitions arise from the US tax legislation. The main speciality of Internal Revenue Code (IRC) category 501(c)3 is that it enables both tax-exemption and tax-deduction. Other categories enable only tax- exemption3. These definitions are more explanations of how the state deals with these organisations than definitions of their content. The definition by IRC 501(c)3 or (c)4 is especially problematic. Additional to what DiMaggio and Anheier mention it also leaves out self-help groups (for example, AA), small local associations, and local churches. David Horton Smith has criticised that this has left the majority of the third sector out of the data and research4.

1 James 1990,21. 2 DiMaggio & Anheier 1990,138. 3 Weisbrod 1988,61. 4 Smith D.H. 1995a, 1995b, 1997. Smith’s 1997 article created an interesting discussion in the next volumes of NVSQ. Lester M. Salamon reminded that the researchers are aware of the problem but that in the situation in early the 1980s, when he started the research, the common view was the opposite: ”the prevailing sense was that the world of nonprofit action was inhabited largely by rather small voluntary groups with little economic weight” and therefore it was necessary to underline the number of employees (Salamon 1998,89). Eva Kuti pointed out with her Hungarian data that ”the performance of the ‘flat earth map’ is not that bad when it is used to describe the sector's structure and economic importance.” She also reminds that European Civil Law countries have had adequate directories of all nonprofits for more 82

The same exclusion is also seen in the definition by Salamon and Anheier. For them nonprofit sector is

a collection of organisations that are formal, private, non- 1 profit-distributing, self-governing and voluntary.

When they define that NPOs must be formal one has to make several notes. First, what is formal? In some countries associations need not to register themselves to be formal and in other countries only registration brings formality. The second problem in their definition is in the criterion of being private. I already discussed the difficulties in determining what is public and what is private. Are the network/umbrella organisations of European universities or geographical areas public or private? Third, nonprofit constraint leaves co-operatives and mutual benefit organisations out of the concept. Fourth, self-governing constraint leads to questions of dependence. Is an organisation that is depending on one source (state, private donor) self-governing? Finally, what about highly professionalized institutions like universities and hospitals? They are neither based on membership nor on voluntary work.

Robert Scott Gassler gives a summary of the economic definitions as follows:

a nonprofit organisation is an organisation in which no member owns any fraction of the difference between the organization’s 2 revenues and costs.

In this definition the focus is on the ownership of the organisation. However, this definition also leaves the mutual enterprises and co-operatives out. Peter Dobkin Hall gives a wider definition of a nonprofit organisation:

than one hundred years (Kuti 1998,90ff). 1 Salamon & Anheier 1993,537f. However, this definition is also bound to American context and strictly taken leaves out, for example, co- operatives and mutual companies which are often included in the third sector. The nonprofit constraint, namely, also prohibits such profit distribution to members which is common in these organisations. 2 Gassler 1990,141. 83

I define a nonprofit organisation as a body of individuals who associate for any of three purposes: (1)to perform public tasks that have been delegated to them by the state; (2)to perform public tasks for which there is a demand that neither the state nor for-profit organizations are willing to fulfil; or (3) to influence the direction of policy in the state, the for-profit 1 sector, or other nonprofit organizations.

In Hall’s definition the focus is on the individual’s attempt to organise the public tasks either by doing them by themselves or by the means of politics. This definition also links the concept of nonprofit organisation to free activity of individuals which is more emphasised by the term voluntarism.

The main focus of this term is to make a division between for-profit and not-for-profit organisations. The legal definitions are the same as those that have previously been addressed to philanthropic organisations. Lester Salamon notes in his reply to David Horton Smith’s critique in 1998:

when I began work in this field in the early 1980s, ... the prevailing sense was that the world of nonprofit action was inhabited largely by rather small voluntary groups with little economic weight... Worse than that, there were political and 2 ideological reasons to deny its existence.

When Barry D. Karl reviewed Walter W. Powell’s handbook on nonprofit organisations in 1987, he noted that the term nonprofit had been adopted by the NPOs because

it substitutes for the implication of charity that ‘philanthropy’ carries an organizational conception modelled on business enterprise, which is presumably efficient, subject to cost- accounting standards of performance and principles of active 3 management.

From these quotations we can see that the reason to change the term came rather from apologetic than impact reasons. Practically the nonprofit sector in this discussion consists of those old philanthropy institutions

1 Hall 1987,3. 2 Salamon 1998,89. 3 Karl 1987,984. 84 that have developed a modern and effective management. The old understandings of the role of philanthropy in society still lay in the background.

When we compare the etymon nonprofit to other concepts, we find that in the third sector literature the concept of NGO is often seen as synonymous to NPO. However, there are also differences. The biggest difference is that in a NGO (also in civil society and intermediary organisations) there is no political limitation. Thus, all political parties are NGOs but not NPOs. NPOs are basically philanthropical organisations, and the distinctions of philanthropy sector to other sectors are valid here, too. The main addition is that the nonprofit sector includes only formal organisations. Thus, the informal charity is excluded from this concept.

Compared to the voluntary sector, we can see two different aspects. First, Robert D. Herman has noted that the etymon voluntary has its origins in sociology and political sciences where they have a long research tradition. The etymon nonprofit is, in turn basically a concept that belongs to economics and legal studies. He states that ”the choice between these [voluntary and nonprofit] approaches is clearly based on theoretical preferences and disciplinary background.”1 Second, there is the question how these two concepts differ. David Horton Smith has argued that it is wider than the nonprofit sector because it also covers such grassroots organisations and religious organisations that are not included in IRC category 501(c) 42. However, as we saw above, voluntary sector is also narrower because not all NPOs are voluntary organisations. They are sometimes big companies that are entirely run by professionals and they differ from other companies in their purpose to serve society. This aspect is even more clear in the French

1 Herman 1990,295f. 2 Smith D.H. 1997. 85 concept of social economy.

3.3.8. Social Economy

The concept of social economy (économie sociale), that is used in France, according to Edith Archambault, consists of three kinds of actors: co-operatives, mutual benefit societies and associations1. They work in four areas: ”health and social welfare, education and sports, professional training, recreation and tourism2.” Luc Veron sees that the characteristic phenomena from a legal perspective in these actors are a) independence from the state, b) ‘one man - one vote’ -principle and c) social nature of the activities. On the other hand, from values’ perspective these organisations hold values like the right to associate, democratic control, solidarity, justice and equal opportunities3. Jacques Defourny adds the ”absence of a profit motive, freedom of membership, democratic management and independence from public authorities4.” Moreover, he states that ”it is a synonym for the economics of social matters5.”

The concept of social economy evolved in the beginning of the nineteenth century. It was developed in four different traditions, namely socialist, Social Christian, Liberal and Solidarist traditions. Defourny notes that ”it was in this melting pot that the first cooperatives and mutual benefit societies of the modern era were born.” At that time ”the idea of social economy covered a much wider area than today, although cooperatives, mutual benefit societies and nonprofit organizations already occupied a central position.” However, along with the parting of these movements the importance of the concept diminished.6

1 Archambault 1990,293. 2 Archambault 1990,295. 3 Veron 1995,35f. 4 Defourny 1992,36. 5 Defourny 1992,33. 6 Defourny 1992,27-32. 86

The concept of social economy was adopted again in the 1970s when these movements again grew close each other. In the next decade it had been accepted by the French state officials1. The concept has also been accepted in other Catholic countries of Romanic language area. In the EU it challenges the Anglo-Saxon concept of nonprofit sector and has been adopted as a central concept in its administration. The practical consequences become evident when the concept is transformed to EU legislation, e.g., in the field of taxation. The European REEN research network has taken the concept as it's own, too. Voitto Helander ponders that this might lead to reformulation of the whole third sector concept.2

In Germany the relative concepts that mean almost the same as social economy have been public benefit organisation (gemeinwirtschaftliche unternehmen) and communal enterprise (gemeinützige organisationen). The previous concept covers such economical enterprises that are neither capitalist nor socialist. Its background is the co-operative spirit of the 19th century which led to both co-operatives and mutual benefit organisations in banking and building. The background of the latter term also lies in the 19th century when associations and foundations became involved with the huge social problems of the society. It refers to organisations that are seen to work for the benefit of the society. Today the term is used mainly in the tax legislation.3

Compared to other concepts we see that again the concept of social economy is in one sense wider and in other sense narrower than others. The problem is that even in France scholars have not been able to define what the concept really means4. Defourny refers to the consensus that has been reached in Belgium. According to Belgians

1 Defourny 1992,33f; Archambault 1990,293. 2 Helander 1998,45f. 3 Anheier & Seibel 1993. 4 Defourny 1992,35; Monzon Campos 1992,21f. 87

The social economy is made up of economic activities carried out by firms which are mainly cooperatives, by mutuals and by nonprofit organizations which subscribe to the following principles: - Purpose of serving members or the collective rather than profit - Independent administration - Democratic decision-making process - Priority given to persons and labour rather than capital in the 1 redistribution of revenues

Defourny also refers to H. Desroche’s suggestion that the field of social economy has four interfaces with which it interacts, as shown in ¡Error! Argumento de modificador desconocido.. The basic idea is that social economy has some common ground with its four boundaries, public sector, local public sector, private sector and trade union sector2. Perri 6 has also argued about this common ground. According to her, it is the norm in the European welfare mix that sectors are interdependent and the organisational form does not always explain the behaviour of an organisation3. Thus, we are back to those questions that were raised in the beginning of this chapter, namely the question of borders and borderlines. It seems that in society everything is related to each other and all the distinctions are only analytical. The old metaphor of society as an organ (or church as the body of Christ) has some validity because it tells us how the society needs all its components.

3.3.9. Informal Sector

The concept of informal sector or informal-economy sector is, according to Rikki Figure ¡Error! Argumento de modificador desconocido.: Social economy 1 Defourny 1992,35. 2 Defourny 1992,37f. 3 6,1994,402ff. 88

Abzug (who follows Alejandro Portes1),

the illicit production of private goods and services. This can be contrasted with the legal production of public goods or services 2 in the nonprofit sector.

According to Abzug, it is both the legality of the production and delivery methods and nature of goods that define the sector. Another definition is from Bruno Dallago3 who defines it, according to Abzug, as

activities performed within the family or in small communities 4 based on relationships of kinship or friendship.

Abzug argues that there are four phenomena that characterise informal economy: community/social ties, ethnicity/ethnic enclave, trust5 and an attempt to avoid taxation.6

In Eastern Europe the concept is, according to Abzug, close to the understanding of civil society: a parallel sphere to the command economy7. On the other hand, the concept is close to David Horton Smith’s fourth and fifth sector8. In intermediary sector talk, the informal sector is equal to households. It is part of the philanthropy sector but normally excluded from all definitions that emphasise formal structures (nonprofit, nongovernmental, social economy).

Abzug theorises that if the tax rates and government regulation in a society are increasing or if the society ”is characrerised by authoritarianism and/or presence of

1 Portes 1992. 2 Abzug 1999,132f. 3 Dallago 1990. 4 Abzug 1999,134. 5 Following Portes, Abzug notes that ”absent market and hierarchy as forms of economic exchange, trust remains the medium through which business is conducted and supported in the realm of informal.” Abzug 1999,135. 6 Abzug 1999,134f,137. 7 Abzug 1999,136f. 8 See chapter 3.1. 89 landed elites” (other factors being similar) the informal sector is likely to develop instead of the nonprofit sector.

3.3.10. Family of Concepts

The main question of part 1 was ”how are the third sector and other related concepts framed in different cultures?” In the historical part I gave a general view of how different general megatrends have moulded understandings of the Figure ¡Error! Argumento de relationships between the three modificador desconocido.: sectors. In this chapter I have Realm between four concentrated on the terminology institutionalised sectors. and shown how these cultures have developed different concepts and content of the third sector.

Although I am not satisfied with the concept of the third sector, I can not offer a better one. Thus I use it as a terminus technicus to describe the realm between the state and the market. However, I remind that we have also other institutionalised sectors in society than the state and the market, namely family and religion. My framing is close to the tetrahedron in ¡Error! Argumento de modificador desconocido.. The realm that the different concepts try to describe exists between four basic institutions of society: the family, the market, the religion and the state. It is both a host of independent organisations and a field where the basic institutions of society interact. Thus, on one hand it can be seen as an independent sector and, on the other hand, it is a sphere of interaction with the other sectors.

All concepts dealt with above have special connotations, but in a broad sense they express the 90 content of the most frequently used concept third sector. However, this is valid only if we use the broad definitions1. Only when we draw boundaries, the contents of the terms differ from each other. We could say that the organisations that are not normally excluded are associations, foundations and fraternities. These are in the core of the field. Inclusion/ exclusion of other forms of organisations depends on the point of view of the theory. The disputed organisational forms are mutual benefit organisations and co-operatives (because they deliver profits to their owners they are not nonprofit organisations), political organisations (because of the Anglo-Saxon philanthropy tradition), and churches (in Europe they are part of the public sector, in the US they do not belong under right tax codification).

This terminological mess has been one of the main challenges in comparative international studies of the third sector which I evaluate at the end of this study. In general, I accept Etzioni’s broad definition that the third sector concerns everything that is not purely commercial or official. In this study I use all these expressions and follow the use of the scholarly tradition which I evaluate.

In this mess of distinctions we have two possibilities which I call the minimal and the maximal approach. In the minimal approach we can try to find what different concepts have in common. In practice this leaves only associations and foundations as a core of the sector. However, this approach has not been accepted by the research community. For example the oldest of the journals in the field is called Nonprofit and Voluntary Sector Quarterly which includes the definitions of the two concepts. This maximal approach is also the policy of the International Society for Third-Sector Research. In the call for papers for the year 2000 conference in Dublin the

1 Like Etzioni did. See above. 91 field was defined as follows: ”For the purposes of this conference, the Third Sector is broadly defined, including for example: NGOs, non-profit organizations, voluntary associations, social economy organizations, community organizations, self-help and mutual organizations, civil society organizations, unions, religious organizations and co-operatives1.”

In spite of the difficulties in definitions there is an accepted view that the maximal approach is the right one. There are more and more conferences and anthologies that have two or three concepts combined in their titles. The problem is that there is no concept that covers all used concepts. The concept of third sector, in its widest sense, covers almost all phenomena in the field but unfortunately it normally excludes households and informal networks. If these are included, then the concept covers the whole field.

I see that the difficulty arises from the scientific tradition of categorisations2. The use of categories always leads to exclusions and these exclusions are often questions of power. When concepts are used in legislation, it is sometimes crucial for organisations whether or not they are included or excluded from the determination. Tax legislation is the most known example of this. However, the use of power also exists inside pure scientific discussion. A typical example is that other concepts are used as synonyms of one’s own concept. This is, I think, quite common ‘sin’ amongst many of the scholars. Even those who are doing theory on the basis of international comparison sometimes commit it. It seems that the tradition of making categorisations simply does not work in this field, but is there an alternative?

1 Call for Contributions, 1999. 2 Abzug, following Robert R. Alford (1992), notes that ”the symbols we use to draw distinctions between sectors tend to obscure links among sectors.” Abzug 1999,144. 92

Instead of categorising I propose that concepts in the field could be seen in Ludwig Wittgenstein’s terms, as a family. The Wittgensteinian concept of family resemblances describes that these concepts have something in common but they still are all unique. Wittgenstein writes:

I can think of no better expression to characterize these similarities than "family resemblances"; for the various resemblances between the members of a family: build, features, colour of eyes, gait, temperament, etc. overlap and criss-cross 1 in the same way.

When looking at a family picture, we see that one child has similar ears to his father’s father and same kind of mouth as his mother’s mother. In the case of families we cannot categorise the members of the family by the colour of eyes or the form of nose. All the members are unique but have similar features. The important point is that these common features can only be seen in the family picture.

If we use Wittgenstein’s idea of family resemblances in the case of third sector studies we see that there are different concepts (members of the family) that include organisational forms (features) in different ways. This metaphor enables us to see the actors in the field from their own understanding. In many ad hoc projects we see this patchwork quilt in practice. Different kinds of organisations come together to work for the common goal even if they are different in form and tradition. This family metaphor also enables us to ‘adopt’ new types of organisations in similar way as a family can adopt new children.

This introductory chapter of the concepts used in the third sector has hopefully shown why is the clarification of third sector concepts important in contemporary society. Different research traditions have different concepts and these concepts, in turn, find their way in

1 Wittgenstein 1953,§67. 93 the legislation. When the European integration and globalisation process is moving with faster and faster speed, there is an urgent need for the same language. The basic requirement for co-operation is that decision-makers understand each other.

If we see the third sector research field in the Wittgensteinian way, it allows researchers from different traditions to ‘feel at home’ in the field and this in turn facilitates the creation of common language. My strong conviction is that crossing boundaries normally promotes the development of science and society. This crossing of boundaries has been the strength of third sector studies through the time the subdiscipline has existed. The research field has collected scholars from different main stream disciplines and has gained a much wider perspective of society than what is possible only inside one discipline1. I evaluate these different approaches to the third sector in part two. The story of third sector research frames begins in economics.

1 For the benefits of the third sector research on the main stream social sciences see, e.g., 6,1994,405-408. 94

PART TWO: MAIN RESEARCH TRADITIONS

95

In part 1 introduced both different historical trends within the third sector and different concepts that are used in the third sector research. We saw that there are three basic models of the responsibilities of organising welfare. These models influence how people frame the role of the third sector. These frames are seen in the terminology related to the third sector. In different cultures people use different concepts when they describe the realm between state and market. These concepts in turn constitute the basic understandings of third sector research.

However, cultural differences are not the only differences in the field. Because third sector research is interdisciplinary, it has to cope with different research cultures as well. In this part I evaluate different research paradigms and try to give a view of how researchers in different disciplines have constructed the field. The structure of this part follows the history of the research which started in the US in economics and continued in sociology and political science. As the field was already interdisciplinary the next step was to expand it to other countries and study if the US results are valid elsewhere. This is of course a rough simplification because there has also been similar research in Europe before the international comparative research. However, in international literature, too, the American studies form the hallmarks of the studies, and the American concepts have dominated the international comparisons. As I mentioned, these studies began in economics and thus the next chapter evaluates economical theories of nonprofit organisations. 96

4. The Third Sector as Part of the Economical Life

4.1. The Emergence of Nonprofit Sector Studies

The emergence of nonprofit studies was bound to the expansion of the nonprofit sector in the US and state’s attempts to regulate it. The United States has had, as we have seen, a strong voluntary association involvement since the 19th Century. However, academic scholars paid very little attention to nonprofit organisations (NPOs) before the 1970s. There were three phenomena that raised the attention - partly they strengthened each other. The first was the rise of the sector in the US that had begun in the 1950s. The amount of tax-exempt charitable organisations increased from 50000 (1950) to 300000 ( mid 1960s) and 700000 (mid 1970s).1

The second phenomenon was that the character of the NPS changed noticeably. When in the 1950s the health care industry was composed mainly of traditional charities, in the 1960s the implementation of Medicare and Medicaid freed the nonprofit hospitals ”from the dependence on charitable contributions and became potentially profitable institutions deriving virtually all their revenues from 2 patient billings.”

The third stimulus was the 1969 Tax Reform Act. Hall notes that the leaders of American philanthropy ”realized that both the nature of the tax-exempt universe and public policies toward it had fundamentally changed.” They knew that tax policy influenced philanthropical giving but there was no scientific evidence of it. So ”they decided to locate and commission ‘reliable’ scholars to study the subject.” The first report was made in 1974 by Martin S.

1 Filer Commission 1977. 2 Hansmann 1987,27. 97

Feldstein1, who was a Harvardian economist and a specialist of health care costs. Short while earlier the Commission on Private Philanthropy and Public Needs (Filer Commission)2 had been formed. It was a privately funded effort jointly sponsored by the Department of Treaty and it published six weighty volumes of scholarly studies in 1977.3

The contact between the third sector and the scholars was formed and this paved the way for the future. Peter Dobkin Hall writes in his theory and institution review:

Although a few scholars studied philanthropy, voluntarism, and non-profit organizations simply because they found them interesting, most members of the research community were attracted to the field by the incentives provided by non-profit leaders as they sought to defend the charitable tax-exempt 4 universe against legislative attack.

Barry D. Karl notes in his review that even the terminology was sanitised. Instead of the term charity the advocating theorists cultivated the term nonprofit organisation, because it

carries an organizational conception modelled on business enterprise, which is presumably efficient, subject to cost- accounting standards of performance and principles of effective 5 management.

As we see, there was tension between the interests of the industry and the autonomy of the science6. One of the leading scholars was Henry Hansmann7, who built his work on Mancur Olson8 and Burton Weisbrod1, the theories of whom

1 Feldstein 1974. 2 Filer Commission 1977. 3 Hall 1995,7f. 4 Hall 1995,9. 5 Karl 1987,984. 6 This is the other side of the coin of Ron Eyerman and Andrew Jamison’s theories of how movement intellectuals institutionalise themselves into the universities. Eyerman & Jamison 1991,98f. 7 Hansmann 1987. 8 In his book The Logic of Collective Action from 1965 Olson dealt with the production of public goods and introduced the free-rider problem (although he did not use this term). In a nutshell it means that in large groups the impact of one contribution (or the lack of 98 centred on the theme of public good. Hansmann’s distinction of genuinely charitable donative nonprofits and more entrepreneurial commercial nonprofits raised applauds among scholars and hostile reactions among industry. The reason for the latter ones was that the distinction provided powerful rationales for regulating nonprofits and thus was a threat to their independence. The industry increased its own efforts to legitimate its status and used the works of Hansmann, Weisbrod and Lester Salamon2 selectively3. In some cases it is questionable if the word ”research” had the same meaning for foundation leaders and scholars. Many times it was a question of advocacy and evaluative nonprofit justification4.

As we have seen, the nonprofit studies began with economic theories. As the definition says, nonprofits are institutions that are run for some other purpose than profit earning. The definition does not actually prohibit these organisations to collect surplus but it prohibits NPOs to forward profits to controlling persons. Instead NPOs should either invest the surplus or give them to non- controlling persons. This means that economic ”theories of the nonprofit firm are, then, essentially theories of the way in which the presence of a nondistribution constraint affects a firm’s role or behaviour.”5 This set of theories has been called the American microeconomic approach.

it) has only a marginal effect to the system. Some people are willing to use the facilities without paying. In small groups this does not work because the lack of one contribution may cause the collapse of the whole service. The philosophical background of Olson’s theory is in utilitarianism and rational choice theory. In economic theories this means that people are supposed to calculate what choice is economically best for them and act according to it. See Olson 1994. 1 Weisbrod 1975, 1977. 2 Salamon 1987a, 1987b. The use of Salamon’s work became the basis for the dogma of privatisation of public services. Hall 1995,10. 3 When the industry put together a curriculum and resource packet for teachers, it subtly altered Hansmann’s donative, commercial, mutual, and entrepreneurial nonprofits to ‘social benefit’, mutual benefit’ and ‘religious’ as the basic types of NPOs. Hall 1995, 9-10. 4 Karl 1987,984. 5 Hansmann 1987,28. 99

Although economic nonprofit theories have a strong historical connection to the debates of the status of nonprofits in the US, their main questions are claimed to be valid in other countries as well. The main questions lie in the field of cost and effectiveness. On one hand, it is a question of comparison between public, market and nonprofit enterprises. On the other hand, the question deals with management and marketing problems. It is good to remember that the theories have been focusing mainly on the large nonprofit entities like hospitals1, schools, universities, foundations, etc. This has been due to their use of the American Internal Revenue Code records as their source material. That data does not contain either the small nonprofits or the churches because they do not have to send their data to the IRC.

According to Henry Hansmann’s review in Powell’s edition there were two economic approaches to third sector at the end of the 1980s. One focused on the role of nonprofit institutions while the other theorised about their behaviour. In the first category the question was ‘why do NPOs exist?’ The latter asked ‘how do they work?’. Although the questions are bound together, the research had a tendency to focus on one or the other, ”and thus the division serves as a means of organising the literature.” In general the behavioural models of NPOs have been to some degree disconnected from role theories.2

The study of the role of NPOs has also been called institutional choice and according to Christoph Badelt it can be divided into two blocs. He calls them the failure performance approach, which explains the existence of NPOs as a failure of other institutions, and the transaction cost approach, which explains the institutional forms with

1 Hansmann writes: ”... the first efforts to develop economic models of nonprofit institutions focused almost exclusively on hospitals.” Hansmann 1987,27. 2 Hansmann 1987,27f,37. 100 the alternative contractual arrangements.1

The institutional choice approach has focused on the classification of the actors in the field and their mutual relationships. Badelt has defined the task of institutional choice theory to be threefold:

(1) a description of the range of possible institutions which may exist to meet a certain goal in society, (2) an explanation of how institutions are formed, and (3) a comparative analysis of 2 the performance of different institutions.

The main problems have been the continuous shifts in societies between public and private3. Some things that were before private are now public and vice versa. Also the cross national variation is great. In the historical perspective the division of public as an official sector and a private sector in the modern sense is quite new - it appeared only in the end of Middle Ages when the state begun to take care of the public welfare (res publica). Especially, the European legal tradition has emphasised this division with separate administration legislation and administration courts. However this division is mainly judicial and economic. It ignores the other meanings of the word public which classically has been understood as opposite of secret or intimate4. If we use public in these meanings, we have quite another view: all interactions of private actors (individuals, companies, associations, etc.) outside of the private sphere is public5. However, in third sector studies the term public normally is equivalent to the government and its branches.

1 Badelt 1990,55. 2 Badelt 1990,53f. 3 Seibel & Anheier 1990,9. 4 Ancient people had rules that certain amount of men (e.g., 10) form a public meeting. In social movement studies ‘public’ has a connotation mainly to public opinion. 5 This thinking is valid also in juridical sense because all buying acts are public in a sense that they are regulated by legislation and have legal consequences. Some acts are not even valid without special public recognition. 101

The early roots of the nonprofit studies are in two books: The Pluralistic Economy from 1965 by Eli Ginsberg, Dale L. Hiesltad and Beatrice G. Reubens1 and The Economy of Love and Fear from 1973 by Kenneth Boulding2. While the authors pointed out the unstudied field, their impact remained in their inspiration to think over the issues. Neither of the works developed a theoretical framework of the issue.3

One interesting attempt to create a theory was James M. Buchanan’s article on clubs. He tried to bridge the gap between the purely private goods and purely public goods4. He stated that the utility of any good ”depends upon the number of other persons with whom he must share its benefits5.” In some cases public goods (like roads during rush hour) become closer to merit goods because there is a limit of capacity that restricts the use. This bridging lays ground to the organisations that produce shared goods for a limited amount of people6. Clubs are organisations that produce shared goods (like a swimming pool) for a certain amount of people. Buchanan points out that the price of the good is such that it requires ”some co- operative-collective sharing arrangement7.” He states that in each case there is an optimal cost/benefit number of people who share the good although he also notes ”that the optimal club size... will tend to become smaller as the income of an individual is increased8.” The paper of

1 Ginsberg,Hiesltad & Reubens 1965. 2 Boulding 1973. 3 Gassler 1990,139. 4 Public goods, in the economic sense, means that production of a public good costs the same in spite of the amount of people for whom it has been produced. The other criterion is that once the good has been produced its use cannot be limited. A classical example of public good is a lighthouse. Merit goods can be limited to some individuals, for example, education and medical care. 5 Buchanan 1965,3. 6 In a strict sense many public goods that are produced by government are merit goods as well because there are often limitations (like visas) that restrict the use of the good by a certain population. See also Buchanan 1965,13. 7 Buchanan 1965,7. 8 Buchanan 1965,8,12. 102

Buchanan shows that one reason for mutual nonprofits is an attempt to reduce costs of private goods and make them shared goods. It is a pity that his work is not quoted much. It gives light to the part of the nonprofit sector that the ‘classical’ economic theories of nonprofits ignore.

I already mentioned the work of the Filer Commission and Martin S. Feldstein in the beginning of this chapter. However, it seems that both Feldstein and the Filer Commission have become symbolically representative of this discipline: they are mentioned in many theory reviews but not quoted. The actual founder of the nonprofit studies was Burton Weisbrod, who laid the basis of economic theories of the nonprofit sector.

4.2. The Role of the Third Sector

4.2.1. State Failure

Burton Weisbrod’s1 public goods theory (or the state failure theory) was the first economic role in the NPOs in the middle of the 1970s. His theory deals with the state- nonprofit relationship. Weisbrod argued that the government is willing to provide public goods only to meet the needs of the majority. When the need is homogenous the median voter prefers government supply because the state can eliminate the free-rider problem with taxation. There are, however, special needs that governmental services do not fulfil2 as in the case of ethnic and linguistic minorities. This creates the need for many specialised services because the government does not supply them. Sometimes this is because the government is not able to supply enough public goods and sometimes it is seen that it is not the duty of government to provide certain public

1 Weisbrod 1975, 1977, 1988. 2 Weisbrod 1977, 1980. 103 goods. The former case is often faced in the Third World where many services are provided by missions and other agencies. In the latter case it is a question of homogenous demand (as Weisbrod explains) and the role of the state. Nonprofits rise to meet minority demands for public or semi-public goods. In this sense they are supplemental to government services.1

Lester M. Salamon and Helmut K. Anheier have operationalized and tested Weisbrod’s theory in their international comparative project. In general, they found that the data supported Weisbrod’s theory. When ethno- linguistic heterogeneity in a country increases, the proportion of the nonprofit sector increases as well. When heterogeneity increases, the share of private revenues increases as well. However, in the case of education this theory is less helpful. Salamon and Anheier found ”almost no evident relationship between the degree of ethno- linguistic diversity and the scale of the nonprofit education subsector among the countries2.”

Henry Hansmann criticises Weisbrod’s theory in that it leaves two questions open. First, he claims that many (especially commercial) NPO services are not actually public goods but private ones. The examples are health care, day-care, private nursing, etc. These services are not public goods in the sense that Hansmann underlines. Second, Weisbrod cannot explain ”why nonprofit, rather than for-profit, firms arise to fill unsatisfied demand for public goods.” 3

Weisbrod gives an answer to Hansmann’s critique in his book The Nonprofit Economy from 1988. He writes:

Although the purely private enterprise and the government institution have many virtues, they also have serious

1 Hansmann 1987,28f.; DiMaggio & Anheier 1990,140. 2 Salamon & Anheier 1996,21. 3 Hansmann 1987,29. 104

limitations. For example, private enterprise, driven by profit seeking, cannot be relied on to undertake activities, such as pollution control and consumer health and safety protection, that 1 would be unprofitable even if consumers valued them highly.

Thus, Weisbrod sees that there are some tasks that do not interest private companies because there are no possibilities to gain profits. These tasks are the natural field of nonprofits. According to Weisbrod ”every society makes choices about what forms of institutions it will rely on to achieve its socioeconomic goals2.” However, behind his thinking there seems to lie a thought that the basic responsibility of providing goods that create profits belongs to the market and providing other goods belongs to the public sector. The role of the nonprofit sector is to correct the failures of these two sectors. The other issue Weisbrod points out is that these three sectors are interdependent3.

Weisbrod also discusses the misunderstandings concerning NPOs. One misunderstanding is the claim ”that they [NPOs] exist outside of the economic mainstream.” He claims that the statistics simply do not notice the field. Another misunderstanding is that ”all nonprofits are essentially the same”, and Weisbrod underlines the opposite - that they ”are varied a lot.” The third ”misperception is that nonprofits exist almost entirely on the donations of the citizenry” and that they are not ”subject to the economic constraints.” He criticises the thinking where the nonprofit sector is seen as a special niche which lives according to its own rules and is protected from economic competition. Further, Weisbrod sees that nonprofits are not an invention of modernity but ”they have been around for centuries.” In some cases these organisations predate governmental services and in some

1 Weisbrod 1988,5. However, in this book he has adopted Hansmann’s theory of informational inequalities or trustworth (see below). Ibid. 6. 2 Weisbrod 1988,5. 3 Weisbrod 1988,7. 105 cases NPOs supplement state agencies.1

Weisbrod’s understanding of nonprofits is close to that of Etzioni’s although Weisbrod sees nonprofits to be those which ”may not lawfully pay its profit to owners or, indeed, anyone associated with the organization2.” Weisbrod includes into the category the ‘borderline- organisations’ or as he says

hybrid combinations of nonprofits with private firms on the one hand and with governmental organizations on the other... Yet one form of hybrid is the ‘joint venture’ of nonprofits with for- 3 profit firms.

Thus, Weisbrod’s concept of nonprofit organisation covers a wide range of organisations between purely governmental and purely market organisations. He does not limit the concept of nonprofit organisations to those that are classified under the IRC 501(c)3 (tax-exempt and tax- deductible charitable and mutual benefit organisations) or (c)4 (tax-exempt but not tax-deductible social welfare of local employee organisations) categories which are the normal limitation. Instead, he also includes categories (c)5 (labour and agricultural organisations) and (c)6 (clubs, fraternities, etc.)4. He even includes implicitly religious organisations in his definition5 of NPOs. However, Weisbrod’s empirical test case data are only from the long-term care. As we saw from Salamon and Anheier’s results, Weisbrod’s theory does not necessarily fit all cases.

Weisbrod’s theory deals mostly with the micro level and concentrates on economic issues. He is constantly

1 Weisbrod 1988,3ff. 2 According to him, there are three key characteristics that distinguishes them from for-profits, namely ”(1)no one owns the right to share in any profit or surplus of a nonprofit; (2) nonprofits are exempt from taxes on corporate income; (3) some nonprofits receive a variety of other subsidies.” Weisbrod 1988,14. 3 Weisbrod 1988,1f. 4 Weisbrod 1988,61. 5 Weisbrod 1988,102f,133. 106 making comparisons between organisations in the three sectors and states that

(1) In general, nonprofits are less likely than proprietary firms to use prices to ration output and more likely to use waiting lists. (2) There are differences within the nonprofit sector - 1 church-owned and other nonprofits behaving somewhat differently.

The latter notion means that, while in Weisbrod’s test case there were less complaints against nonprofits in general, the consumers were most satisfied with religious nonprofits2. The reason might be that

church-affiliated nursing homes, compared with proprietaries, did have (a) more full-time registered nurses, (b) more full-time maintenance workers, (c) more volunteer workers, and (d) fewer 3 full-time administrators.

Thus, religious NPOs have more people whose duty is to meet the people. As I mentioned, Weisbrod sees the nonprofit sector from an economist’s perspective. In his test case he notes that religious NPOs best satisfy the needs of customers but he is interested only in such aspects like relations between the staff and customers, quality of treatment and quality of accommodation. He does not question emotional aspects, for example, whether the religious atmosphere in these institutions had an effect on the satisfaction of customers. Since he studied the experienced quality of service, there is the possibility that the patients forgave the insufficiencies because of the general atmosphere. The general atmosphere of any organisation effects the well-being of people in it and has direct consequences on the experienced satisfaction. Additionally, there are questions of different networks that might increase the quality of service. Such networks might be either inside the community or inside the sector. In both cases the network might give norms that the organisations have to follow in order to keep their credibility. A related question is the religious

1 Weisbrod 1988,144. 2 Weisbrod 1988,154f. 3 Weisbrod 1988,151. See also Holtmann & Ullmann 1991,645. 107 commitment and internalised norms of the staff. ‘Love your neighbour’ is as an important part of Christianity as ‘love your God.’ In general, while Weisbrod sees the high level of religious nonprofits, the question as to ‘why religious NPOs received such good results?’ remains open.

Weisbrod does not openly use any metaphor, but his material concentrates on health care. Thus, implicitly his metaphor for NPOs is a long time care institution. This picture is easily transferred to other institutions like hospitals and universities which usually have a centralised leadership and are based on professional staff. Often they are also owned by a parent organisation. However, it is questionable if this metaphor can be transformed to federal type membership organisations. In membership organisations the service often plays a minor role compared to its function as a community. This, however, does not mean that his basic thesis of heterogeneity would not be valid in the case of all kinds of NPOs. Based on Weisbrod’s data, this question remains open.

If we look at Weisbrod’s theory from an international perspective, some unstudied areas remain. When Weisbrod concentrates on services he does not deal with such crucial issues as cultural supply and demand1. In his studies of the Finnish Lutheran Mission Juha Kauppinen found that the forces of demand and neglect function in the case of ideological innovations as well2. Kirsti Suolinna also found similar results. She argues that in Finland ‘socialism spread to those areas that revival movements had left empty [and] that at least the Awaked movement resisted socialism3.” If we look at these notions in the case of the role of nonprofits, it means that not

1 If we accept the thesis that the US is not a homogeneous entity, this notion is valid inside the US, too. 2 Kauppinen 1990. 3 Suolinna 1975,53 (my translation - Herännäisyys, Awaker movement is one of the five main religious movements in Finland). 108 only the service is important but the belief system of the organisation as well. If people neglect to use the services of culturally or religiously disgusting organisations, it has nothing to do with the quality of the services. An organisation may produce excellent quality services, but if it is a ‘wrong’ organisations the option is that people do not use those services. If organisations try to compete with their products or services in these kinds of situations, they have to dim their ideological background in order to be accepted. Typical examples of this phenomenon are some American universities with religious roots1, Finnish labour movement’s co-operative2 and Christian missions in some countries where Christian preaching is not allowed.

Thus, Weisbrod’s theory only fits to such situations where different organisations have almost the same degree of acceptability. If the ideological element is included, the quality of services has to compete with the loyalty to one’s own ideology as well. In the context of international NGOs the crucial point often is the predetermined option whether certain organisations (for example, Christian missionary hospitals) are accepted in some cultures (for example, in Islamic countries) or not. These questions are studied in the institutional theory of organisations which I deal with later in this study in chapter 5.4.3.

Heterogeneity theory, which was elaborated by Estelle James, can be seen as an expansion of Weisbrod’s public goods theory. The main argument of James is that NPOs are expected to rise in countries where the ethnic, linguistic and/or religious heterogeneity is high. James borrows from Weisbrod the idea of the NPOs supplementary role of the services for minority groups and makes comparisons between different European countries, particularly Sweden and the

1 The Harvard Guide 1999. 2 Ilmonen 1996,158. 109

Netherlands.1 Since James’ theory is one of the basic theories of comparative international studies, I introduce it in detail in that context in chapter 7.2.1.

4.2.2. Market Failure

The trustworthiness theory (or contract failure theory or market failure theory or informational asymmetry theory)of Henry Hansmann2 is based on the early works of Kenneth Arrow3 in health care and Richard Nelson and Michael Krashinsky4 in day-care. The issues of poor information of the service quality and the question of trust emerged in both studies.

Hansmann’s theory deals with the for-profit / nonprofit choice. It elaborates the informational asymmetry and the trustworthiness by which he means how the public counts the risks of trusting NPOs. He argues that when consumers do not have enough knowledge to value the quality of goods they have to trust the enterprise5. The NPOs are considered more trustworthy because they have, what Hansmann calls the nonprofit constraint (=nondistribution constraint6). People believe that the money they pay is used for the intended purpose and the organisation is not reducing the quality of its services in order to maximise its profits.7

1 James 1990,23. 2 Hansmann 1980, 1987a. 3 Arrow 1963. 4 Nelson & Krashinsky 1973. 5 Such services are, e.g., overseas philanthropy, education, nursing homes and psychiatric care. 6 I remind that the organisation is allowed to make profits but not to distribute them to its staff or owners. 7 Hansmann 1980,838,846ff, 1987,29ff; Weisbrod 1988,6,23,155-159. Weisbrod (142-159) shows that in the fields where both NPOs and FPOs exist (nursing homes, facilities for mentally handicapped and psychiatric care) the NPOs are giving more information to their customers, have more field staff, receive less compliments and use less sedations for active patients (sedations are cheaper than the use of staff) than FPOs. Further, he argued that customers were most satisfied with church related NPOs and ”a nonprofit that was a for- profit firm in disguise would act no differently from a proprietary 110

This notion of nondistribution constraint is also Hansmann’s criterion for a nonprofit organisation. ”In most other respects, the nonprofit corporation statutes closely parallel the statutes that provide for business corporations.” Thus, for Hansmann the third sector is a market sector without distributing profits ”to individuals who exercise control over [the organisation].” This point of view is taken wholly from an economic perspective. The concept of value is equal with the concept of price. It is in the frame of economics where Hansmann develops his ”general theory of the role of nonprofit enterprise.”1

Hansmann also argues that contract failure in producing public goods differs from the normal market failure problem, namely the free-rider problem, in one fundamental sense. According to him, the free-rider problem arises when people are not willing to pay their share of the public good. In contract failure they are willing to do so but they are not sure if they can trust the organisation in cases when there is not enough information on the quality of the good2. In this kind of situation the nonprofit form gives a better guarantee that the donations are used in the intended way. However, this does not mean that nonprofits do not face the free-rider problem. As Loewenberg’s historical analysis shows, the free-rider problem is one of the main reasons for transforming activities from the third sector to the public sector; the third sector does not have power to force people to carry the weight of the costs.

There are also cases where the quality of the service

firm (ibid.148).” 1 Hansmann 1980,838,840,843. 2 Hansmann 1980,849ff. ”It should be clear by now in what way the contract failure problem that we are focusing on here is distinct from the standard public goods market failure - the free-rider problem. The latter is concerned with the lack of incentive to contribute to the cost of a public good, while the former is concerned with the inability to control the use to which a contribution is put once it is made.” (851 n.50) 111 is well known, and in those cases the nonprofit form enables ”a form of voluntary price discrimination.” Especially in the field of performing arts the start-up costs of the production are the main costs and the costs of extra performances or extra audiences are marginal. In these cases the nonprofit organisations keep the prices low in order to reach larger audiences and ‘charge’ more from the rich in the form of donations.1

Hansmann makes a distinction between donative nonprofits and commercial nonprofits. The previous receives its main income from donations and the latter from sales of goods or services. Hansmann also uses the term patrons to describe those who are the ultimate source of organisation's income. This leads to another distinction which concerns the control of an NPO. Those NPOs that are under the patrons’ control Hansmann calls mutual nonprofits, and the other NPOs he calls entrepreunial nonprofits. Both divisions are ”polar or ideal types rather than mutually exclusive and exhaustive categories.” In practice there is a continuum in both distinctions. From these distinctions he gets the following four-field categorisation2:

Mutual Entrepreneurial Common Cause CARE Donative National Audubon Society March of Dimes Political clubs Art Museums American Automobile National Geographic Commercial Association Society Consumers Union Educational Testing Country Clubs Service Hospitals Nursing Homes

Patrons choose NPOs if the inefficiencies do not

1 Hansmann 1980,854-859. He does not argue much as to why rich people are willing to make the contributions. However, this behaviour has been typical in the history of arts - many of the great artists, painters, composers, etc. in European history have been supported by the elite. So, for the contemporary elite, there is a model which is regarded as a ‘must’ among many of the wealthy. The other forms of donations are testaments by which people want to support those issues that have been close to their heart in their lifetime. 2 Hansmann 1980,840ff, 1987,28. 112 overweigh the trust. This is because the basic aim of private enterprises is to maximise their profits, and there is always the suspicion that if the profit maximisation happens by downgrading the quality. In NPOs the managers do not directly benefit from profits and therefore are less likely to cheat consumers. This mechanism is valid for both commercial and donative nonprofits. Donors are more willing to support NPOs because nonprofits are supposed to use the money or their time for the intended purpose. The consequence is that NPOs flourish where trustworthiness is important. Trustworthiness also has another side. Another line of theory holds the thesis that if one does not gain provisions or residual, she/he is less willing to cut unnecessary branches from the organisation. This means higher economical ineffectiveness.1

Furthermore Hansmann argues

that the relationship between the donors to a donative nonprofit firm and the managers of such a firm is analogous to the already much analyzed agency relationship between the shareholders in a publicly held business corporation and the managers of the 2 corporation.

Like the patron, the shareholder ”is in no position to see for himself how the management is using the corporations funds in general.” He can only trust that

(1) management will seek to obtain a reasonable rate of return for the shareholders on their contributed funds and (2) management will take for itself no more than reasonable 3 compensation for services rendered.

The only difference of for-profit companies is that in nonprofits the first constraint is replaced by the mission

1 Hansmann 1987,29ff; Seibel 1989; James 1990,22; Anheier 1995,19f. On the other hand, Weisbrod (1988,33-41) points out that ”cost per unit of output depends on the quality of output (ibid.34)” and that ”cost efficiency cannot be compared when the bundle of outputs is different (ibid.38).” 2 Hansmann 1987,31. 3 Hansmann 1987,31. 113 of the organisation. Hansmann admits that there are also some nonprofits that are not responses to contract failure. He mentions some exclusive clubs where customers can judge the level of the service they purchase. In these cases the nonprofit form is a means to keep the control in the patrons’ hands.1

Estelle James has criticised Hansmann’s theory from a comparative viewpoint. First, she notes that in many countries NPOs do not compete with for-profits but with the government. The for-profit market is excluded and the choice to organise something is between the state and the NPOs. Second, James points out that the shorthand of these theories is that they do not recognise the public subsidies to the NPOs. Why does the state subsidise the potential competitor? The third weakness of Hansmann’s theories is, according to James, that they do not explain the variety of NPOs in different parts of the world.2

Salamon goes even further in his critique. He points out that neither the state failure nor the market failure theory interprets why the third sector is needed at all. Why can the state and the market not compensate their mutual failures? He questions the validity of both failure theories by noting that

because the nonprofit sector is viewed as a substitute for government providing goods and services that the full political community has not endorsed government support to nonprofit 3 organizations has no theoretical rationale.

Both James’ and Salamon’s critiques point to important weaknesses of the economic theories. The third sector in both market failure and state failure theories does not have an existence by its own right. It is always something that does not fit into the original system. Obviously behind this thinking is the idea that the distinction into

1 Hansmann 1987,33. 2 James 1990,22f. 3 Salamon 1987b,109,. 114 two sectors is enough. Either something belongs to the realm of market forces or it is protected from them in the bosom of the state. The failure theories are attempts to explain the third sector in the realm of economy. They do not deal with the informal sector or ideological sector at all. However, in spite of the pointed weaknesses of Hansmann’s theory, it has its merits, too.

Although the roots of the third sector lie deep in history, the expansion of the sector is quite a recent phenomenon. Hansmann’s theory explains why new NPOs arise in the situation where there has already been a stable market system that could, in principle, arrange the needed services1. In the Anglo-Saxon context, where the state has been hesitative to widen its responsibilities, the natural choice is between the market and nonprofits. An additional option is that the society has changed in a way that the family can not any more take care of these services. In other words this means that when the families on the farms were almost self-sufficient, families in the towns were not. It seems that similar to ancient Israel urbanisation changed the face-to-face services to organised ones.

The main question in the new situation of families in towns was ”how can we be sure that we will not be cheated?” There have surely been enough cheaters. This is even seen in the popular myths of the wild west stories, where, quite often, there is a figure of a wandering doctor who sells a miracle medicine. Thus, Hansmann is right that in the situations where the quality of goods cannot be judged consumers have to trust the service provider. In small villages this is easy even in the case of for-profits because the entrepreneur is a neighbour as

1 Hansmann notes: ”At least where corporations are concerned, nonprofits long antedate their for-profit counterparts, which are in fact relative latecomers on the organizational scene… Yet today we are confronted with a well-articulated rationale for organising economic activity along profit-seeking lines, and it is the nonprofits that seem to call for explanation.” Hansmann 1980,843,note 32. 115 well, and thus under social control. In big towns the situation is different and a service provider must have a good reputation.

Anheier faces this problem when he criticises the core of Hansmann’s theory. He notes that ”the concept of trustworthiness implies not trust, but risk” and that ”unlike risk, trust cannot be calculated and expressed in terms of probabilities and utilities... trust involves presumptions about the reliability and honesty of producers.” He insists that the theories must recognise the fact that NPOs often are religious organisations. Their value orientation ”is most responsible for the trust they enjoy.” From this point of view, even the profit- maximising behaviour can be incompatible with the ultimate goals of the organisation.1

In spite of Anheier’s scepticism of the possibility of calculating trust, he has used studies that have been based on calculating trust when he tried to operationalize the concept with Salamon2. They used the World Values Survey of 1994 and linked the trust in nonprofits with trust in for-profit organisations. They supposed that the trust in business companies means that there is no need for nonprofits. They found out that in different societies there were no significant differences of trust in different companies. This result was interpreted that their ”data provide little support to this [Hansmann’s] theory.” However, it is highly questionable if the trust in NPOs and the trust in FPs could be linked in this way. The World Values Data tells only that the major companies in the country are generally trusted. It does not tell in what respect they are trusted. If I buy a radio, I can evaluate the price and quality of it, and if I fail and it does not function properly, the consumer legislation

1 Anheier 1995,19f. 2 Salamon & Anheier 1996,12,22f. 116 ensures that I get my money back1. Most companies that sell these kinds of goods are trustworthy. Hansmann does not deny this, and he underlines that when the good cannot be evaluated, trust is needed. Moreover, in health and social service industries, which are the special target of Salamon and Anheier, FP activities might be in such fields that then can be measured. Additionally, the data says nothing about how large the FP sector is in these industries compared to the NPS and public sector. The analysis raises a suspicion as to whether their data is comparable to their target. In general, it seems that based on Salamon and Anheier’s data Hansmann’s theory is not disproved.

If we evaluate the usefulness of Hansmann’s theory in the case of INGOs, we see that his basic argument about trust is valid in international contexts as well. Especially donative aid-organisations are in a situation where trustworthiness is crucial to their functioning. They have to gain respectability among donors, whether they be individuals, corporations, states or IGOs. Additionally, they often work in crisis and war situations and they must be respected on both sides of the frontier as well as among the beneficiaries. However, this respectability is a much wider issue than just economic respectability. It deals with neutrality and other political concerns, too. I come to these themes later when I evaluate institutional theories of organisations.

4.2.3. Voluntary Failure

Third party government theory, which was elaborated by Lester M. Salamon, turns the whole failure concept upside down. He criticised ”the conventional wisdom” that ”government support of the voluntary sector is a relatively recent development.” On the basis of historical

1 Of course, this works only in countries that have a legislation that protects consumers. 117 documents he argued that the remarkable government support has roots in the pre independent time of the USA. However, in that time the distinction between public and private did not play the same role as today. He shows that when the state created its infrastructure the policy was that it used existing organisations instead of creating new ones. This happened in two ways. First, the state helped nonprofits with subsidies to an extent that NPOs could carry on their tasks. Second, when social problems escalated and state intervention was needed, the state used existing organisations instead of creating new bureaucracy. Accordingly Salamon argues that the existence of nonprofits is neither due to market nor state failure. On the contrary it seems that state intervention takes place because of voluntary failure.1

Salamon uses

the terms nonprofit, voluntary, and charitable interchangeable to refer to a broad spectrum of institutions that are exempt from federal taxation, eligible to receive tax-exempt gifts, engaged in direct service activities aimed at benefiting persons beyond the organization’s own members, and formally controlled by 2 private - normally - unpaid board of directors.

This definition follows ordinary definitions that are based on US tax legislation. More interesting is Salamon’s list of exclusions. He excludes

(1) those whose principal function is the granting of funds as opposed to the provision of services (for example, foundations); (2) those primarily devoted to religious worship; or (3) those providing services primarily devoted to the organization’s own members rather than to a broader public (such as trade 3 associations, fraternities, sororities, labor unions).

These exclusions show that Salamon sees the third sector basically from the traditional British charity perspective where political activity and self help were excluded. In the first list the stress is evidently on

1 Salamon 1987a,b. 2 Salamon 1987b,100. 3 Salamon 1987b,100. 118 large institutions. At the end of his list he mentions only two groups that may in principle be totally run by volunteers. It seems that for Salamon the model of nonprofit organisation is a large institution like a hospital or a university. It is an entity that needs a patron, or a group of patrons and the services are given from top to bottom. These definitions raise some critical notes.

First, when Salamon excludes foundations from the nonprofit category, he excludes one basic source of the funding of other kinds of NPOs. If his exclusion refers to such organisations as family foundations that aim to guarantee the income and education of the family members, Salamon should make similar distinctions as Hansmann did in the previous chapter. However, in that case the criterion of nonprofitness is no longer on the basis of organisation form but on activity basis. Second, when he excludes ‘those primarily devoted to religious worship’, he is no longer speaking of the voluntary sector because much of the voluntary work is done in congregations. An additional question is what he means by ‘primarily’? Most of the congregations have wider missions than only organising Sunday services. If he means that churches and other religious bodies are cases per se, he should problematize the question. Third, when he excludes membership benefiting organisations, he ignores that in many cases the membership is open to everyone and is only a question of practical arrangements. Additionally, the majority of ( at least Christian) fraternities are somehow involved in philanthropic activities.

Salamon’s definitions of NPOs are crucial to the third sector research because of his central position in the international comparative studies1. Salamon uses the terms voluntary, nonprofit and charitable interchangeably;

1 See chapter 7. 119 ignoring that they have different content1. He imposes his pre-understood notion of the concept of nonprofit to other concepts as well. This raises serious questions of the theoretical basis of his work. Although Salamon tries to create a theory of nonprofits, his theory covers only a small fraction of them.

In spite of the terminological and boundary weaknesses, Salamon’s theory has also its merits. His main contribution is that he puts nonprofit organisations in the centre of the research. The third sector is not any more a residual category but a field which gives birth to new innovations and which supplies these innovations to other sectors. Thus, the third sector is a sphere of its own.

Salamon sees the relationship of the nonprofit sector and the government in a similar way as the European subsidiarity thesis: state intervention is needed only as the last resort. The other similarity is that both Salamon and the subsidiarity thesis emphasise the private sector as the main channel of service distribution.

Another similarity is in the notion that privacy must be protected from the state. The difference between these two approaches is that, in Europe, the theme was linked to an old debate between the Caesar and the Pope about who controls citizens. In that struggle the Pope allied with those forces that aimed to protect privacy from the state intervention. In America it was question of citizens’ self-protection from both the Caesar and the Pope2.

1 Later he, for example, uses the concept of civil society meaning the nonprofit sector. Salamon & Anheier 1996, title. 2 In a way the roots of this kind of thinking can be found in ancient Rome, where Cincinnati modelled the volunteer citizen who serves the state when needed. It can also be found in many modern national crisis administration systems: in the civilian structures the needs of defence and rescue are embedded in a way that they can be easily transformed to their purposes. Perhaps the Red Cross is the most well known example: in normal situations the Red Cross acts like any 120

One problem of Salamon’s theory is that it focuses on situations where there is some kind of agreement that the state has to get involved. There have also been situations where the state, for ideological reasons, has occupied the territory of nonprofits against their will. Examples can be found in Nazi Germany1 and in the former socialistic block. The same tendency was also seen in the Nordic welfare state when primary and secondary schools and hospitals were municipalised.

If we forget Salamon’s definitional exclusions, his theory, in general, fits into some cases of the INGO activities. There are many activities that are now run by UN organisations which were earlier run only on the INGO’s basis. Refugee work is one of the best known examples. Basically the UNHCR2 and the UNRWA3 have their roots in the prisoner of war (POW) work that the YMCA and the Red Cross ran during the Second World War. After the war, POWs became PWXs (ex POWs) and in many cases refugees. The YMCA and the Red Cross were already in the camps when the formal decisions of refugee aid were made in the Allies’ Headquarters4.

As we see, all failure theories have one presupposition about the ideal situation. Weisbrod sees that production of public goods is a responsibility of the state while Hansmann sees that the market is the normal way to produce public and quasi-public goods. Finally, Salamon sees that they are originally products of civil society. In all of these theories the present situation is in some way an anomalie or an exception. We can see how the metaphors and world views of the researchers frame their theories as well. There is always some kind of pre-

nonprofit organisation but in crisis situations it will be transformed either to meet the needs of a catastrophe or national defence. 1 See Bauer 1990b. 2 Holborn 1975,124f. 3 Graham-Brown 1989,97-110. 4 Strong 1955,572-578; Kilpatric 1955; Cedergren 1969,83f. 121 existing code that directs how a researcher collects and understands the data. In Geertzian terms, their model of certain NPOs are also a model for other nonprofits1.

From the perspective of the sociology of religion one would see the field still from another perspective. As the historical chapter showed, the third sector is largely based on Christian philanthropy organised by churches. When these services were transformed either to state/municipal services or to secular nonprofits or even to market goods we could speak of church failure. Enlarging Ernst Troeltsch’s church - sect -typology2, J. Milton Yinger writes:

The ecclesia… has become so well adjusted to the dominant elements that the needs of many of its adherents, particularly from the lower classes, are frustrated… There tend, therefore, to be widespread indifference, sectarian protests, and secular 3 opposition.

Thus, the ecclesia or established church has to campaign on two fronts: against secularism and against sectarianism. After Troeltsch and Yinger a third front has emerged: against new religious movements. As we have seen, traditional churches have lost ground on all three fronts. Many originally religious institutions have become secular ones (e.g. Harvard) and free churches and new religions have emerged and founded their organisations. At the same time the expansion of the welfare state has transformed church based organisations to parts of the state bureaucracy.

However, I am quite sceptical in the case of attempts

1 Geertz 1973, 93. 2 Troeltsch describes ecclesia to be ”overwhelmingly conservative, which to a certain extent accepts the secular order, and dominates the masses; in principle, therefore, it is universal, i.e. it desires to cover the whole life of humanity… The fully developed church, therefore, utilizes the State and the ruling classes and weaves these elements into her own life; she then becomes an integral part of the existing social order.” Troeltsch 1992(1931),331. 3 Yinger 1969,148f. 122 to reduce complex phenomena to one single determinant. All these determinants influence and depend also on other opportunity structures. What trend is going on and which sector is gaining and which sector is loosing ground is a continuos process. At best, these theories can explain the potential reasons why some shifts between sectors may happen. These potential reasons are not determinants - they can actualise or they can remain latent. Additionally, all these failure theories view the third sector from the consumer or user perspective. However, there is also the donor perspective, which is viewed in the next theory tradition.

4.2.4. Transaction Costs Approach

The concept of transaction costs was developed by Oliver Williamson in 19751 to explain why business companies sometimes use their own resources and sometimes buy the service from outside of the organisation2. Christoph Badelt has summarised the concept as follows: ”Transaction costs are defined as costs which occur in preparing and monitoring economic transactions, in particular information costs, decision-making costs, and costs of control3.” The approach in the Williamson tradition sees that uncertainty in transaction is the dominant cause which creates NPOs. In this sense the approach resembles the informational asymmetry approach of Hansmann.4

The triadic transaction model, developed by Michael Krashinsky5 in 1986, holds that the relationship between producers and consumers requires more than two parties. If these two parties are not in a face-to-face situation or if there are few donors and many anonymous recipients, the

1 Williamson 1975. 2 Douglas 1987,51. 3 Badelt 1990,58. 4 Badelt 1990,59; Holtmann & Ullmann 1991,641. 5 Krashinsky 1986. 123 costs of the transaction will be too high. In these kinds of cases some kind of stock is needed. Nonprofit organisations serve as intermediate stocks in the philanthropy market. This both minimises the transaction costs and enables NPOs to use small contributions effectively as well.1

One merit of Krashinsky is that he has differentiated the informational problems between producers on one hand and consumers and between different consumers on the other. The latter problem is important in the case of joint consumption of collective goods.2

Avner Ben-Ner and Theresa van Hoomissen have studied informational problems and advanced the theory of stakeholders. The authors start by adopting Hall’s (see chapter 3.3.7.) definition of NPOs in which they include the nonprofit constraint. Thus, Ben-Ner and van Hoomissen

regard such organizations, at their inception, as coalitions of individuals who associate to provide themselves and others with goods or services that are not adequately supplied by either for- 3 profit or government organizations.

Ben-Ner and van Hoomissen do not speculate about the reasons of the state/market failure but take it as a fact. Instead, their point of view is in the processes of NPO formation. The discussion is based on the state/market failure theories. The state and the market are the proper ways of organising services and the NPS is a field that corrects the failures of these two4. Authors state that when the NPOs correct the failures

they do so not (necessarily or primarily) through the benevolence of nonprofit entrepreneurs or managers, but through demand-side 5 stakeholder (consumer, donor, or sponsor) control.

1 Anheier 1995,20f. 2 Badelt 1990,59. 3 Ben-Ner & van Hoomissen 1991,521 (italics in original). 4 Ben-Ner & van Hoomissen 1991,523. 5 Ben-Ner & van Hoomissen 1991,521 (my bolding and italics). The authors explain that ”supply-side stakeholders supply resources; they 124

Stakeholder control eliminates, according to Ben-Ner and van Hoomissen, ”any problems of asymmetric information between two parties to a transaction, and stakeholders may safely reveal their demands1 and make contributions without fear of exploitation.” However, control is not automatic but ”the demand for nonprofit provision by stakeholders can be met only if some stakeholders also engage in nonprofit supply.” On this theory basis the authors make four claims:

First, there is a conflict of interest between demand- and supply-side stakeholders. Second, the nonprofit form is a potential means of control by demand-side stakeholders. Third, a nonprofit organization will be formed if some demand- side stakeholders find that the benefits of control outweigh its costs and if this benefit is greater than the net benefit by purchasing elsewhere. Fourth, nonprofits will be established by those demand-side 2 stakeholders for whom the net value of control is largest.

Moreover, Ben-Ner and van Hoomissen explain that when the quality of service is not clear, the demand- stakeholder control makes sure that the quality of (non- rival and non-excludable) trust goods3 is similar for non- controlling users as well as controlling users4. However, the demand is not enough: supply is also needed if an NPO is to be founded. Suppliers can be either the potential users of the service (parents), leaders of some organisation with which the stakeholders are associated

may be workers, managers, providers of equity or debt, banks, parent organizations, the state, or suppliers. Demand-side stakeholders use or have an interest in the organizational output; they may be clients, customers, donors, the state or sponsors (idem, 522, note 3). However, they do not include ”those that are only the beneficiaries of a good made available to them by others (idem 523). 1 The authors use the term ‘demand’ ”to include all willingness and ability to pay, even when it is purely altruistic.” Ben-Ner & van Hoomissen 1991,522. 2 Ben-Ner & van Hoomissen 1991,521. 3 Ben-Ner and van Hoomissen define trust goods as ”club goods and mixed goods for which there is an asymmetric information problem to the disadvantage of stakeholders.” Ben-Ner & van Hoomissen 1991,527. 4 The authors use customer-controlled day care as an example where parents in the board cannot reduce the level of service to non- controlling customers without reducing the level of the service they use themselves. Ben-Ner & van Hoomissen 1991,525-529. 125

(community centre, church) or professional administrators who want to create a job for themselves and/or have altruistic motives1. However, the authors underline that

although the process of nonprofit formation can be facilitated by individuals other than stakeholders, demand-side stakeholders must play an active role in forming and operating a nonprofit organization, because demand will not materialise unless the 2 organization is stakeholder controlled.

Although Ben-Ner and van Hoomissen argue that both demand and supply stakeholders are needed in order for a nonprofit organisation to be formed, the authors’ theory stresses the role of demand-stakeholders. The theory is basically a theory about how people organise by themselves a service that is not available. The donor side remains less theorised. For example, Ben-Ner and van Hoomissen do not theorise the role of the elite (like Hall and DiMaggio and Anheier in chapter 2.4.), the role of different missionary enterprises or the role of worker co- operatives3. Moreover, foundations which form a significant share of NPOs have been accused of being totally controlled by donors. The claim is opposite to Ben-Ner and van Hoomissen’s argument. The concept of charity good is too vague to explain the behaviour of the donors. This dilemma might arise from the metaphor of the authors. For them a model for an NPO is basically a local day care centre controlled by parents. It seems that Ben- Ner and van Hoomissen’s metaphor dominates the theory so much that authors ignore the other existing models. Their theory remains to be a theory of small, customer led community nonprofits.

Both Krashinsky’s theory and Ben-Ner and van Hoomissen’s theory require that there must be a forum

1 Ben-Ner & van Hoomissen 1991,532-535. 2 Ben-Ner & van Hoomissen 1991,540. 3 Victor Pestoff has argued that ”cooperatives have rapidly become one of the most important alternatives to the public provision of social services… in Sweden.” Cooperatives are of two kinds: either worker co-operatives or consumer co-operatives. Pestoff 1991,9f. 126 where supply and demand can meet. In the cases of trust goods and public goods the natural field for this meeting is a nonprofit organisation because stakeholder control ensures that the level of service is adequate. In the case of INGOs this notion is valid as well, but the control is mainly in the hands of donors or members. In the case of those INGOs that have agreements with governments or the UN, the situation is a bit different. In these cases the donor is also the customer who buys the service (e.g. disaster aid, refugee aid or development projects). However, even then it is questionable if the role of demand-stakeholders is as crucial as Ben-Ner and van Hoomissen state. Krashinsky’s idea of a philanthropic stock market seems, in turn, to fit in the international field, too. Organisations collect their income from small streams and direct the resources to their projects.

4.2.5. Evaluation of the Nonprofit Role Theories

All failure approaches and transaction cost theories assume that institutions emerge as a result of choice processes. These theories are basically based on rational choice theory. Several questions could be made if human beings act rationally and calculate their actions. First, as Ernst Cassirer has argued, the action often comes first and the explanation follows1. In economics this phenomenon is seen, for example, in facilitating impulse buys and in advertisement strategies. In both cases the presupposition is that a consumer does not calculate rationally what she/he really needs. Second, as Marilyn Taylor notes, in the case of social services individuals often make choices under considerable stress2. Thus, the situations do not necessarily favour rationality. Third, as Walter B. Mead

1 Sigbjørn Stensland has said this as follows: ”The interesting point from Cassirer's point of view is that action, the running, takes place before the feeling of the state. The cognitive aspect then is something which is the result of the whole sequence. Accordingly, it is not a judgement of how to act, but only a registration of what has occurred." Stensland 1986,71. 2 Taylor 1992,161. 127 argues, there is a distinction between reason and will:

while not free to ignore deliberately all the constraints of reason, once reason has assessed the possible, will is absolutely free to leave the guidance of reason behind and to fly in the 1 face of not only the true but also the good and the beautiful.

Christopher Badelt critiques that ”the question of who actually makes the choice is hardly touched.” He further asks whether, for example, a patient actually has a possibility to make a choice. Often the politicians or voters make the decisions and thus it is more a question of political economy than private economy. He states:

It is naïve to assume that, in a European welfare state, decisions on the institutional type of social services provision only consider (transaction) cost issues. Political preferences (like a positive or negative attitude toward government 2 intervention) also play an important role.

Economic role theories, in general, are controversial: they seem to exclude each other as explanations of the emergence of the nonprofit sector. On the other hand, it also seems that they focus on different periods of history or different kinds of organisations. Salamon’s theory sees the historical roots of the third sector and explains how public services were first developed in the third sector. As we have seen, Salamon’s theory is supported by historical studies.

However, there was significant growth of NPOs and NGOs after the Second World War. During this period there already existed a developed market economy. Hansmann’s theory explains the role of NPOs in this situation when the market was seen as a natural way of producing services. New organisations emerged as a choice to market forces. However, because there was already a model for philanthropy it is questionable if the choice of a nonprofit form was only a question of market failure. The old model of philanthropy was still alive - it supplied a

1 Mead 1983,71 (quoted by Story 1992,15.) 2 Badelt 1990,61f. 128 natural way of organising common projects. Additionally, the nonprofit form offers a possibility for participation. The activity itself is important, not only the output. In the Finnish Lutheran Church this phenomenon has been called ‘sacrament of intercourse’ which means that people have social needs that are satisfied when they participate in different activities. These themes are discussed in detail below in the chapter 6 on altruism and voluntarism.

Weisbrod’s theory of state failure fits in the cases where government is hesitant to increase tax load. This kind of situation has been prevalent in the Western countries during the 1980s and the 1990s. States have reduced their responsibilities and concentrated to services that have been seen as their core functions. In the case of Third World countries it is questionable if we can speak of state failure because the extent of the state offering services may be a foreign loan and not part of the indigenous culture. However, if the state services are commonly preferred, Weisbrod’s theory explains the incompetence of the state because lack of resources.

The triadic transaction model seems to explain more about how the nonprofit sector works than actually the reason why nonprofits emerge. However, when nonprofits have emerged, they definitely have a role similar to stock markets.

4.3. The Behaviour of the Nonprofit Organisations

In nonprofit behaviour research there are no similar hallmark theories as in the role studies. However, there are some good reviews of nonprofit behaviour studies. Thus, in this chapter I rely on these reviews in order to give a view of which kinds of themes and theoretical ideas have emerged in the literature. 129

4.3.1. Organisational Effectivity

Optimising models form the majority of the theory in nonprofit behaviour research. They are mainly derived from the neo-classical economic tradition. However, the idea of maximisation of profits does not fit well in nonprofits. Instead, the optimising models have focused on attempts of maximising the quality or quantity of services or on attempts of maximising organisation’s budget. In the cases of quality and quantity it is mainly a question of effectiveness and in the budget case it is more a question of the status needs of the organisation itself. The studies have mainly concentrated on schools and hospitals.1

In the case of special items like efficiency, it is sometimes hard to distinguish between what is economic analysis and what is sociological. Peter Halfpenny has argued that rational-action theorists’ work especially ”falls within a tradition in economics that takes rational calculation to be the general organizing principle of social life and extends economic analysis to noneconomic transactions of all kinds2.” Therefore I also include sociological analyses here. Below I refer to two reviews which show the different emphases of the studies at the end of the 1980s and the 1990s. According to Anheier, the majority of the theoretical work was done in the 1980s, and the 1990s has been a period of empirical tests3.

Rosabeth Moss Kanter and David V. Summers introduce the problem of measuring efficiency in nonprofit organisations as follows: ”The centrality of social values over financial values… complicates measurement for nonprofit organization.” They continue:

…the centrality of mission for nonprofit organization places

1 Hansmann 1987,37. 2 Halfpenny 1999,204. 3 Anheier 1995,15. 130

limitations on their flexibility of action. Money can be obtained in a number of ways; social values cannot… Without their mission, 1 the organizations’ reason for being collapses.

Other problems that Kanter and Summers note are that goals often are not clear, there are multiple goals inside the organisations, goals are not properly operationalised, and long term goals and short term goals are often different and even contradictory.2

Kanter and Summers see the other side of the analysis, too. They note that not only the organisational goals influence the definitions of effectivity but the frames of organisations as well. Basically it is not a question of ”how to measure effectiveness or productivity but what to measure.” It is a question of which kind of cognitive frame the researcher has of the organisation she/he is studying. Authors note that old rationalistic and voluntaristic models of organisations were based on

assumptions about goal consensus, unity of purpose, and the possibility of discovering universal performance standards… [and] were more likely to see the organisations as controlling all variables. Classic definitions of organizational effectiveness and models of measurement often favored, implicitly if not explicitly, some 3 constituencies over others.

Opposite to this, political models state, according to Kanter and Summers, that

multiple stakeholders both inside and outside compete to use an organization for their purposes and to set performance standards that will advance their interests… [and] make it clear that organizations may not control all the factors that influence how 4 their effectiveness is defined.

Kanter and Summers further explain how various political models explain the effectivity differently. A multiple- constituency or multiple-stakeholder approach sees that ”different constituencies actively prefer

1 Kanter & Summers 1987,154f. 2 Kanter & Summers 1987,155ff. 3 Kanter & Summers 1987,158 (italics in original). 4 Kanter & Summers 1987,158 (italics in original). 131 different kinds of effectiveness measures” because they have different goals and interests1. This means that there is a continuous bargaining process and the ”effective organisations are those that achieve the purposes established by the winning actors in bargaining process.” Authors state that the ”organisational development model go even further in tying effectiveness to the achieved consensus in the bargaining process… better decisions occur with better relationships between constituencies.” Finally, the ”multiple-goal model explains organizations as composed of shifting coalitions of subgroups” and sees effectiveness ”as the degree to which the organization is instrumental for both its inside and outside constituencies.”2

Kanter and Summers end their article with five dilemmas of nonprofit performance measurement. First, ”nonprofit organizations tend to provide services rather than manufacture goods, but service is often intangible and hard to measure.” This is bound to the fact that the income of an NPO ”depend only partially on fees for services… The needs of donors (of money or time) may play a much bigger role.” In other words, nonprofits are not as dependent on client opinions as for-profits are. Second, ”goal conflicts interfere with rational planning… without clear specific statements of intended results, it is difficult to assess performance.” Third, ”the focus in nonprofit organizations is likely to shift away from output to input.” This means that ”planning becomes more concerned with fund-raising or resource inputs than with services.” Fourth, if the goals are not clearly defined there is a potential conflict between the official mission

1 In their case study Kanter and Summers found that the board of directors was actively guarding the mission and structure of the organisation with the support of those managers that had grown up being ”the second generation” in the service of the organisation. New generation of managers try to push the organisation towards a holding company model and they emphasise professional managerial skills pro mission. Kanter & Summers 1987,160f. 2 Kanter & Summers 1987,158f (my italics and bolding). 132 and operative goals. Finally, ”professional standards create rigidities and interfere with new responses to changing constituency needs.”

Eleven years later Daniel P. Forbes reviewed the empirical studies on nonprofit effectiveness. He agreed with Kanter and Summers on the issue of unclear goals of NPOs and problems of measurement and stated that

any discussion of effectiveness must begin with an equally problematic discussion about which - or more precisely whose - 1 criteria of effectiveness are to be employed.

According to Forbes, there are three major approaches to organisational effectiveness:

a) the goal-attainment approach; (b) the system resource approach, which emphasizes organizational resource procurement; or the (c) reputational approach, which associates effectiveness with the reported opinions of key persons, such as clients or 2 service professionals.

The first two represent the early studies. The goal- attainment approach understood that organisational goals are identifiable and unambiguous. It ”defined effectiveness as the extent to which organizations succeeded in meeting their goals.” As we saw above, the problem of this approach is that ‘official goals’ and ‘operative goals’ are not the same and in both cases the goals are not exact. This ambiguity of goals led Amitai Etzioni3 to propose a system model of analysis. The system resource approach focused on the survival of an organisation4 and has been used in three different emphases. The open system approach saw effectiveness as ”organisations’ ability to exploit resources from their environment.” The internal process approach focuses on decision making, information management and control. The

1 Forbes (1998,184f) following Kanter & Summers 1987,155f. 2 Forbes 1998,184. My bolding. 3 Etzioni 1964. 4 Compare to the resource mobilization approach in social movement studies! 133 human resources approach also looks at internal processes but concentrates on the well being of the employees.1

In the late 1970s the approaches presented above were criticised for not having a sole universal model for the measurement of effectiveness. This criticism led to multidimensional approaches which measured effectiveness in several ways simultaneously. As a variant of this, Robert E. Quinn and John Rohrbaugh2 developed the competing values framework which has three value dimensions: organisational focus, organisational structure, and organisational means and ends. The need to align effectiveness criteria to the needs of the constituency led to the reputational or perception-based approach. It ”measures effectiveness according to the self-reported opinions of some set of persons, usually clients, staff, or outside professionals who are familiar with the organizations at hand.”3

A variant of the goal-attainment approach is the mission accomplishment approach which Robert M. Sheehan, Jr. made with his colleagues. Sheehan claims that the previous studies do not find the unique nature of philanthropic organisations. He defines the mission of an organisation as ”its commitment to make a difference in the world in which it operates, to produce results for others beyond its own borders.” The approach focuses on the mission statements of organisations and seeks the organisations’ own measurements about how the mission is fulfilled. The approach does not focus only on tactical goals but the raison d’être of the organisation as well.4

A newcomer to the field is a set of process studies which have emerged after the middle of the 1990s. These studies can also be characterised as emergent or social

1 Sheehan 1996,111f; Forbes 1998,185f. 2 Quinn & Rohrbaugh 1983. 3 Forbes 1998,186; Sheehan 1996,112f. 4 Sheehan 1996,113f. 134 constructivist because their main point is that the criterion for effectiveness is socially constructed. In this approach assessments of effectiveness are neither objective facts nor irrelevant. The definitions of effectivity have a meaning but

the meaning is (a) created by the individual or organizational actors involved, (b)specific to context in which it was created, 1 and (c) capable of evolving as the actors continue to interact.

When we look at these two reviews of nonprofit behaviour studies, we see that the concept of efficiency is vague. In organisations there are various constituencies that value different issues and prefer criteria that support their understanding of efficiency. Thus, there is potential conflict threatening all of the time. The question of efficiency seems to be closely bound to the raison d’être and to the identity of the organisation. If the identity and the mission are not clear or there are controversial opinions of them, the energy of the organisation may be used in internal power struggles instead of for its main purpose. Thus, Richard F. Elmore seems to find the core of the problem when he states that an effective organisation is one that

can build consensus between policymakers and inplementators so 2 as to create joint commitment to the goals of the organization.

4.3.2. Employment

EMPLOYMENT became a big issue in third sector studies when Jeremy Rifkin published his book The End of Work3 in 1995. Rifkin argued that information technology leads to same kind of revolution as the mechanisation of farming4. Earlier, the industry could absorb the labour force coming

1 Forbes 1998,195. 2 Quoted by Kanter & Summers 1987,159. 3 Rifkin 1995. See also Rifkin 1996, which is the same compressed into an article. 4 Rifkin’s theories are in the same line as such researchers as Alvin Toffler(1971, 1981), Andre Gortz(1989), John Naisbitt & Patricia Aburdene(1982, 1990), and Ulrich Beck(1992), who have pointed out the same things much earlier. Koistinen & Suikkanen 1997,12-14. 135 from rural areas. Then the service sector absorbed the surplus manpower of the industry. Now when the service sector is reducing its work force, there are two ways to handle the massive structural unemployment, namely, the sharing of work and the third sector1.

Rifkin has been criticised for his pessimistic view of the work force’s future, for ignoring the possibilities of the welfare state, and for overestimating the possibilities of the third sector. However, the important point of his book is the critique of the economic paradigm: new technology increases productivity, which reduces costs, which increases the supply of cheap products, which improves purchasing power, which widens the market, which creates new jobs. It is well known that already in the 1960s the Club of Rome pointed out that in a limited system unlimited growth is not possible.

Rifkin’s theory introduces a new dimension to the role of nonprofits: an NPO can be sometimes the most effective form of self-employment. Of course unemployment can be seen as either market or government failure, but the point of Rifkin’s theory is elsewhere. Rifkin underlines that self-employed people also create a new demand with their nonprofit enterprise. In this case, the form of association guarantees some advances compared to those of a for-profit firm. Tax exemptions, governmental support and trustworthiness have been mentioned, but the nonprofit form is also the easiest way of obtaining the status of a juridical person that enables legal contracts. This is why many work pools are in a form of the association. These issues have been studied in the field of social policy research.

LABOUR ECONOMICS has been a larger field where the

1 Rifkin’s thesis on the third sector is supported by, for example, Salamon and Anheier who note that their data from 1990 and 1995 shows that nonprofit employment grew almost four time faster than overall employment. Salamon & Anheier 1999,14. 136 decisions to work and decisions to employ have been studied. This field includes both employment and the voluntary work force. Before entering into theories it would be useful to take a preliminary glimpse into the comparative international studies and look at some data in order to have a general view of the size of the nonprofit labour force. Salamon and Anheier have calculated that the average proportion of the work force in the third sector is 6,9% in developed countries. If the amount of voluntary work is transformed to full time employment, the share of the third sector employment in Western Europe is 10,3% and in the rest of developed world 9,4%. Thus, nonprofit labour economics is an important part of western societies. However, there are certain concentrations in the NPS work force. Namely, two thirds of all the employment is in three industries: education (30% of the total), health (20%) and social services (18%). This picture changes significantly when voluntary work is added: 55% of voluntary work is done in recreation and social services. This means that in the public sector field the nonprofit employment is 27,4% (with volunteers 40,6%) and in the service field it is 10% (with volunteers 13,9%). Thus, the third sector is, in general, a significant part of the labour economy and in some fields it forms a significant, if not dominant, part of the work force.1

Richard Steinberg has written a comprehensive review on the theories of nonprofit labour economics2. In employment there are two controversial theories. Rent theories argue that NPOs willingly pay higher salaries to employees than FPOs do because tax exemptions give a possibility to do so. The reason behind this theory is the commitment of the employees to the organisation. Namely, in the case of organisation failure these employees would have big difficulties in maintaining their living

1 Salamon & Anheier 1999,5ff. 2 Steinberg 1990. 137 standard because they can not earn so much in FPOs and NPO labour markets are limited.1

The opposing recruitment theories hold that employees in NPOs are willing to work with lower salary than in FPOs because of ideological or religious reasons. It is a question of vocation and not of earning high income. The empirical data give support to both of these theory families, and it is reasonable to conclude that there are differences in different industries. Steinberg argues that the less competitive the sector is, the higher salaries NPOs pay and that the more competitive the sector is, the narrower are the wage differentials.2

As we have seen from the last passage, Steinberg’s frame of NPOs remains in market analogy. What was noted in the theme of the impact of donors pro clients is valid here as well. Large institutional NGOs especially are more dependent on governmental support than market forces. Their staff is in many cases compared to the staff in public administration. Wages are often compared to the salaries of state and IGO officials which in turn depend on various mechanisms that are more or less free from market forces. Steinberg also sees the theme from the American point of view. In Europe the wages are largely negotiated between the labour movements and the industries, not between individuals and a firm. Finally, in the case of INGOs the wage level of the hosting country influences the salaries. For example, Geneva, where many INGOs have their headquarters, is a more expensive town than Brussels, for example.

The crucial question of labour economics in INGOs is one that nether Rifkin nor Steinberg deal with. It is the question of the field workers’ salaries. Salaries are normally bound to either the level of the country where

1 DiMaggio & Anheier 1990,148; Steinberg 1990,160ff. 2 DiMaggio & Anheier 1990,148; Steinberg 1990,160ff. 138 the headquarters are located or to the level of the home country of the employee. If the work is done in a country that has a lower salary level than both these, an INGO has a recruiting dilemma. For example, if an organisation can employ 20 locals in the Third World for the cost of one westerner, the organisation has to calculate if that westerner is really worth those 20 locals. Another question is ethical: how to fit together views of equality and different wage levels in different countries. These two themes are questions that have not found an answer in the economic studies of employment.

4.3.3. Evaluation of the Nonprofit Organisation Behaviour Theories

Behaviour theories of nonprofit organisations do not have a similar ‘nucleus’ as the failure theories form in the role theory research. Both the themes of behaviour theories and the approaches to problems vary a lot.

Theories that deal with organisational efficiency remind that the whole concept of efficiency is unclear. Organisational efficiency depends on several determinants. First, it depends on whose efficiency is concerned. Second, it depends on how the organisation is framed. The basic question in this sense is whether an organisation is a uniform monolith with one voice and goal or a battlefield of various interest groups. The issues on which the theories have agreed is that organisation’s mission limits the possibilities to act and that NPOs generally have quite vague goals.

In the case of INGOs, the previous notion means that a scholar must first look at whether or not the mission of an INGO is clear and accepted. The importance of efficiency for the organisation is that efficiency is one element of its public image or public identity. The reputation of an organisation is one key element in its opportunity structures. Even if donors agree with the mission of an INGO they wait and see that their donations 139 are given to the intended purpose and not, for example, to the organisation or fund-raising costs1.

Employment theories have two opposite research findings of the wage levels in nonprofits: the wages are either higher or lower than in FPs. These opposing views of rent and recruitment theories might be explained with Hansmann’s distinction of donative and commercial NPOs. It might well be that in commercial NPOs the wages are the channel through which the profit is directed to the staff. Opposite to this hypothesis, donative NPOs are basically philanthropic organisations, and accepting a low wage is one form of donating. In that kind of donating an employee gives his time not for free but for a reduced price2.

Moreover, there are probably significant differences between large bureaucratic institutions and small grassroots organisations. The former ones supposedly recruit their work force from the same segments than FPs and thus their salaries should be competitive. The latter ones have quite often staff that have formerly been volunteers in the same organisation and have got a possibility to earn their living from their hobby. Additionally, in a small grassroots organisation it is sometimes easier to reward an employee with something else than with a salary3. Finally, depending on the activities and income sources, some proportions of the salary of an employee might come from an other source than from the

1 From time to time during the past decade it has been discussed in the Finnish press on the vast amounts that are wasted on fund raising costs. Sometimes these costs can be more than half of the total amount of donations. 2 A variant of this kind of donating is that an employee forgets all extra payments that (s)he would get from overtime work. 3 My own experience as a local YMCA secretary included a possibility to buy my food from the wholesaler from where the association got its supplies for its camp centre. This and, for example, the possibility to take my children to the camp centre where I was working, reduced the costs of living for me. The net income after the obligatory expenses was almost the same as while I was working in the parish as a pastor. 140 organisation where the employee works1. However, my thoughts here are based only on my field experience - these kind of themes are a task for further research.

4.4. Discussion on the Economic Theories

In this subchapter I try to give a partial answer to the main research question of part 2: ”How is the third sector constructed into different third sector research traditions?”

In general, the economic theories are based on the legal definition of the US tax code. This often excludes religious, political, mutual benefit and labour organisations as well as small local associations. However, this not a uniform view. Some scholars, like Weisbrod, see the nonprofit sector widely, including these organisation types, too. The overall understanding of the third sector, however, remains to be based on the metaphor of a large philanthropic institution, like a hospital or university. The majority of the research has been done in these industries. In the case of INGOs this means that you have to be careful if the NGO being discussed resembles at all the organisations after which the economic theories have been modelled. Surely, there are large philanthropic INGOs that act like the American NPOs, but the models do not always fit federal type NGOs. However, even in federal INGOs there are often a lot of American staff and the staff members bring their models into these NGOs. Thus, a scholar has to be sensitive in framing the organisation because the framing has impact on other items than efficiency as well.

1 Typical examples are the payments that come from different adult education centres. When it is organising a course with its member association, the education centre is paying all the costs and invoices then ca. 30% from the member association. This means that the salaries of the staff of the member association can not be seen in the accountings of it. 141

On the other hand, economic theories remind of the centrality of an individual actor and give sophisticated models to evaluate the results of individual choices. Economic models also remind that nonprofit organisations are not free from market forces, but they have to compete with FPOs, with state and with each other.

Economic theories are seen in some traditions (e.g. Marxism) as basic theories of society. The theories reviewed here also take the economical sphere as their starting point. They suppose that in the normal model of a good society the market takes care of the needs of the people. All other solutions are some sort of market failures.

However, as we have seen, much of the rationality in the society is something other than getting a lot of money. Thus, economic theories reveal only the economic structures. I cannot agree that all the phenomena in the society can be reduced to economic factors, but they definitely create certain potentials and limitations. If the other potentials are weak, then the economical factors dominate. These themes have been stressed in the resource mobilization approach1 of social movement studies and are called economical opportunity structures. If we see economic role theories from this perspective, they are not answering the question ‘why do nonprofits emerge?’ Instead, as Alberto Melucci has characterised the resource mobilization tradition, economic theories answer the question ‘how do they emerge2?’ These theories explain the potential conditions and mechanisms that enable the emergence of the NPOs. However, potentiality is not a determinant. The ‘why’ question in these theories stands on the assumption that people rationally calculate their choices. If that presupposition is not valid, the ‘why’ question remains open.

1 E.g., McCarthy & Zald 1977. 2 E.g., Melucci 1984,821, 142

In the case of INGOs, economical opportunity structures enable and limit the possibilities of these organisations. Economic studies give light to the questions of monetary interactions. However, the role theories often treat the stakeholders as atomised individuals and not as a group or team. In many cases INGOs are a result of the co-operation of national organisations. This means that choice processes are quite different from the individualistic models of economic theories. Additionally, the basic income of federal type organisations is frequently based on membership fees of national organisations and not on donations (individual or public). Donations, fees and contracts are often the support to special projects which are launched when there are enough resources. Additionally, it is not always clear what is the activity of the INGO and what is the activity of the national organisations. For example, in the YMCA there are numerous bilateral projects that the World Alliance (or Area Alliances) either recognise as their own work or not. Anyway, from the beneficiaries’ point of view, these bilateral projects are international YMCA projects. Thus, there is still a lot to be studied in order to clarify whether the economic behaviour of INGOs is similar to that of NPOs.

Now it is time to give a partial answer to the central question of this study: ”Why are third sector studies important in contemporary society?” Economic studies have made it clear that the third sector is a remarkable economic force in western societies. However, as we have seen, the studies of the third sector have only a 20 year history, and still there is great disagreement over the concepts, nature and dynamics of the sector. Additionally, there are questions of organisational variety in the sector, relationships with the state, and the economic role of INGOs. These questions keep researchers busy before the economic role and behaviour of the third sector organisations is well understood. 143

Today we live in a time when economical factors tend to dominate. Almost everything is seen from the market perspective. This neoliberalistic trend began in Reagan’s time and its main boast is that it beat the Communist system of the Soviet Union. In the current globalisation process the market seems to be the superior power that rules everything. However, not everything can be left to the market for several reasons. First, there are fields that are important to people but which do not create surplus. These are normally services for people who cannot pay for these services by themselves. If some other sector (for example, the state) does not pay the costs, the markets are not interested. Secondly, the mechanisms of markets do not take care of the needs of the infrastructure. I mean that the contemporary markets benefit from the society’s structure and services but are not willing to supply it. The needs of the micro level the market surpass the needs of the macro level. Of course, companies could take care of all of the responsibilities of governments to build and maintain infrastructure of the society. Science fiction literature is full of these kinds of presentations. The problem is that people do not want to live in that kind of a society. We need some kind of public arrangements, and this leads the focus on the question of how a society arranges its public services. These questions are dealt with by political and sociological theories, to which I now turn. 144

5. The Third Sector as Part of the Society

5.1. The Emergence of Sociological Research on Nonprofits

In the 1980s the economic theories were challenged by several sociologists of organisations. Carl Milofsky1, Paul DiMaggio and Walter W. Powell2 started, like economists, to look at NPOs with the metaphor of market instead of the old sociological metaphor of bureaucracy. This emphasised the links between the NPOs and society at a time when the main stream research pointed out the managerialism and effectiveness of NPOs. In organisation studies, in general, there had been a shift from the closed systems rational views to the open systems natural views3. This explains why the sociological studies of NPOs fall mostly in those theory families which emphasise the relationships between organisations and their environment.

In 1976, Yale University’s Institution for Social and Policy Studies started the Program on Non-Profit Organisations4 (PONPO) on an interdisciplinary basis. The project engaged some 150 scholars in Yale and other institutions and produced numerous articles and volumes5.

In the US the studies of the nonprofit sector were stabilised as a new subsector of sociology at the end of

1 Milofsky Carl 1987. 2 DiMaggio & Powell 1983. 3 Aldrich & Marsden 1988,363. 4 See Brewster 1989,v-viii. 5 The editions that have been most cited are the following: The Economics of Nonprofit Institutions edited by Susan Rose-Ackerman (1986), Directory of International Research on Nonprofit Organizations, Foundations, and the Third Sector by Helmut K. Anheier (1986), The non-profit sector: A research handbook (1987) edited by Walter W. Powell and The Nonprofit Sector in International Perspective (1989) edited by Estelle James. Powell’s edition was the first major compendium on non-profit research since the Filer Commission. Anheier’s and James’ works paved the way for international research. 145 the 1980s. It was institutionalised in university based centres, academic departments etc.1 In 1995 Helmut K. Anheier wrote that

The last ten years of nonprofit sector research have not been a decade of basic theoretical innovation; such work was achieved primarily between 1975 and 1985... Rather, two other developments typify the last few years of nonprofit sector research. First, there were refinements and elaborations of the older theories. In addition... recent years have witnessed the accumulation of a significant body of empirical work that either tests theories or provides evidence that key aspects of one theory or another are 2 correct.

Sociological research of the third sector seems to fall into the following categories. First, there are some attempts to create general theories of nonprofits. These attempts try to draw together the economic, historical and social theories of nonprofit organisations3. Second, there are political theorists who tend to see nonprofits mainly from the macro perspective. Third, there is a vast array of literature in the field of sociology of organisations. In this string of sociological studies there are studies on individual organisations, organisation populations and organisation communities. These studies follow mostly three different theory families. The adaptation theories focus on how an individual organisation adapts to the environment. The ecological approach emphasises selection processes among organisations on the macro-level. The (neo)institutional theory stresses the impact of institutional arrangements in society that affect organisational forms and behaviour4. The two latter form the vast majority of the research concerning the nonprofit sector. In addition, there are special themes like unemployment, voluntarism, altruism, and philanthropy which range from the micro- to the macro-level.

1 Katz 1990,V. 2 Anheier 1995,15f. 3 In a way, the field of comparative international studies fall into this category as well, but it has become an independent field of research and thus needs to be evaluated separately. 4 See Carroll 1984; Singh & Lumsden 1990; Aldrich & Marsden 1988 146

5.2. General Theories of the Third Sector

5.2.1. The Sociology of the Nonprofit Sector

General theories of the third sector are mostly from the break of the 1980s and the 1990s. One of the hallmarks is Paul J. DiMaggio and Helmut K. Anheier’s The Sociology of Nonprofit Organizations and Sectors from 19901. In the article, the authors follow the economic theories and formulate two basic questions, on which their paper is also based: ”First, origin: why do nonprofit organizations exist? ...Second, there is the issue of organizational behavior.” These questions DiMaggio and Anheier pose on three levels: ”(a) organisation, (b) industry and (c) nation-state (with the understanding that structural features at any level will influence processes at lower levels).”2

The division into three levels can be seen as a combination of adaptation theories, which focus on the choices of individual organisations, and ecological theory which stresses the population level of analysis.

The role of NPOs is DiMaggio and Anheier’s first topic, and they focus mainly on the industry and state levels leaving the organisational level untouched. They just note that ”one can predict the legal form of most organizations if one knows the industry and nation-state in which they operate3.” On the industry level the authors review Hansmann’s and Weisbrod’s economic theories and note that they ”go far to explain which industries are likely to have NPSs”, but DiMaggio and Anheier are unsatisfied with the capacity of these theories to explain the variety of NPOs ”over time and space.” Thus, DiMaggio and Anheier seek answers from historical studies and note

1 DiMaggio & Anheier 1990. 2 DiMaggio & Anheier 1990,138f. 3 DiMaggio & Anheier 1990,140. 147 that there have been three stages. First,

in the late 1800s, impetus for the formation of NPOs came from emerging upper classes eager to control unruly urban environments and to define social boundaries. The charitable and cultural enterprises of the Gilded Age performed such new public functions as social welfare and aesthetic improvement in ways the market 1 could not support and the polity might not tolerate.

According to DiMaggio and Anheier, the second stage was the professionalisation of the field in the beginning of the twentieth century. DiMaggio and Anheier note that ”in hospitals, universities, and social service agencies, by the 1920s professionals employed by NPOs dominated national discourse2” in the US. The third stage emerged in the 1960s when the state became the major donor of the NPOs ”with the growth of ‘third party government’, that is, state delegation of functions by grant or contract to NPOs3.”

The issues that DiMaggio and Anheier found in historical studies are summed in three aspects of institutional structure: key decisions of the organisational entrepreneurs, public policy and climates of opinion. The arguments DiMaggio and Anheier reviewed were ecological in nature:

[arguments] portray for-profit, nonprofit, and public forms as competing and cooperating within industries, the success of each 4 determined by material and ideological environments.

In the case of the state-level, DiMaggio and Anheier bring forth some aspects that become central themes in international comparative studies. These studies note the difference between concepts, legal tradition, heterogeneity, value rationality, historical traditions, intersectoral relations, and polity structures. The authors especially point out the difference between state-

1 DiMaggio & Anheier 1990,141. 2 DiMaggio & Anheier 1990,142. 3 DiMaggio & Anheier 1990,143. 4 DiMaggio & Anheier 1990,144. 148 oriented Roman law countries, market-oriented Common law countries and Social Democratic countries. Additionally, DiMaggio and Anheier underline the roles of the state and the church in developing the NP form.1

BEHAVIOURAL EFFECTS of the nonprofit form can be seen, according to DiMaggio and Anheier, in all three levels. While the authors did not deal deeply with the role of NPOs on the organisational level, they concentrate on that level in their behaviour analysis. Authors review themes like efficiency, service and client mix, human resources, structure, and strategy; and state that ”the quest for generalizable differences among NPOs, proprietaries, and public agencies is problematic.” First, ”variation within populations defined by legal form may swamp variation between them.” Second, ”lines between public, NP, and FP enterprise are often unclear: indeed ‘publicness’ is better viewed as a continuous variable than as a category.” Third, ”differences in the behavior of NP and other firms in the same industry often flow from industry composition.” In other words, they occupy different niches. Fourth, ”if generic NP/FP differences exist, they may derive from the greater number and abstractness of the former’s goals and their more complex and varied constituencies.”2

On the industry level, DiMaggio and Anheier argue for the similarities of organisations in the same industry. They state that ”form-related differences might emerge more strongly in comparisons among industries with differing compositions in one society, or between the same industries in different places.” Thus, their argument arises much from the theories of isomorphism: organisations in the same industry tend to look alike.3

1 DiMaggio & Anheier 1990,144ff. 2 DiMaggio & Anheier 1990,147-150. 3 DiMaggio & Anheier 1990,150f. 149

On the societal level, DiMaggio and Anheier review several themes. First, the authors describe NPOs as sources of new innovations: ”They enlarge the menu of models among which policy makers may choose when experimenting locally with solutions to social ills.” Second, NPOs reflect elite interests: ”The rich exchange donations for entry into prestigious charitable activities; this entry in turn enhances and legitimates their social status.” Third, interest-mediating organisations have a different function in pluralistic and corporatist systems: ”Whereas in pluralist systems NPOs may enhance diversity, in corporatist systems they may develop ‘welfare cartels’ or ‘supply oligopolies’ of social services.” In both systems the state is able ”to delegate sensitive issues to specialized agencies outside the political center.” Fourth, European scholars have linked NPOs to the crisis of the welfare state: ”Whereas Tocqueville viewed voluntary associations as indicators of the robustness of liberal democracy, such theorists see in their proliferation a sign of legitimation crisis.”1

In their conclusion DiMaggio and Anheier underline three issues:

1. The origin and behavior of NPOs reflect not just incentive structures and utility functions, which economists emphasize, but also institutional structures and state policies. 2. Research on NPOs can profit from an ecological approach, both conceptually (viewing differences among forms as reflecting the division of labor among them) and methodologically. 3. Modern NPSs are constituted as adjuncts to, or in opposition to, states; ”nonprofitness” has little consistent 2 transnational or transhistorical meaning.

Thus, DiMaggio and Anheier see the variety of organisational forms and context when they review previous studies.

1 DiMaggio & Anheier 1990,151ff. 2 DiMaggio & Anheier 1990,153f. 150

5.2.2. The Commons

Roger A. Lohmann has challenged the ‘thirdness’ built in the concepts and theories. His critique arises from the notion that the terms ‘nonprofit’, ‘nongovernmental’, and ‘third’ are negative determinations that doom the sector to be a residual of other sectors in the society. The determinations also articulate the point of view in studies: profit motive, official status or the ways in which an organisation acts (voluntarism).1

The staring point of Lohmann’s theory creation is his notion that until 1992, there had only been different disciplinary approaches but no ”core concepts or theory capable of sustaining a coherent interdisciplinary view of what remains a vast collection of vaguely related topics and issues2.” Thus, Lohmann points to the interdisciplinary nature that states the need for ”a general paradigm or theoretical model to unify and bring some conceptual order to the whole.” This interdisciplinary nature is accompanied with international comparisons. Lohmann notes that typologies like National Taxonomy of Exempt Entities (NTEE) have some validity but, ”typologies alone cannot settle underlying theoretical questions.” Finally, he states that

the problem is not that we lack a paradigm of nonprofit, voluntary, and philanthropic studies. It is that we have too 3 many.

Lohmann sees ”theory as a problem of language4.” Thus,

1 Lohmann 1992a,313. Additional to the article, the author has presented his theory in detail in his book The Commons (Lohmann 1992b). Unfortunately, it is outsold and does not exist in any library in theNordic countries. Thus, this analysis is based on the article. 2 Lohmann 1992a,311. However, Lohmann does not have DiMaggio and Anheier’s work in his bibliography. 3 Lohmann 1992a,311f. 4 Lohmann 1995,26. In the same way Salamon and Anheier see the lack of attention as ”a result of the weakness and limitations of the concepts that are used to define and describe it.” Salamon & Anheier 1992a,125. 151 he seeks to find concepts that are not overloaded with disciplinary connotations. At the same time he tries to find more positive and more value free determination that would arise from the essence of the field, not from being a residual category. Another point that Lohmann makes is that old concepts do not relate theoretically together. He notes that

for interdisciplinary purposes, it seems useful to propose that any meaningful sector of this type must simultaneously be constructed as an economic, social, political, and cultural 1 unit.

COMMONS is Lohmann’s candidate for the term to describe the sector from a positive point of view. The etymological basis is from Aristotle’s koinonia politikhe usually translated as civil society. Lohmann sees that it has five related dimensions: free and uncoerced participation, common purpose, common holdings, participation involving philia (a sense of mutuality) and just social relations.

Collectively, these five dimensions summarize in a single concept (denoted as the commons) what appear to be the central 2 characteristics most frequently attributed to ‘the sector’.

Lohmann argues that with the concept of commons it is possible ”to relocate the vital center as well as the boundaries between the market, the state, and the world of nonprofit, voluntary, and philanthropic concerns.” He also notes that ”the term common is sometimes used in political theory as a synonym for public.” However, Lohmann does not like to link commons to public goods because they are, by definition, universal and indivisible. Instead, he links commons to common goods that are ”desirable or preferred outcomes that are uncoerced, that are associated with shared purposes and pooled resources, and that engender a sense of mutuality (we often say community) and fairness (or justice).” Lohmann reminds of the plurality of the

1 Lohmann 1992a,313-316. 2 Lohmann 1992a,318 (italics in original). 152 goods and notes that many of the common goods involve religious rituals and beliefs: ”the mass is, for its adherents, an indivisible and universal good. Yet, to non- Catholics the mass is not a good.”1

5.2.3. Evaluation of the Third Sector General Theories

THE DEFINITION of the third sector, in DiMaggio and Anheier’s article, follows the American nonprofit tradition2. The authors take as their starting point the IRS categories of 501(c)3 and (c)4 and do not include ”such mutual-benefit associations as labor unions, workers or consumers cooperatives, veterans organizations, or political parties3.” Although the authors say that outside the US they ”vary terminology according to national, legal and political traditions” their definition of the third sector remains in the NPS frame.

Another narrow view is seen when DiMaggio & Anheier deal with the industrial level. They follow the generally accepted doctrine of the role of the urban elite in the 19th century and the NPOs professionalisation in this century. Accordingly, the authors suspect the NPOs made by other status groups than urban elite. The groups of workers and ethnic and religious communities ”are often less stable, less likely to incorporate, and less likely to claim community-wide missions than those created by the wealthy4.” However, the longer historical view does not support this theory unanimously. For example, the Franciscans and the Dominicans are still quite stable organisations. A secular example could be the European Labour Movement which is another non-urban-elite-group that shows no signs of decay. Theoretically, the view of

1 Lohmann 1992a,318ff (italics in original). 2 See chapter 3.3.7. 3 DiMaggio & Anheier 1990,138. 4 DiMaggio & Anheier 1990,141-144. Here one can see similar presuppositions as in the resource mobilization approach which combines the available resources and social movements. McCarthy & Zald 1977,1213. 153

DiMaggio and Anheier is opposed by the church-sect theory which states that sects are often products of lower classes. When the asceticism of sect members creates wealth among adherents, there will be social mobility to the upper classes, and sects will become denominations or churches1. Thus, here we have the classical question: ”which came first: the chicken or the egg?” Were the elite of more recent times already elite when the organisations were founded, or did the founders gain their elite status afterwards?

Lohmann’s thesis shows that he underlines the need for a theory to combine the frames of the NPOs, voluntarism, philanthropy as well as other frames with the third sector master frame2. Thus, he tries to go beyond the nonprofit frame. He proposes a term commons which he draws from Aristotelian koinonia politikhe. However, he does not explain why he cannot adopt the concept of civil society which also derives from the same root. His definition of the sector is close to civil society framing.

The main point in Lohmann’s theory is that he tries to frame the sector from its own premises. In this kind of framing process the most important questions deal with the shared understanding of identity, belief systems and mission. Who are we? Why are we what we are? What is our task? This kind of theory does not reduce the third sector to functionalist determinants but tries to find the raison d’être of the organisations. If the actor is important, as the economic theories claim, then actors motivations should be taken seriously from their own premises. Another related question is that the researchers should not draw boundaries that exclude important interrelated phenomena. In real life the dominant phenomenon is diversity, and ideal types are seldom found. Lohmann’s work is an

1 Niebuhr 1954,19f. 2 Frame analysis has became one of the main theories of the social movement research in recent years. See Snow & al. 1986; Snow and Benford 1992; Benford 1997. 154 important opening in the discussion of the locus of the sector between the market and the state.

THE RESPONSIBILITIES of different sectors in DiMaggio and Anheier’s work are expressed with the question ”why are some organisations nonprofit, and others for-profit, and still others public?1” After reviewing economic theories the authors focus on historical studies and international comparisons. They note that ”pivotal decisions by organizational entrepreneurs are institutionalized in models that raise the cost of new forms while making it inexpensive to adhere to tradition.” Moreover, there are different kinds of legal and ideological environments which determine the role of the NPS. Thus, the division of responsibilities depend on the tradition in each country.

Lohmann has summarised the question of responsibilities of different sectors with the following statement: ”Markets produce private goods, states produce public goods, and commons produce common goods2.” These different goods are ideal types, and a common good can either be a public good or merit good. Anyway, Lohmann makes a distinction between common goods and public goods on one hand, and between common goods and private goods, on the other hand. This enables him to define the core activities in each sector.

THE RANGE of DiMaggio and Anheier’s theory remains in the macro level. In spite of their note of the three levels of research, it seems that DiMaggio and Anheier pass the organisation level. Additionally, another deficiency of their paper is that there are no analyses of the micro level factors of the emergence of nonprofits. DiMaggio and Anheier only refer shortly to some factors mentioned in the literature. As we will see below in

1 DiMaggio & Anheier 1990,139. 2 Lohmann 1992a,320. 155 chapter 6, social psychology shows that there are also determinants other than economic ones in NPOs.

Lohmann’s theory is basically a theory of the philosophical nucleus of the third sector. He places much emphasis on terminological issues and draws conclusions from the frames that these terms represent. In this sense, Lohmann’s theory differs from other third sector theories which try to combine empirical findings. When DiMaggio and Anheier’s work remain in the frame of American nonprofit thinking, Lohmann tries to find a frame that would include different frames developed in different disciplines and countries.

Lohmann focuses mainly on the sector level but his theory can be applied to other levels as well. The five dimensions of koinonia can also be descriptions of the industry, organisation and micro level phenomena. However, it is the task of future research to find out if his theoretical concepts will be supported by empirical studies.

THE METAPHOR of DiMaggio and Anheier’s theory is based on ”hospitals, cultural organizations, traditional charities, foundations, schools, day-care centers and foundations… [and] civic leagues and social welfare organizations1.” Thus, their view of the third sector remains in the framework of the classical philanthropical tradition2. This, as we shall see later, will be the frame of Anheier’s later works as well. Although he extends his scope to international comparisons, his view of the sector is defined by the frame of traditional philanthropy that is transformed to nonprofit enterprise. He neither accepts the other conceptual frames nor develops a combination of different frames as Lohmann aims to do.

1 DiMaggio & Anheier 1990,138. 2 See chapter 3.3.5. 156

The metaphor that lies behind Lohmann’s theory draws from the connotations of the term commons. He mentions the English House of Commons, common law, village commons and ‘common’ behaviour. Thus, it is the life world of non- elite people that Lohmann seems to have in mind. This is backed by the American usage of the concept civil society which Lohmann links to

an almost unimaginable variety of groups and communities devoted to peaceful pursuit of their own ends without external authority, 1 control, or interference.

INGOs, in the light of DiMaggio and Anheier’s general theory, are problematic. The first and foremost problem is that many NGOs are political and/or religious organisations which the authors, however, exclude. The dynamics in NGOs are sometimes closer to social movement organisations than to NPOs. There are surely some features that fit both NGOs and NPOs but there are also differences. The second problem is that the theory has been made into the context of the US type market economy. The context of NGOs is often different. In the case of INGOs, the context is mainly the ‘global village’ which includes all kinds of economic structures. The third problem is related to the previous, namely, the theory does not differentiate membership organisations from service organisations but treat them all alike. However, the function of the membership organisation is often different from service delivering organisations. The membership itself may be the most important aspect in the organisation. Membership organisations are, as Estelle James point out, interest-based communities2. Often the role of federal type INGOs is to serve as a bond between members from different countries. Moreover, it is questionable if the concept of ‘service’ fits into these organisations at all. Finally, although DiMaggio and Anheier note the need of cross-national research, they do

1 Lohmann 1992a,318f. 2 James 1987,406f, 1989a,6; 1989b,292; 1989c,32,35; 1990,23. 157 not focus on the international sector at all. Much of the NPO theory can be used in the EU context because the EU is increasingly becoming a federal body that has power over the member states. However, the theory does not fit as well into the UN context because the UN has no right to interfere with domestic issues.

DiMaggio and Anheier’s work has, however, also elements that are useful in studies of INGOs. First of all, it serves as an introduction to theories of the NPOs. Second, the authors note the importance of the different legislation in various countries and the influence of legal context on organisational frames. In the case of the INGOs, the variety among them is similar to the variation of national level organisations. This variety is partly limited by the UN statutes and the legislation of the host country of the international body. Often this means Swiss law because Geneva is a home town of numerous INGOs. Third, the sociological factors that have been studied in the sociology of organisations, play evidently a significant role in INGOs, too.

Lohmann’s dimensions supposedly fit INGOs quite well. Federal type NGOs especially are characterised by free participation, common purpose, common holdings, a sense of mutuality and a sense of justice in social relations. Additionally, they often have common ideology and common identity.

In general, Lohmann’s work reminds us that the field of third sector studies is international and interdisciplinary. If we are going to take these aspects seriously, we have to question our disciplinary and national definitions. The other point that Lohmann reminds us of is the need for a definition that arises from the essence of the third sector instead regarding it as residual of other sectors. 158

5.3. Political Perspectives on the Third Sector

5.3.1. American Market View on Nonprofits

According to Wolfgang Seibel and Helmut Anheier, the political research of nonprofits has given little attention to individual organisations as service providers. Political research tends to deal with the third sector’s macro-political functions and the mediating role of the NPOs.

The third sector mediates between special and general interests. The central characteristics of mediating organizations is their ability to combine aspects of social and political integration 1 with economic objectives.

THE INSTITUTIONAL CHARACTERS of state organisations and nonprofits is the theme of James Douglas in Powell’s Handbook which is one of the major hallmarks of the nonprofit studies. Douglas starts his introduction to American political theories of nonprofits by noting that before the Reformation the charitable organisations were under the Canonic law. The British Statute of Charitable Uses from 1601 secularised charity and moved it under the state legislation in Britain. This statute has been the basis of charities in English speaking countries. Douglas also reminds that ”history accounts for the fact that charitable nonprofit sector exists independent of the government.”2

As we have seen from the evaluation of the history of education in Europe, all of this is also true in the field of education. The Reformation altered the whole set of church - state relationships in Protestant countries.

The free-rider problem is one of the basic problems in American political theories of nonprofits. The nonprofits have no way to obtain the resources they need for

1 Seibel & Anheier 1990,9f. 2 Douglas 1987,43. 159 delivering public goods. In this case some people may feel tempted to avoid giving their share of the costs while still enjoying the benefits. Public goods are typically political issues and cannot be valued by the markets. In order to avoid the free-rider problem we need the state and its power to tax people.1

Mancur Olson formulated the free-rider problem in 1965 in his book The Logic of Collective Action. He argued that ”the larger the group, the farther it will fall short of providing an optimal amount of collective good2.” Small groups can create the public goods they need because individuals can see that their contribution is crucial. On the other hand, individuals in large groups cannot see their own contribution as making any difference to the whole project. In this case some compulsory or some selective elements are needed.3

Douglas follows Olson’s logic and states interestingly that if the group’s ideas are not widely shared, the group creates a voluntary organisation because it is the only way to push the idea forward. On the other hand, if an idea has wider support, the group will try to influence the government.4 This theory is important because it forms a link between social movements and nonprofit organisations. I come to this a little bit later.

The pluralistic argument for diversity, that Douglas has developed, is an important justification of NPOs. In the NPO literature the coexistence of both NPO services and governmental services is generally seen as a typical element in pluralistic democracy. Robert A. Dahl claims that the NPOs serve as mechanisms by which conflicting values and interests can be accommodated. The competing

1 Douglas 1987,44f. 2 Olson 1994,35. However, Olson did not use the concept free-rider although he described the phenomenon. 3 Olson 1994. 4 Douglas 1987,45. 160 ideologies accept the existence and legitimacy of their rivals and opponents because the acceptance of plurality is also the basis of their own legitimacy. From this basis they protect each other and resist fundamental changes1.

Douglas also deals with the other dimensions of NPO usefulness. He notes that government activities must face many normative constraints that do not limit the activities of NPOs. The government must always think the preferences, justifications, equality, and formal administrative rules of its activities. Wolfgang Seibel states that the nonprofit sector ”provides an institutional arrangement that enables complex societies to cope with social and political problems that cannot be solved2.” In this situation, according to Douglas NPOs are supposed to give an ideal solution for the problems and NPOs are constrained only if the activity is harmful or illegal. Douglas sees that NPOs permit greater diversity than the state can give. He summarises: ”At its best, voluntary action can be based on true charity, ultimately state action has to be based on justice.” He also quotes the Nathan Committee3 which stated: ”Historically, state action is voluntary action crystallized and made universal.”4

Experimentation, which is allied to diversity, is another strength of the nonprofits, according to Douglas. He argues that NPOs serve as some kind of test fields of new ideas and practices. Because of the equal distribution constraint, governments can not usually launch projects that have not been proven to work. This causes, however, no constraint on nonprofits. When a new innovation emerges, it will be tested in voluntary organisations; and if the innovation is useful, it will be diffused to the

1 Douglas 1987,45f. 2 Seibel 1989,188. 3 Report of the Committee on Law and Practice Relating to Charitable Trusts from 1952. 4 Douglas 1987,45ff. 161 public sector1. Douglas states that ”almost without exemption every major social service was originally undertaken by voluntary sector.” The other issue is that the voluntary organisations have a tendency towards professionalisation and conformity.2

Bureaucratisation is, according to Douglas, the third criteria where the state and nonprofits differ. The state has always to behave according to public administrative legislation. This includes the democratic processes, visibility, the people’s right to appeal against the decisions, etc. Although private institutions can be almost as bureaucratic as the state administration, the size of the organisation and constituency is smaller than the state’s. This reduces justifying and other administrative costs. Douglas writes:

The relative freedom of the private voluntary sector from bureaucratic constraints is so well established that governments frequently use the device of subsidizing existing voluntary bodies (or establishing new ones) to carry out functions somewhat protected from the usual requirements of political 3 accountability.

Douglas states that the biggest advances in this practice come from the flexibility of the process. A program can be terminated more easily when it seems to be a failure and the model can be used in situations where the needs of different groups are controversial. On the negative side, Douglas counts the inadequate management,

1 On the diffusion of ideas see, e.g., Eyerman and Jamison 1991,98f. Their thesis is that movement intellectuals who articulate the goals of the social movement, tend to establish themselves in the older intellectual establishments, like universities, media, industry, etc., and they bring their ideas with them. The empirical findings of Eyerman and Jamison rose from the environmental movement. Another example is from the ecumenical context. Ruth Rouse mentions that probably 4/5 of the representatives in the first assembly of the World Council of Churches came from closely related YMCA, YWCA and Student Christian Movement (Rouse 1993,327). Thus, the pioneer work of these NGOs was established in an official inter-church organisation. 2 Douglas 1987,48f. 3 Douglas 1987,50. 162 poor personnel practices, weak budgeting and inadequate record keeping.1

Douglas has divided NPOs into three categories. First, there are those whose original intention is to provide public benefit from private funds. This is the only category that can be seen as charitable. Second, there are mutual benefit organisations which range from elitist groups to trade unions. These concentrate on serving their own membership. Often the nonprofit form is the only possibility because it is cheaper for the user than a for- profit form. Third, there is a phenomenon of a pressure group or political action organisation ”which aims not to provide benefits itself but to persuade government to do so.” This includes the political parties, lobbies, interest groups and the like. Olson has argued that the logic of political nonprofit coalitions lies in the fact that they value the benefits for their own members higher than costs to the society as a whole. On the other hand, Douglas points out that they ”facilitate the non-violent resolution of conflicts within society.”2

Douglas’ idea of three categories is interesting because it tries to explain how social movements and social movement organisations are part of the third sector. This calls for redefining the collective action in this way: When a group has an idea of how some grievance should be corrected, the action depends on how widely the idea is accepted in society. If only a few people have the same opinion, they form a voluntary charitable organisation or a mutual benefit organisation3. On the other hand, if the idea is widely accepted they form a

1 Douglas 1987,50. 2 Douglas 1987,51ff. Charles Handy has a similar classification. He makes a distinction between ‘service delivery’, ‘mutual support’ and ‘campaigning’ organisations. Handy C. 1988,12-18. 3 One interesting study on co-operative arrangements in the production of collective goods is James M. Buchanan’s theory on Clubs. Buchanan 1965. 163 social movement or a pressure group1. The significance of this theory is to link social movements and nonprofits together. In many cases they have overlapping constituencies, mother- or midwife- organisations and they interact in the same industry but are studied separately.

However, the question of ‘widely accepted’ is problematic because it depends on several factors. First, the political culture may either favour or restrict protest activity. If the political system allows wide participation in the political arena, it favours solutions within the political system and reduces the need for social movements. Second, it seems that social mobility depends on the zeitgeist. There are certain times when people are ready to campaign for some purpose. Karl-Werner Brand and Sidney Tarrow have argued that social movements emerge normally in cycles2, and meanwhile grievances are supposedly solved by nonprofit activity. Third, social movements also need resources and the lack of these resources downplays the emergence of mobility3. Related to this is the role of the elite. Often the elite want to restrict rebellious activity. In those cases leading groups in the society are willing to solve a grievance with moderate means, like philanthropical actions or political reforms. As we saw in the historical part in chapter two, third sector organisations have sometimes been accused of being conservative, bourgeois and an ”armed daughter of the church.” Finally, social movements also create both their political organisations and their NPOs. In Finland, the Labour Movement created its own temperance organisations, sports associations, co- operatives, mutual insurance companies, etc. The question is much more complicated than Douglas proposes. However, his model still has validity as one possibility to

1 On pressure groups as nonprofit organisations see Jenkins 1987. 2 Brand 1990; Tarrow 1997. 3 Mayer N. Zald has defended this thesis by pointing out that the nuclear accident in Chernobyl generated more social movement mobilization in Stockholm than in Kiev or Warsaw. Zald 1991,350. 164 classify the actors in the third sector.

Douglas’ division into three is also only an ideal type of categorisation. In real life, organisations or movements create sub-organisations in order to adapt to their political and legal environment. For example, in Finland there are both common legislation for public good organisations and special legislation for youth-, cultural-, sports-, social service- and other organisations. The former determines, among other things, the taxation and the latter the state agency that distributes the subsidies. This means that multi-purpose movements tend to create different organisations to guarantee all possible subsidies. It has been a public secret that the membership of the teetotalism- and youth associations of political parties is on a large scale only ‘paper membership’ and their staff is part of the party staff. It is one way to circumvent the restriction that municipalities are not allowed to substitute political parties.

PREMISES OF THE STATE POLICY is John G. Simon’s theme in the anthology of Anheier and Seibel. That anthology was based on the international third sector conference in Bad Honnef in 1987. That conference is a hallmark in nonprofit studies. In that book Simon notes that ”when the modern welfare state considers legal policies affecting the nonprofit sector” there are three overarching questions. The first question is ”what roles are appropriate for the nonprofit sector to perform?” Simon approaches the issue from the efficiency perspective, in which he includes both economical efficiency and ”effective ways of achieving various social purposes” (for example equality and fairness). Actually, he does not answer the question but points to the important issues. He mentions two reasons of why NPOs are sometimes a cheaper way of organising services than other forms of organisations. First, NPOs have the ability ”to enforce internal cross-subsidization 165 for one class of users at the expense of another class of users.” Second, NPOs can avoid ”bureaucratic constraint that attaches to much governmental activity.” Another theme is that NPOs do not treat all the people equally but target services to special groups. The third theme also deals with equity. Simon points to the question of decision making in these organisations: ”Who governs?”1

The second political question that Simon mentions is ”what methods should the state use to encourage the nonprofit sector to perform such roles?” Here, again, Simon does not give results but points to the problematic issues. He focuses on subsidies made by tax legislation and discusses the specialities of the US tax system. However, his final point is interesting. He asks whether tax deductions for charities are subsidies at all or do they only reflect the way that the taxable income and property are defined? Thus, the point in the latter case is that ”certain kinds of revenue or certain kinds of property were never meant to be part of the tax base.”2

Simon’s third question is related to the boundaries of different sectors: ”What regulatory controls should be placed on nonprofit sector relations with the governmental and business sectors and with charitable donors?” Here Simon uses the expression ”border patrol” to describe the tendency ”to restrain charitable organizations from wandering outside of their own territory.” The 1980s governmental policy in the US led NPOs to enter into the business sector. This caused, in turn, charges of ”unfair competition” because for-profit firms do not have similar benefits to nonprofits. However, Simon leaves the question open. On the government border there is the prohibition of political activities (both lobbying and electoral campaigns). The reason is similar to that in the ”business border”: nonprofits enjoy privileges that others do not

1 Simon 1990,31-34. 2 Simon 1990,31,34-37. 166 have. Simon concludes this border patrol by a remark that

the unfairness argument is based on the notion that the tax system is ‘subsiding’ one party to a commercial or political contest. If it is plausible to say that no subsidy is involved, for reasons mentioned earlier, then this aspect of ‘unfairness’ 1 recedes.

Finally, Simon deals with the relations with donors. He notes the so called cy pres rule which states that if the donation (especially legacy) has been given for a certain limited purpose, it should be used ”as close as possible2” for the original purpose. The other problematic question is the limitation of fund-raising costs. The problem is if the ”excessive” use of the donations for fund-raising violates the wishes of donors. Here, again, Simon leaves the questions open.3

Simon’s article is mainly an introduction to the legal problems that the government faces when it has to deal with the third sector. It does not give answers but leaves this task for future studies. However, his three main questions are valid in all levels of third sector activity: local, national, and international.

When Simon deals with the government’s preferences concerning the third sector, Diana Leat, in the same book, focuses on other relations of NPOs, too. She states that ”accountability becomes an issue when power and resources are delegated.” Her basic argument is that the staff of an NPO is accountable to several - sometimes conflicting - groups. There are the board, sub-boards, members, clients, donors, society, authorities, ideologies, etc. She states that ”priorities in accountability are likely to depend upon the significance of the sanctions... which different groups are able to impose” and ”the capacity... to ‘make accountability meaningful..., the ability of any group to

1 Simon 1990,31,37-40. 2 Cy pres comme possible (si près in modern French). 3 Simon 1990,31,40ff. 167 ask the right questions.” If the inspectors do not understand the issue, accountability is only a gesture. Leat also notes that the organisation may be accountable in different directions for different issues.1

The accountability question is significant because it brings so many determinants into the behaviour of NPOs that these determinants make all nonprofits like snowflakes - all are unique. Each organisation has its own history in a special historical, cultural and geographical context with a different mixture of members. Each resource, constraint, incentive and choice has its implications and is stored into the cultural memory and practice of the organisation. The classifications that have been made are - at the best - ideal types and broad simplifications.

5.3.2. European Struggle with the Welfare State

European political theories have tended to concentrate on the social rights of the citizens. From that perspective it is not surprising that the majority of the studies have been made in the context of social politics.

ADMINISTRATION OF THE PUBLIC SERVICES is a problem that Christopher Hood and Gunnar Folke Schuppert deal with in their article in Salamon and Seibel’s anthology. First they note that the so called national style approach cannot explain the similarities in European countries. Instead they propose the administrative dilemmas approach combined with the transaction cost approach and subsidiarity principle. In the first the underlying thesis is that

whatever principle institutional designers first use as a basis for creating organization, they will later design arrangements departing from that principle to take advantage of the opposite,

1 Leat 1990. 168

1 contradictory principle.

In the case of third sector - state relationships, it means that there is a continuous swing between these possibilities or as the authors put it: ”a fluctuating or cyclical pattern in the distribution of administrative tasks among types of organizations.” However, Hood and Schuppert note that this approach does not explain the continuing increase of using some organisational form in the cases when that form is out of official favour.2

Hood and Schuppert continue with ”a marriage of the ‘transactions analysis’ approach in contemporary institutional economics with the ‘subsidiarity principle’ in public service provision.” They note ”that there are very often ‘service imperatives’ associated with particular tasks which lead to common organizational goals.” The existence of these service imperatives explain, according to Hood and Schuppert, why there are similar solutions in different countries.3

Hood and Schuppert seek these organisational service imperatives from ”transactional approach to institutional analysis, which tries to identify the costs associated with exchange relationships in different decision situations.” As a starting point they take Richard Rose’s definition of public service tasks. ”Defining public service are… those which are part of the definition of government - that is foreign affairs, arms, justice, revenue, and police.”. Resource mobilization functions refer to those parts of the society that create wealth and infrastructure. Traditionally these have not been tasks of the state, ”but over the past century, governments everywhere have chosen increasingly to engage in this kind of provision.” Social public services ”are those aimed at

1 Hood & Schuppert 1990,98. 2 Hood & Schuppert 1990,98. 3 Hood & Schuppert 1990,99. 169 the advancement of citizens’ welfare.”1

Hood and Schuppert use Rose’s trichotomy with the subsidiarity principle or, more largely, with the preference for ‘minimum public power’. They argue that ”such a preference would lead to a search for alternatives to classic public bureaucracy wherever feasible.” Their second thesis is that when the bureau chiefs in central administration derive little benefits from a large organisation ”they will aim to ‘shape’ their bureaus in ways that that may make those bureaus smaller.” Thus, the general trend in Western European states is, according to Hood and Schuppert, the minimum use of public power.2

The minimum use of public power combined with Rose’s trichotomy have different kinds of results. First, ”for ‘defining’ public services, problems of institutional failure, without the exercise of general-purpose public power, tend to be serious” because most of these kinds of services are public goods. In order to avoid free-riders, the taxation is the only firm basis. Additionally, states can use public power, for example, in emergencies. Second, ”many ‘resource mobilization’ services involve some - but not ALL - of the features of public goods.” These need some degree of public power ”to break the power of holdouts and free riders.” Finally, ”when it comes to ‘social’ function, …the services involved typically do not have ANY of the features of public goods.” Hood and Schuppert argue that ”in this group, therefore, enterprises constituted as private or independent entities are likely to be able to provide services without institutional failure.”3

The theory of Hood and Schuppert sees the third sector as an alternative possibility to the state bureaucracy.

1 Hood & Schuppert 1990,99f. 2 Hood & Schuppert 1990,101f. 3 Hood & Schuppert 1990,102ff. 170

However, the point of view is completely from the official administration which makes all the decisions of responsibilities and roles. Hood and Schuppert’s theory is basically a theory of how the state frames the role of third sector organisations and it attempts to explain the European situation. However, the theory has some serious deficiencies. First, it ignores the individual activity that lies behind many organisations. Major charitable organisations in Europe were not founded by the decision of a government but by individual actors. Second, it does not explain the situation in the Nordic countries from the 1960s to the end of the 1980s. In those countries the subsidiarity principle was almost an unknown concept in that time. Governments in these countries did not aim to any ‘minimum public power’ but, on the contrary, to the expansion of state responsibilities. Third, the theory does not see the impact of the diffusion of the megatrends nor political frontiers. The existence of ‘service imperatives’ is one explanation for similar solutions in different countries. However, there is also another possibility. It could be argued that tested solutions were copied from country to country if the political atmosphere allowed it. Additionally, the state administration is not a closed system. Instead, the same political campaigns that exist in the whole society, exist in the administration as well. Fourth, although the authors mention that the root of subsidiarity is in the Catholic Church, they do not see the Caesar - Pope dichotomy that has constituted the Continental political life. Moreover, when some third sector organisations have taken care of the services for centuries, how could their role be determined by some new-born states? Finally, although Hood and Schuppert mentioned the subsidiarity principle, there is nothing about the role of the family in their theory.

On the other hand, the theory of Hood and Schuppert has its merits as well. It offers a glimpse of the dynamics of state administration and explains how the 171 third sector is seen from that perspective. The attitudes of politicians and state officials are factors in the environment of third sector organisations. Although these attitudes are not determinants, they form an important part of the political opportunity structures1 which enable or limit the strategies of organisations.

WELFARE MIX or welfare pluralism has been one of the main questions in European political studies. European studies have, according to Aila-Leena Matthies, concentrated more on the interaction and mix of the sectors than on the distinctions between the sectors. The other difference has been the focus on small alternative and informal networks.2

The origins of welfare pluralism was in the British Wolfenden Committee that in 1978 theorised the role of voluntary organisations in the context of a welfare state3. The idea was to form

a ‘preference-guided society’ where government, in the interests of equity and social justice, would retain a major responsibility for financing welfare but the voluntary sector would take over 4 much of the delivery.

Marilyn Taylor notes, in her article in Anheier and Seibel’s anthology, that the idea of welfare pluralism was meant to include political pluralism as well. This means that ”voluntary organisations are viewed not only for delivering services but also for giving different interests a voice in the political process5.” This means that in that time there was a tendency towards a Scandinavian type civil society where the people’s organisations have status in public decision making.

1 On the concept of political opportunity structures, see Tilly 1978; Gamson 1975; McAdam 1982. 2 Matthies 1994,12ff. 3 Wolfenden Committee 1978 according to Taylor 1992,149. 4 Taylor 1992,149. 5 Taylor 1992,149. 172

However, according to Taylor, in Britain during the Thatcher era the focus shifted to market analogy where the emphasis was on purchase-of-service contract. This meant, first, that the voluntary organisations’ function as a voice of interests diminished. Second, there was a shift in Britain towards large corporate giants instead of small neighbourhood organisations. And, third, this changed the mission of the voluntary organisations because they ”may seek to follow the money into the new areas, with the result that existing work is squeezed out.”1

Aila-Leena Matthies’ report from 1994 is one view on the German research. Arguing that ”I do not believe that I have ignored any relevant research” she evaluates four studies from the beginning of the 1990s that were new, empirical, different and central2. In analysing studies she develops a synthesis of German third sector studies.3

In Germany the concept of welfare mix was associated with the concepts of intermediary organisations and civil society which were introduced in part I. According to Matthies, this has several implications on research. First, the American distinction between nonprofit and for-profit has little relevance in Germany. Second, German social sciences, in general, do not aim towards macro level systematisations and categorisations but try to understand and interpret the content of the phenomena, not the organisation of them. Third, the third sector and intermediate level research are inbuilt in almost all German social science research as Matthies writes

It is typical to German social sciences… that the organisations

1 Taylor 1992,155-161. 2 These studies were: Offe Claus & Heinze Rolf G. 1990: Organisierte Eingenarbeit, which deals with the new co-operations; Evers Adalbet, Ostner Ilona & Wiesenthal Helmut 1989: Arbeit und Engagement im intermediären Bereich, which evaluates the intermediary level’s social policy and labor policy dimensions; Effinger Herbert 1990: Individualisierung und neue Formen der Kooperation, which concentrates on the alternative ways of life; and Jacob Gisela 1993: Zwischen Dienst und Selbstbezug, which studies voluntary work. 3 Matthies 1994,25. (my translation). 173

and functions of civil society penetrate as self evident themes almost all social science discussions, although with various 1 concepts.

In the end of the 1980s, the third sector themes in Germany have arisen from the crisis of the welfare state. According to Matthies, the new phenomenon in the 1980s was that the intermediary level was seen and studied as an entity. It was seen as a way to accustom to the vast social changes in the society. The main theme has been ”how the welfare state adapts itself to the conditions of its environment.” Matthies notes that the

intermediary level is not seen only as a view of social policy decisions but as an approach that links the social policy discussion into the larger society and culture. Individual small 2 projects are pioneers of adaptation to large transitions.

Thus, the European research has been centred around the themes of the welfare state. What Taylor notes about the attitude of the voluntary organisations, can also be seen in the case of research: scholars ”consider the individual not only as a consumer but as a citizen3.” Thus, the problematics that were introduced in part I on the concepts of civil society, social movements, social economy and intermediary organisations are the theme of European political studies of the third sector. In Europe, choices between sectors have not been primarily market choices but rather they have been political.

5.3.3. Evaluation of the Third Sector Political Theories

DEFINITIONS of the third sector differ from each other on opposite sides of the Atlantic. American political theories depart from the economic understanding of the nonprofit sector. Although they widen the concept to include political activity, the main focus is on the production and delivering public goods. Basically these theories do not fundamentally differ from American

1 Matthies 1994,14,18,20f. (my translation). 2 Matthies 1994,26,30 (my translation). 3 Taylor 1992,162. 174 economic theories and they remain in the nonprofit frame.

In Europe, the situation is different because the state and churches play a bigger role than in the US, and the market is not as dominant as on the other side of the Atlantic. European political theories see the third sector, on one hand, as a partner of the state. On the other hand, the long tradition history of churches, charitable organisations and social movements emphasise their role in the civil society (understood in the classical meaning). Third sector is a traditional part of citizenry and it has institutionalised forms that cannot be seen as failures of other sectors.

THE RESPONSIBILITIES of different sectors across the Atlantic do not differ much in spite of the different understanding of the third sector. On both continents the third sector has been framed as some kind of assistant of the state in those affairs that have a connection to economic activities and welfare. The main themes in the US remain in explanations as to why the third sector exists: they are not so bureaucratic as the state; they are sources of innovations because they are not limited to the equal distribution of public goods, etc. In Europe, the focus has been more on the industry than on the sector. As Matthies has noted, in Europe ”there is no general theory, authority or hallmarks; no integrating discussion; instead the common feature of the research has especially been the mutual incoherence, particularity and practicality1.”

THE RANGE OF THE THEORIES remains mainly in the macro perspective. American political theories could be described as some kind of national economy approaches. In Europe, on the other hand, third sector theories are imbedded in other political and sociological theories and are mainly theories of citizenship and the welfare state.

1 Matthies 1994,21 (my translation). 175

THE METAPHORS behind the American and the European approach are also quite similar. In Europe the metaphor of political studies seems to be the civil society in its classical meaning. In America, the metaphor is of active citizens arranging their life. These arrangements include both intermediary organisations and the state. Actually, there is no great difference between the state and the third sector: both are parts of the public sphere1.

INGOS are explained only partly with these theories. The distinction between social movements and nonprofits is not always valid in the case of INGOs because they are often both. Moreover, an organisation can behave differently in its various stages and a movement can have several organisations to meet the needs of its target groups. The Labour movement is a typical example of how a movement can have several organisations for different tasks. The themes of debureaucratisation and innovation are not valid in all cases. There are NGOs that are extremely bureaucratic and have lost all innovative features which have existed in them. On the other hand, we can find an innovative spirit in the public sector as well.

It seems that the German view of the third sector as an elementary part of the whole society could be fruitful. INGOs are organisations that aim to create the global village - a kind of world wide civil society. In general, it seems that this ‘village’ is still for a great deal a terra incognito and needs to be mapped out before there could be any political theories of INGOs2. The main

1 This perspective is supported by Herbert Thomsen’s(1990) notion that 90% of the income of German third sector organisations receive their income from the state or insurance companies and that the staff of these organisations is more controlled and regulated than the staff in the official sector or market sector. Matthies 1994,39. 2 Political studies of INGOs have been mainly done in social movement studies. However, as I have already noted, they form a separate literature in a sense that there are not much quotations from social movement literature to third sector literature and vice versa. Social movement literature is so large that there is no space to enter them 176 blurred areas are in the differences in contexts of where various INGOs work. At the local and national level the impact of the organisational environment has been studied in the sociology of organisations.

5.4. Sociology of Organisations and the Third Sector

Matthies noted that in the German social research the themes of civil society are dealt with in almost all social science literature. When we look at the sociology of organisations we can see that it contains many of those themes familiar to the third sector literature. Although organisation scholars do not always speak of nonprofit organisations or the third sector, the field is embedded in their theories1. Much of the sociological research of nonprofit organisations has been done in a context that is only loosely connected to the third sector. Thus, it is possible to include them into the third sector literature.

First, the research objects of organisation studies are often from the third sector. This means that, although they are formally not third sector theories, they deal with the third sector organisations. Second, nonprofit organisations face similar organisational forces to those of other organisations. For this reason, the field cannot skip the major organisational theories. Third, the line between organisational forms is vague as can be seen from the discussion in part one. Moreover, as it was argued in the previous chapter, there are shifts from one sector form to other forms. Throughout this study I have had an inclusive view of the third sector. In this chapter I am close to the vague boarders of the discipline but still

here. On these studies see, for example, Muukkonen 1999a,c. 1 In the course of Methodological Approaches to the Environment - Society Interface, Turku, Finland, 2-4, September 1999 Mayer N. Zald mentioned that ”I don’t see them [organisation studies, social movement studies and nonprofit studies] as separate literature.” Muukkonen 1999b,76. 177 inside them.

Although Max Weber and Roberto Michels1 had developed their classical theories on bureaucracy and the ”iron law of oligarchy”, they did not have much impact on American research of organisations until shortly after World War II2. The revival of organisation studies started in the 1950s with two different branches. Robert K. Merton3 and others at Columbia University followed the German path and emphasised the impact of bureaucracy on organisational forms and behaviour4. Herbert A. Simon, James G. March5 and others at the Carnegie Institute developed general theories of organisational decision-making. In the 1960s, the theories expanded but also became isolated from general sociology. These theories mainly focus on how organisations modify their structures. The underlying thinking in these theories is the rational choice approach: organisations are seen as self supporting entities that can be manipulated by managerial decisions. The extreme of this approach is expressed in the theories of Frederick W. Taylor, in which organisations are seen with the model of a machine. More organic models have emphasised the informal structures inside organisations. Additionally, some theories have seen as a natural process that an organisation replaces its ends by its means6.

After the 1960s there was a shift from this closed- system structuralism7, on one hand, to theories of contingency8, resource dependency1, natural systems2, and,

1 Michels 1966(1911) 2 Burrell 1997,642f; Tolbert and Zucker 1997,176f. 3 Merton 1952. 4 It is good to remember that Merton was a pupil of Talcott Parsons and had adopted his AGIL-system also in organisation theory. 5 March & Simon 1958. 6 Simon 1957. 7 Closed-system structuralism tried to find the general laws of organisations from the relationship between size and structural differentiation. Hannan & Freeman 1989,33; Aldrich & Marsden 1988,363 8 Contingency theory holds that different parts of the organisation take different lead when they try to adapt to their sub-environments. Hannan & Freeman 1989,29f. 178 on the other hand, to Marxist theories3. All these theories saw organisational environment or an organisation’s context as a remarkable determinant of organisational behaviour.

One dominant theme in organisation studies has been the question of organisational change. In nonprofit studies there have been three major organisational theories that see this question in a different way. Adaptation theories and institutional theory emphasise organisational change as means of coping with the environment. Ecological theory, on the contrary, claims that selection, not change, is the major force in organisational environment.

In the next section I evaluate these three theories and link them to third sector studies. I do not go through all of the hallmark studies4 of the sociology of organisations but instead I focus on those studies that have been used in nonprofit studies. After these organisational change theories, I focus on special themes like voluntarism and altruism.

5.4.1. Adaptation of the Organisation

THE POLITICAL ECONOMY APPROACH is one string of the adaptation theories. I introduce this theory with the help of two studies. The first is a case study of organisational change and the second is a synthesis of several studies that focus on the organisational transformation. The idea is, as Mayer N. Zald put it:

1 Resource dependency theory explains organisation form as a result of the managerial decisions which try to reduce dependence on other organisations that produce key resources. Hannan & Freeman 1989,30f. 2 Natural systems theorists treated organisations as social communities and emphasised informal structures and motivations. Aldrich & Marsden 1988,363. 3 Marxist theories hold that capitalists try to minimise the dependency on labour and, in general, control the whole process. Hannan & Freeman 1989,34. 4 On these, see, for example Powell & Friedkin 1987. 179

case studies are appropriate vehicles for the elaboration and 1 development of concepts and conceptual frameworks.

A classical work in the adaptation approach is from Mayer N. Zald. In 1970 he published a study on the transformation and professionalisation of the US YMCA2. His work belongs to the natural system approach, which traces via Philip Selznick3 and Robert Merton4 to Talcott Parsons5.

In the preface of his book Zald defines the tasks of his study:

One challenge of this study is to show the deep intrinsic interest and complexity of the YMCA… its study appeals also partly by the knowledge it contributes to our understanding of agency adaptation to pressing social problems.

A second challenge is to show the continuing value of case studies at a time when many scholars have argued for a turn to comparative analysis… While they rarely ”test” theory, they are 6 invaluable in their development.

In part I of his book Zald introduces his theoretical basis and the US YMCA. In general,

the niche occupied by most YMCAs in the organizational life of their communities can be characterized as that of a general service organization designed to facilitate the social, physical, and not-too-intellectual interests of community members… YMCA's major services are activity- rather than product-oriented and are designed for the relatively well-adjusted rather than the 7 maladjusted or deviant member of society.

Thus, the YMCA forms quite a different case than the main line of American third sector studies which have concentrated on large institutions like hospitals, schools

1 Zald 1970,xiv. 2 Zald published an early version of chapters 2 and 3 of his book with Patricia Denton in 1963. Zald & Denton 1963. 3 Selznick 1957. 4 Merton 1952. 5 Parsons 1951. 6 Zald 1970,xii-xiv. 7 Zald 1970,3. Something about the role of the YMCA in the US is seen in the data that Zald gives: in 1954 one quarter of American males over 21 had been YMCA members and 96% had chartered YMCA in towns with more than 50,000 inhabitants in 1959. Idem,5. 180 and the like. The speciality of the YMCA is in its federal structure and stress on local leadership and autonomy. Zald criticises decision theories that they miss the structural variation of organisations:

large organizations range from almost anarchical religious orders to hierarchic extensions of one-man rule, from democratic voluntary associations to loose confederations of giant bureaucracies

Zald’s theoretical framework is what he calls the political economy1 of organisations and he claims that it ”can be used in studying any large-scale organization but it is especially useful in studying the YMCA.” Zald notes that ”the political-economy approach is a middle-range conceptual scheme designed for use both in comparative studies and in analysis of organizational change.” He also defines that ”political economy studies the interplay of power (oriented toward goals) and productive exchange systems.” Further, following Tom Burns2, Zald continues:

the political-economy approach requires an analysis that focuses on the interaction of values and goals of power and control groups with (1) the external supply of money and other incentives and the demand for services of clients and funders and (2) the internal allocation of men, money, and facilities to accomplish 3 tasks.

THE ORGANISATION’S ECONOMY has, according to Zald, two sides. The first side is its relations with the economic environment. In the YMCA case this includes its services and its labour craft. The organisation offers services, runs some programs with an absorption principle and subsidies some other programs. Thus, the YMCA has to be able to both sell services and ”to convince contributors that its services are worthwhile.” In the labour market the organisation has to compete for professionals and

1 Zald notes that ”the term economy shou1d not be conceived narrowly as limited to the exchange of money for goods and services. Rather what is exchanged is a number of goods, or incentives, that bind men to each other.” Zald 1970,19 (italics in original). 2 Burns 1961. 3 Zald 1970,9,17f (italics in original). 181 volunteers. Second, in the YMCA there are both internal economy and labour market. It ”is concerned with accounting for and allocating funds, personnel, and facilities within the organization.” On the basis of all of this Zald argues:

Sources of income and personnel, and their distribution, represent some of the organization's historic commitments to specific types of programs and groups. To understand the directions of change is to understand these commitments and how 1 they are changing.

However, organisations are not only clay that the surrounding social and economical forces mould, but they actively influence to their existence. One significant point in Zald’s theory is the idea of an organisation’s constitutional norms as filters that ”limit and direct the uses of influence and power2.” This does not mean that all of the actions and decisions are made according to these norms - some actions can even be unconstitutional. Here Zald introduces the other side of the concept political economy, namely, what he calls polity. It is

the total system of an organization’s influence or power; it includes both the institutionalized and authoritative patterns of decision control as well as the less regular (and even 3 ‘illegitimate’) but systematic, influence processes.

POLITY is a term that Zald uses to refer to the whole web of groups and individuals that possess resources to sanction decisions. Thus, it includes a wider group than those that make formal decisions but exclude those who do not have influence on the process of decision making.4

In his analysis Zald elaborates a general proposition that

1 Zald 1970,20. 2 Zald 1970,81. 3 Zald 1970,21. Zald understands the constitution broadly as ”a set of agreements and understandings which define the limits and goals of the collectivity as well as the responsibilities and rights of the participants.” The power system is ”the actual means by which decisions are influenced.” Idem 21f. 4 Zald 1970,21f. 182

the YMCA attachment to revivalistic and other direct religious programs proved to be an unstable source of membership and financial support. Only as it provided a variety of general service activities… was an adequate economic support base established. At the same time, a shift away from direct religious program was occurring in response to increasingly secularized 1 society.

Factors that, according to Zald, enabled this transformation from evangelisation to general service, are all concerns of an organisation’s niche: its target group, its goals and its methods.

THE UNSTABLE FINANCIAL BASIS was the first impulse affecting the transformation. Zald notes that the old way that was based on membership fees, collections and fund- raising campaigns ”did not provide much financial stability.” This led the organisation to different business activities already in the turn of the 19th and 20th centuries. Especially in bigger cities, the fees from the activities formed the majority of the income. However, in smaller towns the contributions were still in the 1950s the biggest source of income. Among these sources the Community Chest has been one of the most important.2

Additionally, there was a ‘push’ from the Churches who developed their own ecumenical bodies and organisations. That meant a decrease in the usefulness of the YMCA (as a religious organisation) for them. In a way the YMCA became a competitor when both churches and YMCAs tried to compete for members and contributions in the same niche. At the same time there was a ‘pull’ from the society for all non- profit organisations after the war in the US to increase

1 Zald 1970,25. 2 Zald 1970,32f,36,43-47. First forms of business were profit-making lecture series and vocational courses but ”over the long run, a more important factor… was the development of the gymnasium.” After the Civil War the US YMCA developed a model of work where the YMCA building was central. In these buildings there were two important facilities and program commitments that defined ”the niche that the YMCA came to hold,” namely sports facilities and dormitories. They stabilised the finances and became an excellent means of recruiting members. Idem. 183 their social activities.1

Thus, Zald’s study both backs and challenges the marketisation theses which hold that the Reagan administration’s cuts in public subsidies forced NPOs to be more aggressive in the market. Zald’s study is in line with the phenomenon of marketisation, but it reminds us that the phenomenon is older than just twenty years. Additionally, his study reminds that churches have a role in this trend as well.

THE MEMBERSHIP BASE is the second factor of the transformation. After the period of evangelical expansion2 of the 19th century there was a shift in the US YMCA membership base from the 1920s to the 1940s. The alteration did not happen so much in the socioeconomic composition of members but in the inclusion of new groups within the middle-class. The expansion of dormitories and gymnasiums lead to the expansion of members who were mostly interested of these services and not of general participation in the YMCA. YMCA membership expanded to youth, female, non-evangelical (= Catholics) and non- Christian (= Jews) membership and their involvement to different activities3. In the beginning the London YMCA was a club of young male merchants and the link between the members and the commercial world has remained. However, Zald argues that within the middle class ”these changes in membership composition represent shifts in the

1 Zald & Denton 1963,218f, note 10. 2 Zald draws the historical material of this period from the works of C. Howard Hopkins (1951), Owen E. Pence (1939) and Luther L. Doggett (1896). Zald 1970,25-48. 3 The inclusion of non-Christian members was due to YMCA principle that was later defined as ‘Christian leadership and open membership’. This principle that existed from the very beginning of the movement legitimised the inclusion of other than converted members because, as it was said in the Centennial Declaration, ”the YMCA should witness for Christ on and across those frontiers which separate Christian and non-Christian Faiths.” (And Now - Tomorrow 1957, 9. On the theme, see Enlisted in Reconciliation 1977,29-34.) However, Zald does not discuss about the international influence on understanding the membership. 184 demand functions of different segments of the population for YMCA programs.”1

LAY LEADERSHIP is the third determinant in the transformation of an organisation. The decision making in the YMCA has been in the hands of the local laity. This ”democratic congregationalism emphasises control of local associations by the voting membership and their representatives; under this concept, goal setting and policy formation are dominated by a ‘council of elders’ rather than by professional staff2.” This meant that ”considerations of church policy and theology were less important than if the organization had been controlled by the clergymen3.” The broad definition of its goal to serve the whole man

permitted different staff members and laymen to interpret its mission variously. Consequently, it could leap into new endeavors 4 consonant with those goals .

The lay leadership was linked to the attitudes of the secretariat as an element that facilitated the transformation. Zald found that there were four aspects that emphasised lay leadership over the professional management:

(1) The secretary did not command a skill or knowledge base that established his greater wisdom in organizational affairs. (2) The secretary had no allegiance to, or identification with, professional groups outside his own organization. (3) The YMCA's historical development as a layman's association issued in organizational structures and ideologies asserting the board's rights as predominant. (4) The secretary's personal disposition typically led him to have acquiescent relations with authority 5 figures.

1 Zald & Denton 1963,219f. Zald 1970,32f,36,40-43,55f. 2 Zald 1970,64. This decision was made early after the formation of the London YMCA in 1844: ”Williams, believing that the clergymen had little influence on the young men, turned to indigenous lay leadership: the YMCA was to depend on young men to save and lead other young men into the paths of righteousness.” Idem 26. 3 Zald & Denton 1963,220; Zald 1970,26. 4 Zald 1970,48. 5 Zald 1970,65. 185

This meant that ”the secretary’s job is not to define goals, but rather to help others to implement theirs1.” Thus, according to Zald’s study, YMCA secretaries were not a similar transformative power to what Hall, DiMaggio and Anheier argued in their work2. The push for change came mainly from the society which was represented in the YMCA by the trustees.

However, at this point Zald’s thesis could be questioned. His statement that YMCA secretaries lacked professional identity concerns a similar professional identity as, for example, lawyers and doctors have. Secretaries had, indeed, a professional identity but it was different from secular professional identities. As Zald mentions, the model for YMCA organisation came from Protestant churches and especially from those who emphasised a congregationalist structure3. Another factor might be that the model for the role of YMCA secretaries came from deacons and cantors that have always been under their superiors’ leadership. In churches there are several professions that have a strong professional identity but do not have power to decide the goals of churches. Thus, it is not necessarily the lack of professional identity but the type of professional identity that helped the transformation of the YMCA.

With the claim of non-existing identity Zald also indirectly questions the teaching level of the George Williams College in Chicago and Springfield College that trained secretaries. Actually, the YMCA was the first organisation to certify general trainers:

Certification of staff with respect to general training is a YMCA development, growing out of the need for education that led to

1 Zald & Denton 1963,226. 2 See chapter 2.4. 3 In this thinking ‘the authority of the keys’ was not submitted to 3 St. Peter alone but to the whole congregation and the congregation delegates it to pastors. The role of the laity is stronger than in the episcopal system. 186

establishing YMCA schools in the 19th century. In 1922, a plan for voluntary certification to be a YMCA secretary (today's 1 director) was drawn up.

THE FEDERATED STRUCTURE of the YMCA’s was one essential part of the emphasis on local decision making and it is the fourth factor in the transformation of the YMCA. Zald notes that

the federal structure permitted maximum and continuous adaptation to local opportunities and pressures. Conversely, however, that structure permitted local and state Associations to ignore, with 2 relative impunity, the judgments of national bodies.

However, the central American national body, International Committee3, expanded with the expansion of special programs like student work, railroad work and foreign work. Student YMCAs and Railroad YMCAs4, while working within the territory of local and state YMCAs, were independent from local control. According to Zald, the independence was possible because the International Committee was economically self supporting5. ”This work by the International Committee was widely viewed as a violation of local autonomy.” When its main activities suffered setbacks after the First World War, the International Committee lost its weight and in 1923 a new constitution defined that the United States National Council was a delegated body of local Associations. The

1 US YMCA 2000. 2 Zald 1970,56. The national organisation was established in 1854 as a confederation which ”would have no authority over the affairs of any Association and… duties limited to disseminating information and arranging conventions (Idem 57).” This same principle of local autonomy was in the next year written in the basic document of the World Alliance of YMCAs. The Paris Basis of the World Alliance of YMCAs state in its introduction as follows: ”The delegates of various Young men’s Christian Associations… assembled…, whilst preserving a complete independence as to their particular organization and modes of action, to form a Confederation…” Occasional Paper No.III 1856,23. 3 ‘International’ refers both to overseas work and to the fact that the organisation had as members all YMCAs in the US and Canada. 4 Zald does not mention the YMCA work with the Armed Forces which was one of the largest special activities of the movement. 5 Zald ignores that the membership basis of these special YMCAs were mainly from other places than where the Association was located. Students, railroad men and soldiers formed their own communities that had little interest in being part of the local YMCA. 187

International Committee was limited to the World Service and to foreign student programs1. Federal Structure was reasserted.2

Thus, Zald emphasises the minimal federal structure as an opportunity for local adaptation because independent associations are free to modify their organisation and activities according to local needs. In centralised organisations this is not so easy because there is often the policy to have similar units at local level.

On the basis of his studies of Dutch voluntary organisations, Lucas C.P.M. Meijs notes the benefits of local independence as well, and states: ”national policies must be uncomplicated, and limited to important issues that relate to the primary processes of the organization3.”

BROADLY STATED GOALS are the final factors that legitimated the transformation. Although the YMCA started as a Bible club in London in 1844, it soon included diaconal services into its programs4. Because the YMCA was not a church and not led by the clergy, its leaders were, according to Zald, free ”to interpret its mission variously5.” This led to the emergence of the program to develope the whole man which was stated in YMCA’s four fold program: spirit, mind, body and society. Thus, when the need of religious activities decreased, the YMCA could legitimate its transformation with the other aspects of its mission6.

Additional to those social factors that Zald

1 The YMCAs of the World 1958,199. 2 Zald 1970,57-63. 3 Meijs 1996,29. 4 This, accompanied with the organisation’s ecumenism and a passive role of the clergy, ”constituted an early polity commitment crucial for understanding later developments.” Zald 1970,26. 5 Zald 1970,48. 6 Zald 1970,42,54; Zald & Denton 1963,218f. 188 mentioned, there were probably two reasons that led to the adoption of the four fold program. The first was the muscular Christianity1 that gave rise to Salvation Army and Scouts as well as to YMCA sports. This theological stream favoured masculinity and emphasised that ”the body is the temple of the Holy spirit2”, and the temple should be kept in a good condition.

The other factor in adoption of the four fold program was the ‘second generation effect’ on which H. Richard Niebuhr has written in the context of sects3. Niebuhr’s basic thesis is that the second generation does not have the same ‘flame of the spirit’ as the generation of the revival and thus becomes closer to medium population. This evidently happened in the YMCA as well. The ‘second generation effect’ leads the sect or revival movement to focus on the upbringing of their children. This, in turn, leads to tension between supporters of ‘upbringing Christianity’ and ‘revival Christianity.’ In Zald’s description of the YMCA this phenomenon is also prevalent. Zald describes the battle between revivalists and moderates after the Civil War. The result was like the church-sect theory predicts: those who think that the organisation has secularised will quit and form their own organisation4. This same phenomenon also occurred in the Student Christian Movement that was associated with the YMCA. In 1910 the Inter-Varsity Fellowship5 broke away from the British SCM on theological and political grounds6.

IN GENERAL, as we can see, Zald’s work contains

1 On muscular Christianity see Mathisen 1990. 2 1 Corinthians 6:19. 3 Niebuhr 1954,19f. 4 In the Chicago YMCA the best known revivalist that formed his own evangelical organisation was Dwight L. Moody. While Moody resigned voluntarily and maintained good relationships with the YMCA, another national YMCA leader, George S. Fisher was forced to resign. Zald 1970,52f. 5 Later International Fellowship of Evangelical Students (IFES) . 6 Ledger 1991,1103. 189 elements of several theories. It follows the contingency theory in that the YMCA had several environments (the member or the client field, ecclesiastical field and the social service field). It is also in the same line with the natural systems approach when it sees the change in adherency and motivations of staff as important factors. The resource dependency theory is supported when Zald and Denton speak of an ”organization’s dependence on a paying clientele1.” Zald’s work is basically a study of the ”transformation and molding of organizational character2.”

In his analysis, Zald does not use the language of nonprofit organisation or third sector studies at all. His perspective is from the organisation studies and lacks a special nonprofit emphasis. This is natural because his work was done before the emergence of nonprofit studies as an independent research tradition. Thus, he does not discuss the sectors and their responsibilities but remains in the organisational level. However, his study gives light to one form of nonprofit organisations, namely voluntary federation type associations.

Although Zald sees that his theory fits into all kinds of complex organisations, there is one aspect that he does not deal with, namely YMCA’s character as a youth organisation3. On the basis of my field experience as a youth worker, I propose that there can be seen several special elements in youth organisations that make them a special case. Of course, these elements do not fit to all of them, but they appear in many of them. First, adolescents in voluntary organisations challenge quite easily old traditions and practices. Although there are

1 Zald & Denton 1963,222. Later Zald was one of the major proponents of the resource mobilisation approach which is a social movement variant to resource dependency theory. Practically they have the same idea of resources as determinants of action. 2 Zald & Denton 1963,216. 3 Yet another question is whether the Chicago YMCA, which was Zald’s special case, is an organisation of the youth or an organisation for the youth. 190 organisations with old traditions and symbols, these symbols have to be explained again and again in the language that contemporary youth understands. In this interpretation process, there is a potential for change.

Second, one special feature of youth organisations is that their adherency is in constant flux because the majority of the members are between 15 and 30 years. Because of the age of the members these organisations are continuously supplied fresh ideas which challenge them to respond to the needs of young people. A youth leader must have ‘a touch’ in her/his fingertips of what is ‘in’ and what is ‘out’ in the life world of youth. The other side of the coin is that there is often a lack of historical memory in these organisations. Additionally, the age issue sometimes constrains the possibility of young people to participate in the administration of their organisation. Thus, youth associations are often organisations for the youth.

Third, the time perspective of youth is different from adults. For example, if there emerges an idea about what young people want to do, you cannot say to them ”we’ll put it in the next year’s budget.” If a youth leader does not respond quickly to the challenges she/he faces, young people may seek someone else who responds.

Fourth, the strength of youth organisations is that they give young people a possibility to do something of their own. These organisations are fields of creativity and experiment. In these organisations young people are both actors and beneficiaries. Additionally, being in a group and having fun may be the leading motivation for the participants. This means that youth associations are also organisations of the youth.

In other organisations the elements presented above do not necessarily exist. For example, although Zald mentions 191 student YMCAs and other special associations he does not problematise if his theses are valid in the case of these student organisations. During the period (the late 1960s) that Zald made his research, student YMCAs and their international body, World Student Christian Federation (WSCF) went through a similar transformation as what Bert Klandermans noticed in the case of the Dutch Christian Peace Movement(DCPM)1. These organisations radicalised (WSCF was involved with the student radicalism and DCPM with the anti missile movement) but the outcomes were different from Zald’s findings concerning the Chicago YMCA. The similarity was that the mission was changed because the existing membership changed their world view (WSCF) or a new one was imported by new members (DCPM). However, the outcome was not a successful organisation but a diminishing one. After the wave of radicalism these organisations were only shadows of what they used to be. This was because the new niche did not support a stable flow of resources and bridges to the old constituencies were burned down.

These notions on youth organisations show that there are some special characteristics in them. One important task for future research is to develop theories that explain the dynamics of youth organisations.

Zald’s model is evidently the Chicago Metropolitan YMCA2 which is one of the largest YMCAs in the world. It can be questioned if the Chicago YMCA is a typical example or a special case. Compared to other YMCAs or other voluntary associations, local branches of the Chicago YMCA are quite equal to associations in small cities. The difference is that a branch is not independent. Moreover, the Chicago YMCA is such a large organisation that the distance from the grassroots to the central board is quite

1 Klandermans 1994. On the radicalisation of American student YMCAs, see Drawing Strength from the Past 1987. 2 Part II of Zald’s work deals only with the Chicago Association. 192 wide. Thus, the discussion about youth organisations above might be valid only on the branch level.

An interesting comparison is evidently the comparison between the US YMCA and the World Alliance of YMCAs. These both are federations, both have had problems with their Central Committee leadership which they have changed to representative form, both have changed and enlarged their target groups, both have adapted to the different kinds of niches, and both have been successful organisations.

Zald emphasises the values and norms that lie behind all organisations. Organisations are not only products of their environments but they are also actors which mould both their own structure and their environments in order to adapt into their environment. Lucas C.P.M. Meijs has emphasised the value basis of federal organisations from another point of view. He states that old managerial models do not work in voluntary organisations. An upper level organ (national level, regional level, etc.) cannot command local volunteers. Instead,

organizational control is helped by shared values, and practices based on these values. The more similar the mores among the local chapters of an organization, the more they contribute to 1 organizational control.

OTHER ORGANISATIONS are not as successful in their transformation as the Chicago YMCA. Walter W. Powell and Rebecca Friedkin have collected a sample of studies that present different results. They state that there are three types of organisational change of which only one type is successful. Powell and Friedkin see those organisations that do not basically alter their final goal as successful organisations. The YMCA is only one of them. Others that the authors mention are the US National Council of Churches in which ”the original goals were pursued more intensely2” and the March of Dimes which reached its

1 Meijs 1996,28. 2 See Jenkins 1977. 193 original goal (eradicating polio) and widened its mission to all birth defects1. According to Powell and Friedkin, the common determinant in all these cases is pluralism. ”No one professional group or single constituency dominates the decision-making process.”2

Powell and Friedkin classify an organisation as unsuccessful if it has altered its original goals. These organisations fall into two groups. The first group consists of those organisations where the change is ”driven primarily by the desires of leadership to maintain the organization” even when the constituency has disappeared. In these cases the transformative power came from inside. The second group of unsuccessful organisations consists of those organisations that have to change their goals because of financial or normative pressure from outside. As a sum, authors suggest that the following types of goals are displaced easier than other types: ”Goals that are favored by weak constituencies… [and] services that are provided to powerless.” Additionally, the goals are changed ”when financial resources are in short supply or controlled by a small number of supporters.”3

In this chapter, on the other hand, the general notion has been that an organisation is able to transform itself and its goals. In the next chapter we can see an opposing argument to this flexibility of organisations.

5.4.2. Natural Selection of Organisations

The ecological approach to organisations is a macro- sociological attempt to explain the influence of the environment on organisations. It focuses on NPOs in three distinct levels. First, ”the demography of organisations considers variations in vital rates of organisational

1 See Sills 1957. 2 Powell & Friedkin 1987, 190f. 3 Powell & Friedkin 1987,190f. 194 populations: founding rates, merger rates, and disbanding rates.” Second, ”the population ecology of organizations attempts to link vital rates between populations... population ecology models describe how founding rates and mortality rates are affected by the presence and density of other populations of organizations.” Third, the community ecology of organisations focuses on the populations that interact with each other.1

The ecological approach of organisations emerged as one effort to reduce the isolation of organisational sociology from other branches of sociology2. This isolation took place in the 1960s and the 1970s when organisation sociology was much the same as management studies that used an adaptation perspective as their main theory3. The main thesis in these studies was ”that organizations are affected by their environments according to the ways in which managers or leaders formulate strategies, make decisions, and implement them4.” The ecological approach, which borrowed its concepts from bioecology5, pointed out that the previous ”literature has overemphasized the [adaptation] at the expense of the [selection]6.” Thus, according to this approach the environment of the organisation is the major force in an organisation’s life.

In 1977, Michael T. Hannan and John Freeman7 published

1 Hannan & Freeman 1989,14; Carroll 1984,72. 2 The question is if their work remained only as an attempt since majority of the sociological dictionaries in the 1980s and the 1990s do not mention the approach at all. It is questionable if the right way to bring organisation studies closer to general sociology is to borrow theories from biology. 3 Hannan & Freeman 1989,28-33. 4 Hannan & Freeman 1977,930. 5 The difference between animal and organisational ecology lies in two points. First, social organisations have a greater possibility to adapt themselves to their environment than animals. Second, individual organisations have potential to grow almost without limit. Hannan & Freeman 1977,937. 6 Hannan & Freeman 1977,938. 7 Hannan & Freeman have made their empirical studies on Labour Unions, manufacturing firms, restaurants and newspapers. Hannan & Freeman 195 their article The Population Ecology of Organizations which stated that ”in order to deal with the various inertial pressures the adaptation perspective must be supplemented with a selection orientation1.” Their perspective was on populations of organisations and they included the niche theory with competition models to describe the process producing isomorphism between an organisation’s structure and the environment’s demands. Niche is a concept that Hannan and Freeman use to describe the organisation’s life world. It is defined as

that area in constraint space (the space whose dimensions are levels of resources, etc.) in which the population outcompetes all other local populations. The niche, then, consists of all those combinations of resource levels at which the population can survive and reproduce 2 itself.

Later, in their book Organizational Ecology3, Hannan and Freeman developed the theses of the earlier article. The fundamental goal of their work was to answer the question ‘Why are there so many kinds of organisations4?’

ISOMORPHISM has been the classical answer to the question. Amos Hawley5 stated in 1944 that organisational diversity is isomorphic to environmentsal diversity. Hannan and Freeman supplemented it with selection and competition theory. These theories state that the number of organisations depends on the resources available in their environment6. If there are organisations that depend

1989,xiv. 1 Hannan & Freeman 1977,933. Although their studies are mainly on FPOs, their studies on Labour Unions link their theories to NPO studies. 2 Hannan & Freeman 1977,947. 3 Hannan & Freeman 1989. 4 Hannan & Freeman 1977,936; 1989,92. The question is modified from Evelyn G. Hutchinson’s biological article: Homage to Santa Rosalia, or Why Are There So Many Kinds of Animals? Idem. 5 Hawley 1944,1950,1968. 6 The importance of resources is stated in two theories. In third sector studies there is the resource dependency theory and in social movement studies there is the resource mobilization approach. Both underline that the crucial factor in any organisation’s survival is its access to resources. These resources can be material or symbolic. One of the main theses of the resource mobilization approach is that 196 on the same limited resources, the competition will eliminate those whose characteristics fit less to the environment. Further, they argue that organisations of different size depend on different kind of resources. This leads to the conclusion that large organisations may be a threat to medium size organisations but not to small ones. Small ones can grow even when the medium size organisations are eliminated.1

However, according to Hannan and Freeman, the principle of isomorphism is valid only in stable environments. In unstable situations the organisation must configure itself to fit the whole set of environments. In this case the organisation is not optimal in any special environment but manages to deal with different ones. This solution ensures the organisation's survival if the environment changes. Hannan & Freeman also argue that this is the reason to employ professionals: ”They increase [an organization’s] capacity to deal with a variable environment and the contingencies it produces2.” The main idea is the question of generalism and specialism. This distinction

refers to whether a population of organizations flourishes because it maximizes its exploitation of the environment and accepts the risk of having that environment change or because it accepts a lower level of exploitation in return for greater 3 security.

Hannan and Freeman argue that ”under stable environmental circumstances, generalists will be outcompeted by specialists.” However, they argue that also rapid changes between environmental changes (like seasonal variation) favour specialism because the costs of generalism are high (higher salaries for better educated professionals, unused capacity kept in reserve for certain

the increase of general wealth in society also increases the number of social movements. 1 Hannan & Freeman 1977,938-943,945f,962. 2 Hannan Michael T & Freeman 1977,948. 3 Hannan & Freeman 1977,948. 197 situations, etc.). This fast change they call fine-grained environments. The opposite is coarse-grained environment, in which the changes are slow and the generalists do not need to spend their energy in altering their structure. In such conditions generalists are in a better situation. A special form of generalism is polymorphism. In polymorphism the sub-units adapt themselves with different strategies to their special environments. The units that manage to adapt themselves better in their environment can feed the units that do not succeed so well. When the changes occur the roles of these units may change and the former successor can be a new looser. Anyway, the whole organisation survives.1

One advance of polymorphism is the possibility to diffuse innovations that have been practised in different environments2. These, in turn, can be modified to new environments. The YMCA is a typical example of this phenomenon. Military canteens were first used in the US Civil War. Until the end of the First World War they had become an activity of almost all national YMCAs. Similarly both YMCA games, basketball and volleyball spread through the YMCA networks. On the other hand, this polymorphistic model requires that the federation system has some mechanisms to support its relatively weakest members. Otherwise the survival possibilities of the relatively weakest member of the federation do not differ much from its non-federated rivals3.

1 Hannan & Freeman 1977,948-954. 2 I have a strong conviction that one of the reasons why Europe developed more quickly than the older civilisations was in this aspect. Europeans lived in relatively small area which, however, had quite different environmental conditions. When people of these different environments interacted and changed experiences, this enabled them to benefit from the innovations that had been made for totally different problems than they had. 3 I refer again to the YMCA which has systems of support for the weak movements in the Third World countries but not for weak movements in industrialised countries. As a result, the Austrian YMCA was officially buried in the World Council of YMCAs in 1998. 198

ORGANISATIONAL INERTIA, according to Hannan and Freeman, means that organisations have a tendency to resist changes. The authors offer several reasons for this tendency. First, an organisation’s investments may not be transferable to other tasks. Second, decision makers face constraints on the information flow. Third, in organisational changes the political equilibrium is disturbed and that leads at least some sub-units to defend their previous positions and resist the reorganisation. Fourth, the procedures will become sanctified and such normative agreements constrain the transformation. Fifth, there are numerous legal and fiscal barriers on entry and exit from fields of activities. Sixth, the environment emanates certain legitimacy constraints. Seventh, in a world of uncertainty the environment can place high value on reliability and accountability. This in turn constrains everything that disturbs the routines guaranteeing low variance in an organisation’s output.1

Additionally, individuals seem to have a general fear of change. The first working solution2 tends to become dear to its users. When this is often accompanied by vague plans about the benefits of the proposed change, and if the proposed new model is not properly tested, people may hesitate to adapt new solutions3. Often the change happens with the learning by doing principle or when people see how others use the new ways of doing something. The other way that leads to transformation, as Zald’s and Klandermans’ examples show, is the emergence of new people

1 Hannan & Freeman 1977,931f; 1989,66-69,72ff,75f. 2 A concept that I learned in the lessons of computer programming. The idea was based on the task to find a path to some target when there is a web of routes. With a systematic analysis of all possibilities it is possible to find the shortest one but it is time consuming. Thus, sometimes it is more effective to use the first found path even if one does not know whether it is the shortest one. 3 The experience of the Finnish bank crisis in the beginning of 1990s supports Hannan & Freeman’s theory. Those banks that believed new economic theories of banking suffered such deep losses that it pushed the whole country to deep regression and extremely high unemployment. Today they do not exist any more as independent organisations. Those who had quite conservative policy survived. 199 in the organisation.

Hannan and Freeman state that structural inertia is both relative and hierarchical. Relative structural inertia means that the speed of change in an organisation is slower than in the environment around it. However, according to the authors, in another environment the same speed can mean that there is no inertia. For example, a social service association may have high inertia in a fast changing social sector but not necessarily in the larger nonprofit sector. According to Hannan and Freeman, hierarchical inertia means that some parts of the organisation are more vulnerable to change than others. The most stable level of the organisation is its mission, which has the highest inertia. The second level is its institutional system which links the organisation to wider society. The third level is the managerial or administrative system which uses those decision-making rules that are determined in the institutional level. The fourth level, technical system, has the lowest inertia. The changes in the upper level lead normally to changes in the lower levels but not necessarily vice versa.1

THE EVALUATION OF HANNAN AND FREEMAN’S THEORY reveals that they do not make the basic distinction between nonprofit and for-profit organisations. The ecological model sees all organisations basically alike. From this point of view, the important issue is the niche that an organisation occupies because this determines where the resources come from. Thus, in this theory the industry is seen more important than the sector. Because Hannan and Freeman’s theory is basically a general organisational theory, they do not deal with the questions of sector responsibilities at all. In spite of this lack of nonprofit emphasis, the theory covers third sector organisations as well as business organisations. In their studies Hannan and Freeman have studied both firms and

1 Hannan & Freeman 1989,70f,77ff. 200 labour unions. The latter is their root model for third sector organisations.

Thus, the niche theory of Hannan and Freeman interprets the forces that influence organisations in their environment. However, in the light of previous adaptation theories, these forces should be seen as potentials and not as determinants that automatically lead to some result. An additional point, that Hannan and Freeman do not mention, is that in complex organisations these same forces are working inside organisations as well. This means that sub-organisations compete inside the organisation in a similar way as Hannan and Freeman explain in the case of independent organisations.

When pointing to the stable elements of organisations Hannan and Freeman stress the selection processes between organisations. Additionally, in complex organisations the selection can happen also in the transformation of an organisation. I again use the YMCA as an example. In 1955- 57 and in 1973 the World Alliance of YMCAs reformed its structure. In that process some of the old standing committees were cancelled and some new ones established. In Hannan and Freeman’s terms selection caused the death of these suborganisations when the environmental conditions (main organisational needs) changed. This process can also happen in federations in the vertical level. In the First World War the main activity of the World Alliance of YMCAs was the work with the Armed Forces. In the Second World War this was the responsibility of National YMCAs while the World Alliance concentrated on the service of prisoners of war. Recently, a similar shift can be recognised in the field of refugee work which has been moved to a responsibility of area organisations.

Hannan and Freeman have made a point in their supplement of selection processes to older adaptation 201 theses. Still, in the light of their metaphor, there are some issues that they do not deal with. First, using evolutionary language, there could be a theory of mutations. With mutations I mean those changes that are forced from outside of the organisation. This differs from adaptation which is understood as an organisation’s own attempt to transform itself to meet new needs1. Such mutations can be, for example, the Nazi impact on German NPOs in the 1930s and the 1940s2, the transformation of the Swiss-type International Committees like World YMCA and International Red Cross3, the fate of the Standard Oil or the cases of take-over4. In all of these cases there was an external pressure that cannot be explained with terms of adaptation or selection.

Second, Hannan and Freeman do not deal with the role of mother organisations and/or midwife organisations5 in

1 What I call mutations comes close to theories of necessity in the change process. The third possibility, besides selection and necessity theories, are chance theories, which point to the random elements in change. Aldrich & Marsden 1988,368. 2 See Bauer 1990b. 3 The International committees were not democratically elected but more like foundations which supplemented themselves when needed. Both YMCA and Red Cross faced the same pressure from the national level to democratise the structures. They took different paths. The YMCA democratised its constitution to a federation in 1955. The International Red Cross could not do this. The reason for this is that it is not actually a nongovernmental organisation but a governmental one because it was founded in 1863 with the agreement of governments (Geneva Convention). Instead, the League of Red Cross Societies (today the International Federation of the Red Cross and Red Crescent Societies) was founded in 1919 as a federation between national movements. International Organizations 1996,869,950; And Now - Tomorrow 1957,87,219-228. 4 See Klandermans 1994 mentioned above. In the case of his study the majority of the membership basis was changed. When I was in secondary school, I remember how we, who joined school politics, were taught how to occupy such associations which had property but few members. As a result, the majority of the Finnish teetotalism associations of teenagers had nothing to do with the teetotalism in the 1960s and the 1970s. 5 The concept of movement midwife is from Christian Smith (1996,16) and I modified from that the concept of mother organisation. The difference is that the midwife organisation only helps the new organisation to emerge (like the YMCA helped the YWCA) and the mother organisation is a parent of the new one (like the YMCA is to the World Student Christian Federation). These dynamics differs from 202 the birth process. These questions have been important in social movement studies. Mother and midwife organisations support legitimacy, informal networks, leaders, financial support and organisational practices to emerging organisations1. The new organisation does not start necessarily from zero but may have full functioning infrastructure from the beginning. The most quoted example is the US Civil Rights movement which was based on the Black Churches that supported it2. In the same way, the World Alliance of YMCA was built on the basis of the older Evangelical Alliance.

Third, related to the previous, there can be recognised processes where some parts of the organisation ‘grow up’ and this causes the transformation of the mother organisation3. This independence process can happen with mutual understanding and in that case does not cause competition4. On the contrary, they can specialise in different fields and have different resource bases but still feel that they have some bond. This is often the case in social and religious movements which create different organisations for different purposes.

Fourth, Hannan and Freeman do not deal with the adherency level at all. This might be because their main

church - sect dynamics in a way that a new organisation is not necessarily a protest against the old one. 1 Doug McAdam, John D. McCarthy and Mayer N. Zald wrote about the social movements (and their organisations) as follows: ”The existence of established groups within the movement’s mass base ensures the presence of recognised leaders who can be called upon to lend their prestige and organizing skills to the incipient movement.” McAdam & McCarthy & Zald 1988,716. 2 See Morris 1984; 1996. 3 An old example is how the Scout Movement and Student Christian Movement grew apart from YMCA. They remained in a close relationship but are now independent from their mother organisation. 4 Alternatively, the independence process can happen in schism and then we are facing the processes that are studied in church-sect studies. It is a field of studies that begun from Weber’s priest - prophet (or bureaucracy - charisma) distinction and was elaborated on by his pupil Ernst Troeltsch. This theory has dominated studies of religious movements for decades. 203 focus is on economic organisations. However, in NPOs the changes in adherency can also change the mission of the organisation as Bert Klandermans showed to have happened in the Dutch Christian Peace Movement1. Similar transformations also happened in many student organisations which were politicised during the 1960s. Vesa Puuronen’s critique of Finnish youth organisation studies can also be seen valid here:

Studies are methodologically objectivistic which means that young people belonging to organisations have been seen as passive objects that certain external factors determine... In studies there is no attempt to reach the young people’s own active role as subjects of the action... The methods used have... strengthened the tendency to treat young people as objects. In the use of statistical methods for the study of humans, it is 2 quite natural that they are treated as products, as objects...

Intellectuals can be seen as special cases among adherency. In many cases the environment of an organisation is constructed by common representations. Often it is not so important what the environment is in reality but what people think it is. Ralph Turner and Lewis Killian have pointed out the emergent norms that direct collective action. Their thesis is that when people face an unusual situation they first form a shared interpretation of their situation and then decide what should be done3. According to Ron Eyerman and Andrew Jamison the role of intellectuals is crucial in this process. Movement intellectuals are the ones who formulate the shared interpretation into words4. Intellectuals can also be charismatic leaders but often there is a difference between the prophet, organiser and the other leadership roles. Thus, size cannot be the only qualitative aspect that is important. In human ecology, exceptional individuals must be taken into account because the environment obviously ”produces” them to ensure the

1 See Klandermans 1994. 2 Puuronen 1987,17. 3 Turner & Killian 1987,25-30. Neil Smelser called this collective interpretation as generalised belief. Smelser 1970,8. 4 Eyerman & Jamison 1991,98f. 204 survival of the group. Additional to this, we must remember that human beings are also capable of modifying and controlling their environments.

Fifth, it is still unclear how to define the concept of organisation. Hannan and Freeman mostly deal with independent organisations. However, federations differ from these to a great extent. Although an international NGO is a legal entity with certain limits, it is also an umbrella of numerous national organisations which, in turn, are umbrellas of other organisations. When we speak about the World YMCA it can mean either the relatively small organisation in Geneva or the network of 45 million people around the world with some sense of unity.

Sixth, although Hannan and Freeman do not deny the adaptation processes, they stress selection in a way that it seems to shadow other processes. The analogy of genes stresses the stability of organisational forms. The concept of structural inertia leads a researcher to analyse what is stable and what is unstable in an organisation. In the case of the World Alliance of YMCAs, the stable phenomenon has been its Paris Basis which has remained as bond of national YMCAs for 150 years. However, the same basis has been replaced on the national level several times. Additionally, other ecumenical organisations1 that adopted the Paris Basis as their mission statement have changed their bases. These changes have happened in situations where ideological criticism has escalated so that the critics have received majorities in the decision-making organs. Thus, the statements might often be results of power relationships inside the organisation as Zald, Kanter and Summers have pointed out in the previous chapters.

AN APPLICATION of Hannan and Freeman’s theory to voluntary organisations was made by Miller McPherson in

1 YWCA, WSCF, WCC. 205

1983. The focus in this study is on the adherency question. However, it is not from the actor’s perspective (as in Zald’s work) but from the resource perspective. Members are defined as an ”extremely important resource for which organizations compete.” McPherson’s analysis starts with Hannan and Freeman’s concept of niche, which in animal ecology

is the location in multidimensional space defined by the resources in the environment. The se dimensions usually fall into three general categories describing what the animal eats, where 1 it eats, and when it eats.

In organisational ecology the dimensions of niches are location, timing and social characteristics like age, sex, social status, etc. The social characteristics define the membership basis. For example, youth organisations and veteran organisations do not often compete for the same members. According to McPherson, ”the physical location of organizations will dictate where their members come from2.” Finally the time dimension determines, according to the author, the possibilities to participate. The time scale may vary from hours (meeting times of several organisations may be overlapping or the work creates limits in participating) to years (to different ages differing organisations are attractive).3

McPherson pointed out that specialised organisations do not compete with each other because ”they occupy small regions in social space where they presumably are well adapted to monopolize resources.” According to McPherson, specialists compete with general purpose organisations more heavily than vice versa. When generalists compete with each other the competition is more symmetrical.4

1 McPherson 1983a,520. 2 McPherson uses the Lotha-Volterra equation to calculate the growth rate of organisation according to the carrying capacity of the community. McPherson 1983a,522. 3 McPherson 1983a,520f. 4 McPherson 1983a,526. 206

The limits of the ecological analysis of members lies in its ignorance of individual motivations and cultural effects. For example, religious constraint can limit the membership basis more than ecological potential. Similarly, some activities are more popular than others. For example, in sports the zeitgeist determines much what type of sport is ‘in’ and what is ‘out’. If these dimensions are added in determining the niche, the model will give more exact results. When one uses general statistics, as McPherson does, the constant danger is in combining together such organisations that are not in fact in the same niche.

McPherson has also linked ecological organisation theory with network analysis. The study that deals with the size of voluntary organisations shows

that organisation size is strong1y related to town size, extralocal affiliation, economic activity, stability, and centrality... The overall picture of the community which emerges from this perspective is of a web of interconnections among organizations wherein large, economically important organizations with extra- local relationships to parent organizations are at the center, and a successive army of smaller, expressive, local organizations are at the periphery. The large organizations are not only more 1 central, but more stable in their membership.

In general, ecological theory offers much information of the potential forces of an organisation’s environment. Its limit is that it ignores the motivational and cultural aspects of organisational actors. Even McPherson’s theorising does not touch the crucial question ”What services are seen as appropriate to be organised in the voluntary sector and what belongs to the public sector?” One theory field that has been added to ecological theory is the institutional perspective, the focus of which is on the interaction of an organisation with the hosting cultural values.

1 McPherson 1983b,1060. 207

5.4.3. Organisations as Cultural Expressions

THE INSTITUTIONAL RULES OF THE SOCIETY are, as the name indicates, the main focus of the institutional theory. On one hand, it can be seen as a special theory of the organisational environment. Hannan and Freeman argue that in spite of the fact that

neo-institutional theory take pains to distance this approach from population ecology theory... there is no fundamental 1 inconsistency between the two approaches

On the other hand, in institutional theory there can be recognised one basic difference in comparison to ecological theory: institutional theory emphasises organisational transformation more than ecological theory does. In this sense institutional theory can be seen as a part of adaptation theories as well. Additionally, the main research question is different from Hannan and Freeman’s ”why are there so many kinds of organizations?” Instead, institutional theory asks, as DiMaggio and Powell put it: ”why there is such startling homogeneity of organizational forms and practices?” In the same way as ecological theory does, institutional theory sees the answer in isomorphism. However, as DiMaggio and Powell note, ”there are two types of isomorphism, competitive and institutional.” Ecological theory sees only the competitive isomorphism which fits some cases but does not explain the whole picture.2

At the same time that the competition has a tendency to create isomorphism, organisations adapt to meet the institutional rules of the society as well. The basic argument has been stated in the classical text of John W. Meyer and Brian Rowan from 1977. They state

that the formal structures of many organizations in post- industrial society dramatically reflect the myths of their institutional environments instead of demands of their work

1 Hannan & Freeman 1989,34f. 2 DiMaggio & Powell 1983,148ff. 208

1 activities .

Meyer and Rowan criticise previous organisational theories stating that while focusing on management issues these theories take legitimacy for granted. The background assumption in these organisational theories has been the Weberian notion ”that the coordination and control of activity are the critical dimensions on which formal organizations have succeeded in the modern world.” This is problematic, according to the authors, because empirical studies have shown that there is ”a great gap between the formal and informal organization… and rules are often violated.” According to Meyer and Rowan, these findings need explanation.2

Meyer and Rowan concentrate on the explanations of the formal organizational structures. They, in turn, seem to take for granted that these organisational forms are ineffective - that is the reason why the formal rules are violated. Authors state that the decision making, public policy and climate opinion all take for granted some institutionalised beliefs concerning occupations, programs and technologies. These beliefs state what is right and what is wrong, what is favourable and what is despicable, what are the responsibilities of different sectors in the society, what are qualifications of employees, etc. There are institutionalised rules that people take for granted and simply behave according to these rules3. Meyer and Rowan have made the following propositions on these rules:

1. As rationalized institutional rules arise in given domains of work activity, formal organizations form and expand by incorporating these rules as structural elements. 2. The more modernized the society, the more extended the rationalized institutional structure in given domains and the greater the number of domains containing rationalized 4 institutions.

1 Meyer & Rowan 1977,341. 2 Meyer & Rowan 1977,342f. 3 This idea is from Peter Berger and Thomas Luckmann. Berger & Luckmann 1972. Meyer & Rowan 1977,342,346. 4 Meyer & Rowan 1977,345. 209

Thus, institutional perspective sees all organisations as a reflection of the norms of the surrounding society. When the modern society becomes more and more institutionalised, organisations have to adjust their structures and procedures according to legislation (for example, environmental, consumer, gender equality or tax legislation), standards (for example, ISO qualifications or internet protocols), public opinion (for example, on environmental issues, behaviour in other countries1), etc. In some cases these examples are dysfunctional to the main goal of an organisation, sometimes they are neutral and only incidentally increase an organisations effectivity. Organisations have to follow the institutionalised rules of the society or they lose their legitimacy.

As mentioned above, DiMaggio and Powell focused on isomorphism. They ”identify three mechanisms through which institutional isomorphic change occurs.” First, there is coercive isomorphism which results from an organisation’s dependence on another organisation. The pressure to modify structures and procedures may be formal or informal. For example, a nonprofit organisation that sells services to a municipality has to fix its procedures in order to meet the requirements of the client. This includes standardised procedures, qualifications of service level, reporting system, bookkeeping, etc.2

Second, there is mimetic isomorphism. Basically this type of isomorphism is a response to uncertainty. In a situation

when organizational technologies are poorly understood, when goals are ambiguous, or when the environment creates symbolic uncertainty, organizations may model themselves on other

1 One of the best examples of the influence of public opinion was the campaign against Nestle in the 1990s when people did not tolerate that the company caused baby deaths when their advertising of their baby’s milk mixture was so effective that mothers did not breast-fed their babies any more. Other examples are pressures against Shell, Coca-Cola, and UPM-Kymmene. 2 DiMaggio & Powell 1987,150. 210

1 organizations.

The rationale in this kind of behaviour is that it offers, with a low expense, a model that works even when people in the organisation do not know why it works. Organisations tend to imitate especially ”similar organisations in their field that they perceive to be more legitimate or successful.” Another reason for this kind of behaviour is that an organizational change is visible. Thus, it serves as a signal for the supporters and clients that the organisation is trying to improve its policies.2

The third type of isomorphism comes from normative pressure. DiMaggio and Powell note that there are two interrelated mechanisms that influence this pressure. First, the formal education and legitimation of a cognitive base socialises employees to have a similar world view and habitus. Another source of normative pressure is ”the growth and elaboration of professional networks.” DiMaggio and Powell state that

To the extent managers and key staff are drawn from the same universities and filtered on a common set of attributes, they will tend to view problems in a similar fashion, see the same policies, procedures and structures as normatively sanctioned and 3 legitimated and approach decisions in much the same way.

According to DiMaggio and Powell, this professionalisation of the personnel goes normally in tandem with the structuring of the field. There emerges ”a commonly recognized hierarchy of status, of center and periphery.” In this hierarchy the central organisations become both active and passive models which are copied throughout the field.4

EVALUATION of institutional theory shows us that this perspective was created as part of the sociology of

1 DiMaggio & Powell 1987,151. 2 DiMaggio & Powell 1987,151f. 3 DiMaggio & Powell 1987,152f. 4 DiMaggio & Powell 1987,152f. 211 organisations in the US. In the same way as in the case of ecological theory, there is no basic difference between organisations in different sectors but the dividing line is if the society sees them a legitimate or not. Meyer and Rowan created their theory on the basis of their studies on the structures of educational organisations1. Thus, they focus more on the industry than on the sector. Powell and Friedkin are in the same line when they argue that there is not ”a stark contrast between organizational change processes in business firms and in nonprofits2.” When this theory does not see basic differences between different sectors, it neither does distincts their responsibilities. The main point is the legitimacy that the society offers. This also means that the theory is meant to explain all kinds of organisation - society relationships, not only nonprofit - society relationships. If one society sees nonprofit form as a suitable means of education and another favours public schools, the theory explains both cases with the same concept: legitimacy.

If we compare institutional theory to economic theories, we see that the first one underlines the solutions that have little to do with economical rationality and effectiveness. Organisations are mostly constructed on legitimacy basis. Effective organisations are not effective per se but effective in such a way that the society sees them as effective. Thus, when economic theories see only egoistic rationality as the main force of human behaviour, institutional theory sees other values as well. As Paul DiMaggio and Walter W. Powell state it:

Organizations compete not just for resources and customers, but for political power and institutional legitimacy, for social as 3 well as economic fitness.

1 Meyer & Rowan 1992(1975). 2 Powell & Friedkin 1987,180. 3 DiMaggio & Powell 1983,150. 212

5.4.5. Evaluation of the Third Sector Sociological Studies

DEFINITIONS of the third sector are not of main interest in organisation theories. In general, theories do not define the third sector at all. Implicitly, however, definitions can be found in some of these studies as well. In Zald’s work the YMCA has been framed ”as that of a general service organization designed to facilitate the social, physical, and not-too-intellectual interests of community members1.” Powell and Friedkin focus on different membership and social service organisations outside the realm of the state and McPherson focuses on membership organisations.

RESPONSIBILITY questions between different sectors are as well, absent in these studies. They take for granted that there are some organisations that work outside of the realms of state and market. This, again, is due to the focus on the industry instead of the sector.

THE TYPES OF THE THEORIES in this chapter can be divided into three groups. In the first group there are studies that focus on the context of the organisations. They try to explain how the environment enables or restricts the possibilities of the organisations and form the opportunity structures for them. We can identify economical opportunities which include both material resources and human resources. There are also political opportunities that are determined by the government and other political actors. Cultural opportunities determine the legitimate models of organising issues, action, roles of different organisations, etc. I would like to add one opportunity structure more, namely religious opportunities. Often religions have strict ethical rules concerning what their adherents can do and what they can not do, and these rules can differ from the cultural

1 Zald 1970,3. 213 rules1.

The second group focuses on the interaction processes within the organisations. These processes contain managerial decisions, power structures, unofficial networks, group dynamics, etc. These also have an impact on the organisation’s behaviour.

The third group consists of the questions of raison d’être of the organisations. Here we come to Weberian arguments of the priority of ideas over matter. The emphasis on the raison d’être of the organisation calls into question such items as collective identity, world view or belief system and mission view. These form, as Hannan and Freeman say, the core of the organisation where the inertia is greatest. However, these also interact both with each other and with the opportunity structure. If the mission view is wide enough, it can legitimate different strategies and tactics under different opportunity structures. For example, when the YMCA created its four fold program (body, mind, spirit, society) it legitimated the concentration on sports in a situation when there were no possibilities to carry on religious activities2. Missionary associations have made similar solutions in the countries where Christian missionary work has been prohibited. They have concentrated on social work, health care and schools. This would mean that polymorphic organisations can be both generalists and specialists depending on the special environment where they act.

When we look at the theories of the sociology of organisations we see that they are formed in an interaction between classical Weberian bureaucracy

1 A good example is the attitude towards blood among Jehovah’s Witnesses. 2 This happened, for example, in Latin America, where the Catholic Church was afraid that the YMCA was mainly a Protestant religious organisation. In this situation the YMCA did not launch its own religious programmes but became a Christian social service and sports organisation. The YMCAs of the World 1958, 170. 214 theories and economic theories of firms. It is a surprise that social movement theories are ignored. In the collective behavior tradition of the Chicago School there were already in the 1950s theories about social movement organisations and about how movements emerge and institutionalise. These theories were based on Simmelian small group sociology and they interpret the interactions between individuals, organisations and society. For example, Ralph H. Turner and Lewis M. Killian’s emergent norm theory is useful when we try to explain the emergence of rules and norms that institutional theory underlines.

THE RANGE of the theories vary from McPherson’s micro- meso level analysis to the macro level phenomena. While Zald, McPherson, and Powell and Friedkin focus on the organisational level, the majority of them have focused on the industry and society levels. The major theme has been the interaction of an organisation with its environment.

METAPHORS behind these theories vary as much as the other parts of the theories. Zald’s model is evidently the Chicago YMCA, which, as I stated, is not a typical model of YMCAs. For him, the association is framed as an example of a complex organisation. This complex organisation frame can be seen in many other organisation studies as well. Another clear metaphor is seen in Hannan and Freeman’s works. For them the root metaphor is an organism. All organisations are like biological organs that compete for survival in their organisational environments. Finally, Meyer and Rowan’s model for their theory is a school. Other metaphors of the theories are not as evident.

INGOs also have their environments. Zald, Powell and Friedkin focus on how organisations try to modify their structure and policy according to their environment. They all point out the significance of a broad mission view and federal structure. These notes are supposedly important in INGOs as well. Zald’s work can be seen as one of the basic 215 theories in developing a theory of international federation type NGOs.

Hannan and Freeman’s notes of organisational niches and hierarchial inertia are remarks that should be taken seriously in the case of INGOs as well. In the case of the YMCA, the hierarchial inertia can be seen in the Paris Basis of the World Alliance. Although it has been challenged several times, it has remained almost the same for 150 years. On the other hand, the technical system - activities - have increased and changed tremendously and are in constant development. Between these, the structure has changed only seldom. The major change happened in 1955 when the international committee structure was changed to a defined federal structure. Smaller structural changes have occurred from time to time in sub-committees, in area organisations and in the sharing of responsibilities between the world Alliance, national movements and area organisations. In general, Hannan and Freeman’s hierarchial inertia seems to explain the transformation of the World Alliance of YMCAs.

The other theme, organisational niche, is reflected by the institutional theory as well. If the ecological theory focuses on resources, the institutional theory focuses on the legitimacy. However, the question of the society that legitimates the organisational form seems to be more complex than in the local or national level. There are, namely, at least three potential environments that state claims to the organisation. When the YMCA is a federal organisation, its member movements form one society that can determine what is legitimate and what is not. When the member movements are from 130 countries, the diversity is large. This diversity means that there should be some members that are more important than the others - otherwise the heterogeneity of demands would be too large. Another environment is in the context of field work of the World Alliance. Although the majority of the activities 216 are on the behalf of national movements and area organisations, there are some projects that the World Alliance has responsibility over. This means that the questions that emerge in countries of those field activities have a greater importance than if they were only questions of national movements. Third, there is the international society in Geneva - people working in the UN and in other INGOs. They form a network of professionals, and this network valuates central and peripheral organisations. Finally, the YMCA is an ecumenical organisation as well. This means that the third context in which it works is a field of Christian churches. This, in turn, leads to questions of Christian ethics, doctrine and similar professional networks as in the context of the UN. All these three contexts make legitimity claims that the World Alliance of YMCAs has to meet.

In DiMaggio and Powell’s theory there is the distinction between central and peripheral organisations. Since the YMCA is one of the oldest INGOs, it has been a model for the institutionalised rules in the ecumenical movement, in youth work, in refugee work, etc. In this case we have to ask where did the YMCA got its models. Zald describes that some of them came from evangelical churches but there are also longer traditions: some models came from pietism, some from Huguenots and some are from an older Christian heritage. These tradition-historical traits give one possible explanation of the roots of the international society as well. The centre of this society is mainly western with a strong Judeo-Christian ethical basis1. This in turn raises questions of the legitimacy of the whole INGO community in the non-Christian world.

1 For example, The Declaration of Human Rights has been criticised that it is totally based on Judeo-Christian ethics and does not reflect the values of other ethical codices. 217

5.5. Discussion on Third Sector Political and Sociological Studies

The main research question of part II is: ”How is the third sector constructed in different third sector research traditions?” In the case of political and sociological theories the answer is not as evident as it is in the case of economic theories. This is because third sector has been studied as part of a wider context. Organisation studies especially focus on the whole realm of organisations and not only on nonprofits. They emphasise the similarities of all organisations over differences between organisations in various sectors.

A similar conclusion can be drawn in the case of all these theories. They are not exactly theories of the third sector but theories of welfare. They regard the third sector as one possibility in arranging services. Here again, the focus has been on similarities or different mixtures than on sector differences. As Matthies presents in a pointed way: ”The third sector is not different, not third and not even a sector1.”

In general, we can conclude that in the definition of the third sector, the country where the research is conducted is more of an important determinant than the discipline. Political and sociological studies reflect the definitions that are used in the culture of the scholar. From the perspective of the disciplines there are no similar political or sociological definitions of the third sector as there are economic definitions.

Now it is time to offer a partial answer to the central question of this study: ”Why are third sector studies important in contemporary society?” When ecological theories pointed out that the third sector is a

1 Matthies 1994,10. 218 remarkable economy in the fields of health and social service, sociological theories emphasised other functions of the third sector. Political studies have shown that the third sector serves as a mechanism by which conflicting values and interests can be accommodated in the society. Nonprofit organisations do not have to follow the same rules as the state administration and, thus, they can direct their special services to small fractions of society without claims of discrimination. By doing this they test new ways of organising activities and the best results of these tests are diffused into the society.

Organisation studies of the third sector have emerged from the sociology of organisations. Since organisations in the third sector differ to a certain extent from public bureaucracies and business companies, organisational studies of nonprofits can widen the understanding of organisational behaviour. From this point of view third sector studies do not form a separate literature but are an essential part of the sociology of organisations.

In general, sociological theories have focused on macro-meso levels and on the interaction of an organisation and its environments. However, there are also micro level studies that interpret how an organisation is interacting with individuals. This theme will be evaluated in the next chapter.

219

6. The Third Sector as Part of Individuals’ Life Worlds

In the previous chapters the focus has been on the meso and macro level phenomena of the third sector. However, there can be no nonprofit organisation without people who run them; without people who give them their money; and without people who volunteer in their activities. The usual nonprofit research statement is that one of the great advances of the NPOs in relation to FPs is their ability to recruit voluntary labour force. The NPOs have a significant amount of volunteers that offer their time free of charge to these organisations. Both economists and sociologists have been interested in the motivations of people who are involved in nonprofits. One major question concerning motivations is whether a man is altruistic or selfish.

The material for this chapter differs from other material in this study. Above I have evaluated the main economic, political and sociological macro and meso theories of third sector. This has been possible because they have been relatively few in number. In the case of voluntarism the situation is different. David Horton Smith noted already in 1975 that ”there are by now probably a few thousand empirical studies of different aspects of individual VA [voluntary action], and at least a thousand dealing specifically with VAP [voluntary association participation]1.” Thus, the research is so extensive that it would be a task of several independent evaluations. Instead, in this chapter I use (along with some theoretical works) previous reviews in order to give some overall views on the individuals’ voluntary behaviour.

1 Smith D.H. 1975,252. 220

6.1. Altruism

Most theories above have taken for granted that rational choice determines the actions of individuals. However, not all people want to be rich and beautiful. Robert Scott Gassler criticises the economic theories in that

They are all incomplete to the extent that they fail to answer the fundamental question of why anyone would care about such things [public choice, transaction costs, contract failure, trust...]. I argue that selfish motives may be sufficient to explain the actions of all firms and governments...but not explain the creation of nonprofit enterprises. Everyone in the nonprofit sector does not have to be a saint in order for the sector to work, but at least a few people have to have cared 1 about others for the sector to exist.

Gassler points to the question of altruism or benevolence. The historical research quoted in part I shows that the starting point of philanthropy was the individual care for one’s neighbour. This was guaranteed by codes of the society, and individuals were socialised into the system. The codification was not in external laws: ”the word is very nigh unto thee, in thy mouth, and in thy heart, that thou mayest do it2.” When this face-to- face help was not possible any more, the nonprofits arose because the internal command did not change.

Gassler also points to another issue which he states as follows:

No longer it is a question of whether to leave things up to the market or decide for government to intervene. Instead, it is a matter best stated as, which sector - government, market, or third - is best able to satisfy individual preferences by 3 engaging in a given economic activity?

This is to be analysed in comparative international studies in the next chapter, where the results from

1 Gassler 1990,146. 2 Deuteronomy 30:14 (ASV) 3 Gassler 1990,144. 221 different countries show that in different cultures the models are different. It is the ‘religions of nationalism and capitalism’ that underline the preference of state and market. Further I would like to underline Gassler’s words ”best able to satisfy individual preferences.” These preferences deal a lot with the culture which the actors have adopted. For some people the state is the only possible actor because of their frame of democracy. Some people have the frame of efficiency to such an extent that it determines their commercial preference. Some people frame the world as a network of individuals and they see associations as just tools for people. I mean that while structures influence how something is organised, the leading individuals pave the way as well. Examples of the influence of one individual are Henri Dunant in the Battlefield of Solferino, Mother Theresa in the slums of Calcutta, Abbe Pierre amongst the outcasts of France, etc. It has been an individual activity that has drawn others along.

Jane Allyn Piliavin and Hong-Wen Charng reviewed in 1990 the research and theory on altruism. They stated that ”the data from sociology, economics, political science, and social psychology1 are all at least compatible with the position that altruism is part of human nature.” They divide altruism into two subcategories. The first is evolutionary altruism by which they mean behaviour that emphasises the consequences and that is many times spontaneous. The second is venacular altruism which deals with motives.2

The crucial question, that Piliavin and Charng made, is if altruism has a genetic component. The authors answer yes3, but point out that ”we would be more likely to help

1 The authors concentrate on social psychology and human development literature but refer also to biological, sociobiological and political reviews of altruism literature. 2 Piliavin & Charng Hong-Wen 1990,30f. 3 The authors rely, among other evidences, on studies of 1400 adult 222 others perceived as similar or those to whom we felt close kin-like ties1.” Paul G. Schervish and John J. Havens have criticised this personality approach by saying that it is based on an utilitarian paradigm. They state that

Once rational utilitarianism is accepted as the theoretical starting point, one is forced to choose between the ideal of pure selflessness and the reality of self-interest... Empirically, the respondents simply do not frame their motivations in terms of 2 altruism or self-interest.

Schervish and Havens propose, instead of selfish - selfless discussion, an identification model which they trace from the philosophy of Thomas Aquinas. For Aquinas love referred to one self is a prerequisite to the love referred to another. The lover identifies with the beloved.3 This point has its merits, but I do not see that it would rule out altruism. There are still cases that do not fit with identification. The old ethical code has been ”love your enemies, and pray for them that persecute you4.” Identification is surely one major component in altruism. However, identification requires imagination which is again a personality trait. Without imagination we cannot feel empathy5. When we feel empathy we are willing to serve with our talents.

Donald C. Story has developed the theory of altruism on the basis of Reinhold Niebuhr’s6 theology. Story quoting Niebuhr states that

”the self can only become its true self by continued tran- scendence over self. This self-transcendence... must be transmuted into indeterminate realizations of the self in the

twins. ”Heritability estimates of 56%, 68%, and 72% were obtained for three traits of altruism, empathy, and nurturance; for all three scales, about 50% of the variance was attributable to genetic effects.” Piliavin & Charng 1990,49. 1 Piliavin & Charng 1990,49. 2 Schervish & Havens 1997,238. See also Schervish 1992. 3 Aquinas 1929-1947, III Sent.d27, q. 1,ad 4. Cited in Gilleman 1959,126 and again in Schervish & Havens 1997,238. 4 Matthew 5:44 5 On imagination and responsibility see, e.g., Heinonen 1995. 6 Niebuhr 1964. 223

life of others.” ... It is this social side that spawns those human endeavors called altruistic-undertakings in which a person will be dedicated to other persons in a cause considered greater 1 than self and will even make personal sacrifices.

Thus, their view is that altruism is part of human nature because it is related to the need of human social contacts. The understanding is close to the Aristotelian concept of the good life2. A human is not a true human if he does not care for others.

However, when we look around us, we see that, although there exists altruism, the main motivation for human action seems to be selfishness. This theme leads us to the questions of human nature. Is a human basically good (as Humanism and Marxism see it) or disrupted (as Christianity and Judaism see it)? In secular terms, the latter means that a human is bound to his/her need satisfaction and every action fulfils some physical or emotional need. If we accept the view that a human is basically selfish, then a further question arises: is this disrupted being able to act unselfishly and do good? In religious terms this has traditionally been formulated with the concept of ‘fulfilling the law’ - either by himself or by the love of God. These basic questions lie behind the different explanations of altruistic behaviour.

When we look at empirical studies of altruism, donating and voluntarism we see the phenomenon that is expressed with words that are said to be from Cecil Rhodes: ”Philanthropy is fine but philanthropy plus 10% is better.” Below I evaluate the theories of donating and volunteering.

1 Story 1992,11; Niebuhr 1964,55f. 2 Aristotle 1908-52. 224

6.2. Donating

THE MOTIVATION TO DONATE is one of the basic questions that nonprofits face when they seek contributions. Economic theories hold that people rationally calculate their actions. From this premise also arise economic theories of donating and volunteering. According to rational choice theories there is basically no such thing as unselfishness, so there are always some selfish motives behind human action. For example, Burton Weisbrod underlines the influence of the marginal tax on both donations and volunteering. The thesis is that the higher the marginal tax is, the more willingly the individual gives donations because the price for him/her is lower than the actual amount of the donation. If, further, the donations are tax deductible, the ‘price’ of the donation is even smaller.1

However, the thesis of Weisbrod is contested with historical evidence. Hall notes that when the tax reduction laws came to the American legislation after the Great Depression the contributions to NPOs fell from the level that they had been before the tax reduction legislation. Another effect was that the motivation to donate changed. When companies had previously given because of the cause, they now give because they get tax reductions.2 Weisbrod may be right in stating that when such a mechanism exists, it effects the behaviour of donors. However, his thesis does not explain donating behaviour in contexts where there are no tax reductions.

In addition to giving money, there are other forms of donating as well. Such comprise reduction of prices, subsidised interest rates and possibilities to use the facilities or premises that the NPO does not own by itself. Basically these donations do not cost anything to

1 Weisbrod 1988,93f,138ff. 2 Hall 1987,15ff. 225 the donor. Thus, for nonprofits, they are easier to get than those that have to be paid with real money. One implication is that the outputs of the organisation reflect the sources of its revenues1. If the revenue is from individual donations, the patrons can influence how the organisation acts. For example, if a local YMCA can use some conference centre at a low price in low season, it is probable that the association modifies its plans of action in order to benefit from the offer2. If the revenue comes from public subsidies, the NPO becomes dependent on public decisions. This is the main reason why some organisations, like Amnesty International, refuse to take money from the state - Amnesty wants to be free to criticise any government if needed. If the revenue comes from sales proceedings, the NPO becomes like a for-profit enterprise and the activities that support themselves will dominate3.

TRUST is another major question in donating. Henry Hansmann’s nondistribution constraint has been used to explain donations as well as purchases. It means that in the case of donations, the donor, not the benefactor, has to trust that the organisation uses the donations in the intended way. Even if the donor has an altruistic motivation to donate, she/he wants to know if the contribution is used to benefit those to whom it is directed. Big individual donors, like governments and foundations, seek to have an easier access to this kind of information because there are certain reporting standards. Individual donors are in another situation. They do not know how the contribution is used. In some fund-raising campaigns the costs of the campaign (advertisements, provisions to assistants, materials) can cover the lion’s

1 Weisbrod 1988,89. 2 The motivation of the owner could be, for example, that the parents of the campers would bring their business seminars there and thus a youth camp serves as an advertisement. 3 A classical example is the study of Mayer N. Zald and Patricia Denton on the transformation of the US YMCA. Zald & Denton 1963. 226 share of the collected funds1. Additionally, there are some illegal campaigns that are masked to be philanthropy while being, in fact, individual business2. Even if the money is going to the right association, there may be no guarantee if the donation has an earmark that it will be used for the intended purpose and not for the general administration costs of the organisation.

However, Richard Steinberg argues that Hansmann’s non- distribution constraint does not explain donations of time. The trustworthiness argument is of no value because the volunteer knows where his/her donation is used. Steinberg also argues that monetary contributions are a more effective way to donate than giving time to an NPO. This is because the effectivity of volunteers is not as high as professionals3. Thus, there must be some other reasons to give work as a donation. Steinberg argues that ”income after-tax wage rate and the tax price of monetary contributions affect the propensity to volunteer and the average number of hours volunteered.”4

This leads us to the second main form of donations, namely donations of time and labour force. However, before entering into the motivations of volunteers, it is necessary to focus on the concept of volunteering: who is a volunteer?

1 In Finland the fund raising costs of the 40 biggest campaigns in 1998 were from 0,6% to 100%. The average amount of the costs of an individual campaign was 24%. However, the successful campaigns were so big that the cost percentage of the all collected money (222 Million FIM = 38 Million Euro) was 14. Rahankeräys- ja tavara- arpajaislautakunta 1999. 2 In Finland the most famous case has been a campaign in which three men sold goods for the rehabilitation of Winter War veterans during 1996-1997. The crime was that they gave the impression that they were running a fund-raising campaign instead of doing business. They collected 7 Million FIM (= 1,2 Million Euro) of which they gave to the veterans’ associations only 380 000 FIM. Ojansivu 1999. 3 I have to note that this is surely not the case in Nordic countries, where the tax rates are extremely high and progression steep. In Nordic countries a major share of the extra earnings go to taxes. 4 Steinberg 1990,156,157. See also Smith D.H. 1997,124f. 227

6.3. Definitions of Voluntarism

VOLUNTEER is a concept that was first used in description of a religious life long commitment to serve the church. It was linked to military service at least as early as in the time of Crusades1. From those usages it has shifted to altruistic public service2. However, the definitions of volunteering are not unanimous. Steinberg notes that the difference is whether and how informal volunteering (helping neighbours and friends) is counted or not. The definition of the value of voluntary work is unclear as well. Steinberg argues that there must be a separation of ”the opportunity cost of donor time, the value of voluntary production to the firm, [and] the social welfare value (which incorporates both concepts).” Additionally, the productivity of voluntary work is hard to measure because ”on the one hand, voluntary workers may be harder to organize and discipline. On the other hand, volunteers may be more dedicated to the organization’s cause.”3

These questions have been studied by Ram A. Cnaan, Femida Handy and Margaret Wadsworth in 1996. They found that in third sector literature there are 11 widely used definitions of volunteers. When they synthesised these definitions they found out three significant issues. First, authors state that ”none of these definitions succeeds completely in distinguishing between who is a volunteer and who is not.” Second, they note ”in the more than 300 articles and reports that we reviewed, the term volunteer was seldom defined.” Mainly it was taken for granted.4

The third finding of Cnaan, Handy and Wadsworth was

1 Karl 1984,497f. 2 Cnaan, Handy F. & Wadsworth 1996,366. 3 Steinberg 1990,164ff. 4 Cnaan, Handy F. & Wadsworth 1996,366-369. 228 that these eleven definitions have four key dimensions in common. In all these dimensions the definitions go from ‘pure’ to ‘broadly defined’ so that broad definitions also include pure ones according to the Guttman scale1. The first dimension concerns the nature of the act: what does it mean that something is done voluntarily? Here the authors found three traditions: Free will, relatively uncoerced2 and obligation3 to volunteer.4

The second dimension concerns remuneration. According to the purest criterion ”there should be reward or even interest in the specific subject matter of the volunteering activity.” According to moderate definitions the expenses can be covered, and according to the broadest ones there can be some kind of stipend or low pay.5

In the first case, even the expenses should be paid by the volunteer and there should be no immaterial compensations. An immaterial compensation is, for example, when a lawyer gives free advice to a club of older people. If someone then really needs lawyer’s services, the voluntary work has served as an advertisement. In the case of the broadest definition, the criterion is whether the payment exceeds the amount of money she/he would get if she/he would work that amount of time. In that case the payment can be seen as a compensation of lost work time. Additionally, there are non-monetary compensations, like training, free lunches, new personal networks, new experiences, reputation, etc. that are rewarding. However, even the strictest criteria do not exclude personal satisfaction as a reward.

1 Guttman 1944. 2 For example, when somebody has to do something that is related to her/his job or related to her/his position in the group or society. In such cases there exists a social pressure to volunteer. 3 For example, when someone works in a nonprofit library because a court has ordered to do it as a part of a community service. In that case the free choice is between voluntary work and prison. 4 Cnaan, Handy F. & Wadsworth 1996,369,371. 5 Cnaan, Handy F. & Wadsworth 1996,370f. 229

Third dimension of voluntarism definitions is context. Basically the distinction is between formal and informal volunteering. The strict definition excludes all informal help to friends, neighbours and relatives. According to this criterion only work in a formal organisation can be counted as voluntarism.1

Related to the previous dimension, Cnaan, Handy and Wadsworth also note that the reward in different kinds of voluntary tasks differ a lot even if the cost (time) is the same. Thus, a doctor volunteering ”at a soup kitchen, local clinic or his or her favourite symphony orchestra” will get different kinds of rewards. Contacts that she/he makes at the concert may bring more rich patients than contacts with the homeless at the soup kitchen.2

One problem of this dimension is that the concept of formal organisation is unclear as well. In some countries associations need no formal registration and in others there are strict requirements that an organisation must fulfil in order to have a status of an association. Moreover, even if the work for the family, friends and neighbours is excluded there remains the question of social movements. Many social movements are ad hoc processes that, at least in the beginning, do not have formal organisations. There is a danger that the voluntary work in them is excluded because of the definition.

David Horton Smith has made a definition that includes ”not only participation in voluntary associations but also volunteer work for nonprofit programs and organizations.” Together they are volunteer participation. Voluntary action (VA), in turn, includes ”VAP (individual voluntary association participation) and FVG (a formal voluntary group, association, or organisation) 3.” The difference

1 Cnaan, Handy F. & Wadsworth 1996,370f. 2 Cnaan, Handy F. & Wadsworth 1996,374f. 3 Smith D.H. 1975,248. 230 between voluntary work and work in associations is that the previous ”is generally public benefit activity, while association participation can be either public benefit or member benefit activity.”1

The final dimension of voluntarism, that Cnaan, Handy and Wadsworth represent, concerns the benefactors. Here again, the purest criterion excludes friends and relatives and urges that the work must be done for strangers. A moderate criterion accepts friends and relatives and the broadest definition also includes oneself, in the list of benefactors.2

The first problem concerning benefactors is how to define the one who benefits. In the case of environmental organisations or community service organisations one can see that the work in them benefits, after all, everyone. However, the definitions have not dealt with the issue in this sense. Instead, they have concentrated on immediate benefactors. As Cnaan, Handy and Wadsworth noted above, the first boarder has normally been between strangers and one’s own reference group (ethnicity, religion, gender, residency). According to the purest definitions the work that benefits only ones own group is not volunteering. The broadest definitions also include the voluntary work in self-help groups as volunteering.

DEFINING VOLUNTARY ORGANISATION is the second question that arises from the definition problems of ‘who is a volunteer?’ David Horton Smith proposes counting the work hours of volunteers and comparing that to the working hours of paid staff. If there is more voluntary work than paid work, then an organisation is a voluntary organisation3. However, in federations this distinction can be problematic. Should we count the whole amount of

1 Smith D.H. 1994,244. 2 Cnaan, Handy F. & Wadsworth 1996,370f. 3 Smith D.H. 1995a,100. 231 the work at all levels or should we take each single association as a separate case? In the case of the YMCA the former is practically an impossible task because of the size of the organisation (30 million members). In the latter case it could appear that one branch is a voluntary association and a neighbour association is not; or that the local associations are voluntary associations but the alliances are not.

Lucas C.P.M. Meijs has made a distinction between volunteer-governed, volunteer-supported and volunteer-run organisations. The first one refers to organisations ”in which the goals and policies are formatted by volunteers in the board of the organisations.” Thus, these decisions can be implemented by professionals. The second one refers to organisations in which ”primary activities are done by paid personnel” and ”volunteers perform only (valuable) support roles.” In the last case ”policies and goals are prepared, set and implemented by volunteers who also perform the primary activities.”1

Meijs’ distinction lead us to focus on the roles of the volunteers in the organisations, not only the number of them. However, there is one problem with the definition of the volunteer-governed organisations. Meijs’ definition would, in some cases, cover parishes and municipalities as well. If the members of councils (and boards) receive only a low pay or no pay at all they may be defined as volunteers. This would, in turn, make these public organisations voluntary organisations.

IN SUMMARY, definitions of voluntarism and voluntary organisations are highly multivariate. There are strict purist definitions that reflect the classical philanthropical or diaconal service for the others. Cnaan, Handy and Wadsworth note that

1 Meijs 1997,228. 232

in modern and biblical Hebrew, the term volunteer is derived from a word meaning ‘to willingly give,’ which may also be interpreted as ‘a charitable donation.’ This linguistic note is important because it implies that people were expected to be altruistic and that the giving of one’s wealth was the highest form of 1 altruism.

These strict criteria exclude so much of the phenomenon that broader definitions of voluntarism are needed. Whatever definition is chosen, it is important to acknowledge the implications of the decision on the research. These questions of definitions also make it difficult to compare different studies because they use different standards for inclusion and exclusion. What is needed, is a study in which the different definitions are recognised and the data has been arranged according to the Guttman scale like Cnaan, Handy and Wadsworth arranged the criteria.

6.4. Motivations for Volunteering

If the definitions of voluntarism are multivariate, so are the motivations of volunteers. David Horton Smith has dealt with the theme in his dissertation in 19662 and in reviews of studies focusing in volunteer participation in 1975 and in 1994. In his dissertation Smith used three sets of variables: personality traits, attitudes toward formal organisations in general and attitudes toward special formal voluntary organisations3. He argues that they function differently:

For the discrimination of members from non-members, the specific and general FVO-relevant attitudes should be given most weight, while for the discrimination of active from inactive FVO members, 4 the personality variables should be given most weight.

1 Cnaan, Handy F. & Wadsworth 1996,370f. 2 In this study I refer to his article that is, as Smith says ”a condensed version of parts of my Ph.D. dissertation.” Smith 1966,249. 3 Smith D.H. 1966,250f. 4 Smith D.H. 1966,259. 233

Smith also adds a fourth variable, namely social background characteristics, and argues that the process is similar to friendship choice and mate selection. In this basis he develops his own Smith model of voluntary participation:

First, proximity and lines of communication together with social background characteristics filter out from the general population the "effective eligibles" for the FVO or FVO's; then, general and specific FVO-relevant attitudes, values, and interests come into play and filter out members from non-members within the set of effective eligibles. Finally, with the increasing interaction of members within the FVO, personality variables come into play and filter out from the other members the highly active participators - those who really feel at home and who personally fit with the 1 organization's programs and people.

In his 1975 review Smith makes some general observations of voluntary action studies. First, he notes that ”for customary and basically non-theoretically justifiable reasons, church participation is usually omitted from consideration, arguing that membership is ascriptive and involuntary.” However, Smith argues that ”this is only true for the very young.” For him ”religious organisations are clearly FVGs.” At this point Smith again notes the difference between church membership and church participation: the reported membership is normally higher than participation in ceremonies. Applying his thesis above, on could suppose that if participation rates are lower than membership reporting, voluntarism rates are lower than passive participation rates.2

A similar exlusion from voluntary action studies, as in the case of church participation, is seen in the case of industrial labour unions. As in the case of church membership Smith criticises this exclusion to be non- theoretical. In neither forms of organisations, membership or voluntary action are basically compulsory. As a result, this exclusion of union membership from national sample surveys in industrial societies ”show an average of 10%

1 Smith D.H. 1966,261f. 2 Smith D.H. 1975,249. 234 lower rates of VAP than when unions are included.”1

In his 1994 review Smith notes that there are six sets of variables that determine the decision to volunteer: contextual variables, social background variables, personality variables, attitudinal variables, situational variables and social participation variables.2

THE CONTEXTUAL VARIABLE has, according to Smith’s 1994 review, two subcategories: territory and organisation. In the case of the territorial variable, Smith notes that several studies show that voluntarism is more usual in small, rural communities than in large, urban towns. Smith states that ”these kind of studies speak of the importance of community characteristics in volunteer participation.” The organisational variable shows that organisations (companies, universities, etc.) that have some kind of philanthropic subculture ‘give’ more volunteers than those that do not encourage voluntarism. On the other hand, there are differences between community self-help organisations and more bureaucratic voluntary organisations in terms of outputs, ideology, linkages, recruitment, etc.3

According to Smith’s earlier review in 1975, a third subcategory could be added, namely that of possibility to participate. Thus, among married women with children the VAP is greater in winter than in summer. Similarly, among older people those who have access to personal

1 Smith D.H. 1975,249f. 2 Smith D.H. 1994. E. Gil Clary, Mark Snyder and Arthur A. Stukas give a slightly different list of variables. They divide motivations into six functions: 1. Values function is an expression of the ”values important to the self”; 2. Understanding function focuses on the knowledge of the world and to the opportunity to ”develope and practice skills that might otherwise go unpracticed”; 3. Enhancement function serves an individual’s psychological development; 4. Career function serves as training to paid job; 5. Social function satisfies the need to get along with people; 6. Protective function affords some protection from inner anxieties. Clary & Snyder & Stukas 1996,487. 3 Smith D.H. 1994,245f; see also Smith D.H. 1975,259. 235 transportation participate more than those who do not have such possibilities.1

SOCIAL BACKGROUND VARIABLES include such variables as social status, gender, sex, marriage, employment and children. The dominant status model of Mona Lemon, Bartolomeo J. Palisi and Perry E. Jacobson Jr.2 states that ”participation is generally greater for individuals who are characterized by a more dominant [sociocultural system-valued/preferred] set of social positions and roles, both ascribed and achieved.” Some of the variables are supported by the studies Smith reviews. These include age (volunteer participation peaks in the middle age), education, high income, marriage, full-time-employment, and school age children. However the model does not fit into the multivariety analyses of minority groups or gender issues. While bivariate analyses show that male and white Americans are more active in voluntary associations, multivariate results show that Afro-Americans volunteer more3 than whites and that the difference between sexes vanishes.4

Richard A. Sundeen and Sally A. Raskoff argue that ”the theory of volunteering must be distinguished between adult and teenage volunteering.” Although there are similarities, ”the significant role of the family, church, and school experiences... in contributing to volunteer behaviour by teenagers distinguishes them from adults.”5

PERSONALITY VARIABLES are mainly studied by psychologists in relation to volunteer participation. In

1 Smith D.H. 1975,259. 2 Lemon & Palisi & Jacobson 1972. 3 Jean Kantambu Latting has also reported this and links it to the group consciousness of blacks. However, he notes that ”whether such group consciousness stems from a common cultural heritage or a reaction to historical discrimination as a minority group in a majority society is a subject of debate.” Latting 1990,131. 4 Smith D.H. 1975,254; 1994,246-250,254. 5 Sundeen & Raskoff 1994,400. 236

Smith’s dissertation the variables that correlated positively with membership were autonomy, trust, moralism and efficacy in public affairs. However, in the case of active participation he found positive correlations with trust, willigness to meet new people, lack of cynicism, achievement orientation, belief in efficacy in public affairs, planning orientation, and optimism1.

In 1975 Smith argud that ”most of the results of these studies tend to be consistent with the psychological model of individual VAP suggested by Smith (1966).” However, he also noted that ”the principal exception in the foregoing studies is that the internal/external control factor seems to have two separable components that operate differently for conventional vs protest forms of VAP.”2

In 1994 Smith noted that ”personal capacities do not seem to be included in the volunteer participation literature under review.” The only study he refers to is Natalie J. Allen and J. Philippe Rushton’s3 review. ”They found much consensus in their results that volunteer participation was higher for individuals with more efficacy (internal locus of control), empathy, morality, emotional stability and self-esteem or ego strength - all indicators of a social orientation.”4

ATTITUDINAL VARIABLES were, according to Smith in 1994, studied more than any other variable during his review period. Among the themes that have been studied are, attitudes to the possible rewards or gained skills, altruism and moral obligation, identification to the group or group’s purpose, attitudes to the leader, political discontent and values5

1 Smith D.H. 1975,258. 2 Smith D.H. 1975,256. 3 Allen & Rushton 1983. 4 Smith D.H. 1994,250f. 5 Smith D.H. 1994,251f. 237

However, there are some differences concerning the type of organisation in which someone participates. Thus, according Smith’s 1975 review, greater village and community identification is associated with VAP in rural communities; ”lower Srole anomie scores to predict higher VAP among middle-class, midwestern urban women”; authoritarianism, alienation and anomie are determinants of sectarian churches; political attitudes, foreign-policy attitudes, meaninglessness, normlessness, isolation and perception of social explanation for problems describe the members of peace groups; sociopolitical radicalism, lack of acquiescent-traditionalism, intellectualism and political activity interest charactise Latin American student’s involvement in voluntary action; and teenage ethnocentrism, restrictivemess, rejection of older people, Srole’s anomie and self-esteem were variables that describe youth groups in London. These different results show, as Smith states, ”why individuals with certain kinds of attitudes are more likely to be found in some corresponding kinds of VAP rather than others.” Smith argues that these findings ”can be readily absorbed by the Smith model.”1

The empirical results in the studies that Smith reviewed in 1994 show that

the most important attitudinal predictors seem to be perceived effectiveness of the group, perceived benefits relative to costs, 2 altruistic attitudes, civic duty, and political efficacy .

SITUATIONAL VARIABLES contain, according to Smith, issues of invitation or encouragement to participate, service receiving and friends in organisation. They have all to do with ”symbolic interaction between one individual and others.” The last, social participation variable, is also closely connected to these items. ”Volunteer participation is associated significantly with

1 Smith D.H. 1975,257f. 2 Smith D.H. 1994,252. 238 other forms of socioculturally approved uses of discretionary time.” The general activity model of Smith and Jaqueline Macaulay1 states that the participation is cumulative. In other words: ”the more one participates in one kind of... activity, the more one will tend to participate in other kinds of such activity.”2

RELIGIOSITY is one discussed item that has been linked to volunteerism. In the US the percentage of churches and church-based institutions is approximately 66% of all contributions and 34% of voluntary labour3. In fact, the whole concept of philanthropy in Western history has been religious activity. From these starting points one would expect high correlation between religiosity and voluntarism. However, the findings do not support this in all cases. While some researches have found strong correlation, the others find almost no connection4.

John Wilson and Thomas Janoski offer one solution to this dilemma. They note that ”not all religious bodies emphasize volunteering to the same degree.” Conservative Protestants especially interpret biblical stewardship and charity in spiritual terms. Their volunteering would be in the fields of evangelism and stewardship that is inside the church5. Wilson and Janoski call this other-wordly emphasis. On the other hand, the liberal congregations are much more involved in social activity than evangelicals which authors call this-wordly emphasis. However, the authors found that not only the denominational differences effect the different volunteering but also effect the location of the congregation, participation in a church group (not only to service) and life-course stages of

1 Smith D.H. & Macaulay 1980. 2 Smith D.H. 1994,252f,255. 3 Cnaan & Kasternakis & Wineburg 1993,33. 4 Cnaan & Kasternakis & Wineburg 1993,37f,43ff. 5 Examples of the stewardship could be serving as leaders of Sunday Schools or other groups, singing in the choir, arranging bazaars, playing instruments in the service, etc. 239 parishioners1. All of this emphasises that the crucial point is the type of religiosity - not the religiosity per se. Elton F. Jackson, Mark D. Bachmeier, James R. Wood and Elizabeth A. Craft, in turn, found that participation in a church group also increased secular helping while no net effect of just church attendance was found2.

Hannu Sorri has studied the volunteers in the Finnish Telephone Emergency Service. Although the service is part of the official organisation of the Evangelical Lutheran Church, it is based on voluntary labour. Sorri found similar kinds of motivations as presented above but also dealt briefly with the lay theology behind the motivations. In the stories of volunteers he found two kinds of theology. The first one emphasised Christian charity and voluntarism was one way to implement it. The other one underlined God’s guidance. According to this theology being a volunteer was seen as fulfilment of God’s secret plan in the life of the individual.3

One problem in the sociological study of voluntarism and religion lies in the gap between sociology and theology4. If a sociologist has not enough knowledge of the doctrines, liturgies, other religious activities, habits and other dimensions of religiosity, there is a danger to see religions as a homogenous entity. However, religions differ a lot from each other and even Christian churches have different ethical emphases. During this study it has been seen that religious organisations can be found in the background of the majority of the nonprofits. Economists and social scientists note this, but from then on, the majority of them lack the tools for deeper studies. Unfortunately, theologians have ‘shined with their absence’ from the field of third sector studies. To

1 Wilson & Janoski 1995. 2 Jackson & al. 1995,74. 3 Sorri 1998,72f. 4 Cnaan & Kasternakis & Wineburg 1993,34,49. See also Gill 1977; Martin & Mills & Pickering (eds.) 1980. 240 correct this, we would need again people like Weber who was talented in economics, sociology and theology.

SELF-REGARDING MOTIVATIONS for volunteering are as important as altruistic motivations. Sorri reports that the volunteers in the Telephone Emergency Service also expressed selfish motivations like interest in people, training and experience, desire for a new content of life1. In a similar way E. Gil Clary, Mark Snyder and Arthur A. Stukas reported in 1996 the findings of the US national survey of volunteers’ motivations. They noted that ”volunteering consists of several actions and decisions about actions (volunteering in one specific time period..., volunteering over time..., and type of activity in which to engage)2.” Additional to altruism, the authors list volunteer’s motivations like ”opportunity to increase their knowledge”, ”psychological development”, ”experience”, participating in a social group and coping ”with inner anxieties and conflicts.” All these have different motivational and demographic backgrounds. The motivations are overlapping and may change during the time used in volunteering3.

Robert A. Stebbins argues that along altruistic volunteering there is a type that he calls serious leisure. He defines it as follows:

Serious leisure is the systematic pursuit of an amateur, a hobbyist, or a volunteer activity sufficiently substantial and interesting in nature for the participant to find a career there in the acquisition and expression of a combination of its special 4 skills, knowledge, and experience.

Stebbins makes three statements on serious leisure. First, that ”self-interestedness is a cardinal feature of all serious leisure.” Second, it is ”career volunteering.” Third, ”careers and self-interestedness in volunteering

1 Sorri 1998,42-68. 2 Clary & Snyder & Stukas 1996,501. 3 Clary & Snyder & Stukas 1996,487,502f. 4 Stebbins 1996,215. 241 are inspired for a good part by a person’s experiences with the special rewards found in all types of serious leisure.” These rewards include both personal (personal enrichment, self-actualisation, self-expression, self- image, self-gratification, recreation and financial return) and social (social attraction, group accomplishment) rewards.1

VOLUNTEERING, in general, can be modelled, according to Jackson and others, with the Schwartz-Howard Model of the Helping Decision. This model has several steps that an individual has to pass through in order to make a decision to help. The first step is attention which again has three steps: awareness of needs, realisation that certain actions can help and the conclusion that an individual is able to do it. The second stage is the motivation which is based on nonmoral (time, costs, danger, etc.), moral (individual values) and social (approval of others) costs and benefits. The third stage is the evaluation of the various costs and benefits. If the balance is not clear, the cycle begins again.2

Although the model is perhaps too cognitively oriented (in many cases the decision is made unconsciously), it is one way to combine situational and motivational variables together.

6.5. Evaluation and Discussion on Voluntarism Theories

THE DEFINITION of the third sector in these theories is centred around voluntarism. Economic theories approached voluntarism as one way of donating and emphasising economical calculations in decisions to volunteer. Sociological theories focus on other

1 Stebbins 1996,215ff. 2 Jackson & al 1995,70ff. 242 motivations. The picture of a volunteer seems to be more complex than in economic theories and there are numerous reasons why somebody volunteers. However, volunteering is one large phenomenon in our societies that has been ignored in other fields of social sciences.

The main research question of part II is: ”How is the third sector constructed in different third sector research traditions?” As in the case of political and sociological theories, the voluntarism theories do not offer a clear answer. As the concept volunteer indicates, the focus has been on voluntarism and from this point of view, the third sector is the largest context in which to volunteer. However, voluntarism theories do not exclude voluntary phenomena that occur in the public or market sector. Thus, the trichotomy is not state, market and the nonprofit sector but compulsory, profitable and voluntary.

Voluntarism theories show that the third sector is seen differently from macro theories. Third sector organisations are a part of the life world of individuals. These organisations are a channel that offer possibilities to express one’s personal needs and commitments. Some theories hold that the motivations are based on opportunism and rational choice of the actors. According to these theories, there is no basic difference between sectors: the crucial issue is that an individual is seeking something (practice, training, etc.). Other theories have challenged the rational approach and noted that a great proportion of voluntarism takes place in religious organisations. At least in these cases, third sector organisations are most suitable contexts in which to implement an individual’s inner vocation.

THE RESPONSIBILITIES between the sectors are not presented clearly in voluntarism theories. Voluntarism can happen in all three sectors but its main field is the third sector. The main motivations for donating money or 243 time are both selfish and unselfish. Theories that emphasise selfish motives note that the individual has not been able to find a job or training from the market or state sectors and thus volunteers. However, this does not fit as well with the donation of money. In those cases the revenues are mere social status issues. Unselfish motivations point out that a volunteer wants to serve her/his community. In this respect, it is not so important whether this happens in a public organisation or in a third sector organisation.

THE TYPE of the voluntarism studies that I presented above is mainly a review that covers studies from several disciplines. While these studies approach the theme from their own disciplinary bases they also interact in a way that the theses are reflected in an interdisciplinary context. It can be noted that voluntarism studies form their own micro level research tradition inside third sector studies.

THE RANGE of the theories remain mainly on the micro level. Different from the economic theories, they do no try to derive macro level phenomena from the micro level phenomena. The only exceptions could be theories of altruism that try to deal with the phenomenon. Even in that case there is no direct explanation that links altruistic phenomena to the scale of the third sector. This does not mean that scholars do not recognise the effects. Rather, it means that they limit their interest to the micro level.

IN THE CASE OF INGOs, voluntarism theories do not have the same significance as in the case of local and national organisations. This is because on the international level the work is more professionalised than in the local level. However, there exists voluntarism in international organisations as well. First, INGOs have local projects that are sometimes run by volunteers. For example, the 244

Refugee work of the World Alliance of YMCAs has been based on voluntarism. However, in these cases there is not always any clear distinction between local and international activities because the projects often are joint ventures.

Second, INGOs have various boards and committees that are one form of voluntary labour. If a member does not belong to the staff of a local or a national member organisation, often only the travel costs are covered by the INGO - sometimes even these are covered by the volunteer. The motivations of board and committee members are supposedly similar to the volunteer motivations that were described above.

However, there are some special forms of voluntarism that the theories above did not mention. They are linked with the findings of the institutional theory and sociocultural determinants. The first one occurs in situations where the reference group of an individual urges somebody to take a post that she/he is not so willing to take. In these cases the group has the motivation and the individual’s motivation derives from the social norm. The second one is also a position of trust. Because INGOs never have much extra money, they try to save whenever it is possible. One way is to recruit volunteers from the staffs of IGOs and Church Federations. These kinds of volunteers can do their volunteering simultaneously with their own work and thus cover the costs from their own organisation. For example, when an employee of an IGO has to visit some distant country, she/he may arrange the timetable in a way that there is also time to visit the national or local project or group of the organisation in which she/he is volunteering. In this way, the organisation has no need to send its own staff person on that journey1. A variant of this is the

1 A good example is from the time of the First World War when Dr. Paul de Gouttes was both president of the World Alliance of YMCAs and 245 practice of nominating IGO people as representatives of INGOs to such organs that are located near the places where volunteers work. In both cases the professional level of the volunteer is required to be high.

Donations and volunteering seem to go hand in hand. The literature stresses the net influence that taxes have on both cash donations and to volunteering. This seems to have a reason. It is always easier to give if it does not cost much to the donor. However, history does not support this thesis unanimously. When the tax exemptions of donations were launched in the USA for the first time after the Great Depression, the amount of donations actually fell1. Hall’s note reminds that donating is not only a question of economical calculation but there are other aspects as well.

NOW IT IS TIME TO GIVE A PARTIAL ANSWER to the main research question of this study: ”Why are third sector theories important?” What the voluntarism theories have shown is that volunteering is a powerful force in our societies. People are not only longing for panem et circences but they want to do something useful for their neighbours. Questions of altruism and love (or their absence) are important parts of an individual’s life worlds. In these worlds the social constructions of reality are made and thus it is important to know what kinds of phenomena influence to these constructions.

An important aspect in voluntarism theories is that they, again, point to the importance of an individual. Although we can say that different structures guide the actions of individuals, structures do not act - individuals do. Thus, voluntarism studies note that there is still one level that DiMaggio and Anheier do not mention when they state the three levels of analysis:

secretary of the International Red Cross. Strong 1953,28. 1 Hall 1987,15ff. 246 organisation level, sector level and society level. The remaining level is the micro level: without individuals there are no organisations.

Most of the studies evaluated in this study so far are based on American concepts and they have mostly been conducted in an American context. However, there are similar phenomena in other parts of the world as well, and these phenomena have been explained with concepts and theories that differ from American models. Next, I introduce the results of the interaction between scholars from different countries.

247

7. Comparative International Studies of the Third Sector

7.1. Need for the Comparative Studies

The need for comparative analysis of nonprofit organisations emerged in the beginning of the 1980s when the scholars became aware that the American definitions did not fit with all countries in the world. The terminology, legal systems, history, culture and many other issues made the whole research field a great patchwork quilt in which all the components were more or less different.

The European research arose, according to Anheier and Seibel, from the crisis of the welfare state at the end of the 1970s. The tax system was felt to be restrictive and there was a general need for decentralisation. In that situation, there emerged a need to review the relations between public and private services. In England there was a trend to transform the public sector to private; in France the ‘association’ movement was widely discussed; and in Germany the role of the welfare organisations, foundations, and self-help organisations was under consideration.1

The change in atmosphere or zeitgeist in Europe was remarkable. According to Marilyn Taylor, this was very much due to Margaret Thatcher and her policy2. In her time there was a remarkable shift towards the political right in the whole of Western Europe. However, sociologists, among whom there seems to be a leftist overrepresentation, did not accept as eagerly the new conservative message. They saw the third sector to serve as a conservative tool for upper class purposes. Charitable organisations were

1 Anheier & Seibel 1990,1. 2 Taylor 1992,151-155. 248 seen as an ‘armed daughter of the church.’1 Sociologists in Europe seemed to live in the time before the 1970s when the third sector services were transformed to municipal services2. In this we can see the same tendency as in European social movement studies. The grand project of the Labour Movement was the welfare state; and when social sciences had strong links to the political left, the focus of studies was on the issues important to the Labour Movement.

In most Western European countries the third sector was studied before the 1990s according to the national style approach. It held the idea that each country had such different traditions that the third sector in the country can not be understood without its national policy style. Hood and Schuppert note that

in many Western European countries it was commonly... thought... that that country was unique in the extent to which public business is carried out by organizations other than core public 3 bureaucracy .

There is a vast amount of literature on co-operatives, associations, and firms providing public services, but they have remained on a national level and have often been studies of individual organisations or fields instead of studies of the phenomenon4. Even if the national style approach explains the phenomenon in some particular country, it has some limitations. It neither explains the phenomenon of international megatrends5 (or zeitgeist) nor

1 Seibel & Anheier 1990,8. 2 The neglect of the third sector in general sociology has been so wide that, for example, The Blackwell Dictionary of Twentieth-Century Social Thought from 1992 does not include it in the articles or even in the index. 3 Hood & Schuppert 1990,96. 4 Many times studies are histories of organisations or fields and have the tune ‘hey, hey, we are good!’ Many organisation histories have the problem that the organisational interests determine the research. On the other hand, if the books are intended to be textbooks, their intention is to socialise the students in the profession. 5 Concept from Naisbitt and Aburdence 1982. 249

International NGOs.1

Although the terms used for third sector entities identify the core actors, they still have different connotations. For example in Germany, the distinction is not so much for-profit versus nonprofit but commercial versus non-commercial. These differences have supposedly influenced the national statistics.

Additionally only in a few national statistics is the nonprofit sector treated as an independent entity, and even in those cases it is not in the same detail as the for-profit and the public sector2. In the field of statistics there is a stress on making data internationally comparable. When an exact third sector definition was lacking, the sector was doomed to be excluded from statistics. Another impact of the heterogeneity was that in some countries the research focused on some particular types of organisations (for example, co-operatives and public service enterprises) instead of the whole sector3.

7.2. Early Research of Comparative Studies

The Program on Nonprofit Organisations (PONPO) of Yale University has been effective also in the field of international comparisons4. The project trained scholars and published volumes. Among others there were two scholars that lead the way in international comparisons, namely Estelle James and Helmut Anheier.

1 Hood & Schuppert 1990,96. 2 James 1987,398ff. Seibel & Anheier 1990,10. Salamon and Anheier propose a research strategy according to which a scholar tries to create comparable data on the basis of existing employment surveys and data of various income sources (Salamon & Anheier 1993,544-551). 3 Seibel & Anheier 1990,11. 4 Here it is important to remind that international comparative studies means comparisons of national studies, not studies on international organisations. 250

7.2.1. Religious Heterogeneity and Differentiated Demand

ESTELLE JAMES was one of the first to present comparative theories of NPOs. She studied educational arrangements in various countries and developed her theory in numerous articles1. James noted that the economic theories presupposed the competition between FPOs and NPOs. However, in many countries the competition is between the government and NPOs. On the other hand, the government is a major source of subsidies for NPOs. Additionally, the size of the NPS varies remarkably from country to country or even from area to area. To interpret these phenomena, James improved the heterogeneity theory of Burton Weisbrod.2

THE HETEROGENEITY THEORY states that the government aims to satisfy the needs of the medium voter and those who want some extra have to find it from other sources, i.e. either from FPOs or NPOs. Behind this there are two mechanisms that James calls excess demand and differentiated demand. Excess demand refers to those public services that people want but do not get because of the scarcity of the supply. James states it as follows:

The greater the total effective demand for education and the smaller the capacity of the public sector, the larger will be the 3 excess demand for private education, ceteris paribus.

With the concept of excess demand James explains why the private sector has increased in some Third World countries ”where the public sector is considered superior4.” The reason behind this paradox is that the governments in the Third World do not have enough capacity to cover the demand.

1 Some summaries can be found in articles from 1987 (James 1987) and from 1993 (James 1993). A list of her early works in the 1980s can be found in James 1989c,56n1. 2 James 1989a,4f. 3 James 1993,575; 1987,401f. 4 James 1993,574. 251

However, excess demand does not explain the existence of the third sector in all cases. Some people would like to have different kinds of services or different quality of services than what governments supply. Although the high quality need explains the existence of elite private schools, they are still small in number. Additionally, the ”average quality in the private sector cannot be generally considered higher than in the public sector.” Thus, the explanation for a large private education industry is not the high quality but the difference of the service.1

James argues further and notes that there must be certain conditions in which the heterogeneity will create the need for NPOs. If these needs are not met, the private sector would be small. She states that

In societies where cultural groups are concentrated in different geographic areas (as in Switzerland), local government production achieves desired diversity. In nations where a dominant group seeks to impose its language or values on others, private schools 2 may be prohibited or restricted.

Additionally, if the taxing homogenises the income and there is political equality, the need for alternative services is small. Other variations that James mentions depend on the relationship of dominant groups and the upper class with political power. If the political power is concentrated in the hands of the economic elite, public services are modified to serve the elite and NPOs would serve the lower classes. On the other hand, if the economic elite are excluded from political power, the third sector tends to become elitist.3

From these starting points James’ basic thesis is that ”the more heterogeneous the society, the larger we would expect the private sector to be”4. The logic of this is that different ethnic, linguistic and religious groups

1 James 1993,576; 1987,402f. 2 James 1987,403. 3 James 1989c,33ff. 4 James 1982, 1984, 1986, 1987, 1989c. 252 need special services that the government does not give to them. In turn, minorities form their own organisations to provide the needed services. James stresses the religious or ideological character of the nonprofit organisations:

It is important to note that service-providing nonprofits are typically started not by individual entrepreneurs, but by 1 religious or other ideologically motivated organizations.

James goes further and introduces NPOs as interest- based communities that are a choice for geographically based governmental organisations. She also states that the aim of the religiously based NPOs is not to maximise profits but maximise faith2 or adherents. According to James, NPO is a tool for something else than economical activity. This attitude also enables the ‘parent’ body to give subsidies in order to give the venture capital or to keep the products cheap. James thus expects ”NPOs to be concentrated in geographic areas with strong independent religious groups... competing for clients, currently or in the recent past.” 3

THE ROLE OF THE NPOs is another theme that James discusses. After introducing the theory of the emergence of NPOs, James underlines that ”once nonprofit organizations have been started, funding for their activities comes heavily from the government.” She notes that while the funding responsibility lies often on government resources, the production of goods or services lies often on NPOs’ responsibility. This leads to a fundamental question: ”in what situations will the government delegate production responsibility for quasi- public goods?” There are arguments of lower cost, lobbying of minorities, illusion of doing something, and the advocacy role of NPOs. However, ”once the decision is made

1 James 1990, 23. 2 In religious words: ”But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.” (Matthew 6:33 AV) 3 James 1987,406f, 1989a,6; 1989b,292; 1989c,32,35; 1990,23. 253 to use the private sector, nonprofit organizations rather than profit-making organizations are of then chosen1.” In this case the trustworthiness theory can be seen valid in the case of donors (government).2

In the case of the Third World the situation is seen differently. James found in her study on Sri Lanka that there the NGO sector is formed of two subsets: large multipurpose organisations with international networks and international funding, and small indigenous NGOs that work with government subsidies. Historically, the Christian missionaries set up schools and hospitals of which many are still the largest NGOs in the country. The rising nationalism in the 20th century stimulated the establishment of Buddhist organisations to counter Christian missionaries. When we include the Western or international NGOs in this set we have three types of NGOs that are involved in the NPS of Sri Lanka. In this situation the government has an ambivalent attitude: on one hand, it favours the flow of foreign donations through NGOs3 but on the other hand, it wants to control the NGO sector. These two ambitions often contradict. Foreign donors have more trust in NGOs than in governments4, and tight control would drain the money flow. On the other hand, if the Sri Lankan’s would have a possibility to use the money as they want, the preferences would be

1 James’ argument does not fit exactly to the Finnish society in the 1990s. In Finland the privatisation of state activities has (over)emphasised the role of FPOs. This might be because in Finland the concept of third sector/nonprofit organisation is still quite alien except in leisure. However, there has been a tendency towards FPOs when some sport teams have changed their organisational form from association to company and have become listed companies. 2 James 1989a,6ff; 1989c,35. 3 Eighty-seven per cent of total revenues of NGOs came from abroad. James 1989b,296. 4 Although James does not mention it, there are also questions of corruption and nepotism that reduce the trustworthiness of governments in many Third World countries (and in contemporary Russia as well). Too often the money has found its final destination in secret bank accounts in Switzerland and people have been left with enormous debt. 254 different.1

Government subsidies are not only a blessing to nonprofits. This funding has also some consequences for the NPOs. According to James, the most important of these consequences is governmental control. She argues that governmental regulations are mainly used on inputs instead of on outputs because the former are easier to measure. These kinds of measures are the qualification of staff, the quantity of clients served, the decision-making processes, etc. The result of these regulations might be that an organisation loses its independence. James states that

nonprofits can be regulated with or without subsidies… The regulations may be imposed simultaneously with the subsidies, but, more commonly, they are added after the private 2 organizations have become dependent on government funds.

In this way James distinguishes between the determinants of the size of the NPS from their role. The size is mainly determined by the consumer demand, government demand and religious entrepreneurship. The role of the NPS is determined by government regulations. These in turn form the legal framework and state how distinctive or integrated the NPS is.3

EVALUATION of James’ theory shows that she uses various definitions for the concept of nonprofit organisations. In her 1993 article she defines nonprofits as ”organizations that cannot distribute dividends or stock that can be sold for capital gains4.” Six years earlier, in 1987, she noted that this included ”political parties, interest groups, labor unions, organized religion, voluntary associations and trade associations5.” James uses this earlier definition in her report on Sri

1 James 1989b. 2 James 1987,409. 3 James 1989a,8. 4 James 1993,576. 5 James 1987,398. 255

Lanka in which she defines the concept of third sector. She divides the organisations in the third sector into two categories:

The first (type I) consists of organizations providing some shared facility of service where the people who pay (through membership or usage fees) are also the direct and principal beneficiaries and exclusion is possible (e.g., schools, hospitals, churches, and opera). The second main category (type II) consists of organizations where many beneficiaries pay little or nothing and many people 1 who pay do not receive direct benefits.

Thus, according to James, the concept of third sector is wider than the American nonprofit concept which she, in turn, defines as follows:

(1)they are legally and structurally nonprofit…; (2)they provide ”socially useful” services; and (3)they are philanthropies, deriving a large part of their revenues from (tax-deductible) 2 contributions.

The American definition excludes, as we have seen, political actors, mutual groups and organised religion. However, James notes that in other countries there are different tax laws from the US and thus there is a need for another way to describe the topic. James’ own focus

is on organizations that (1) are primarily service providing rather than social or income re-distributive, and (2) qualify as 3 NPOs from the legal-structural point of view.

Here James draws some interesting boundaries. First, she limits nonprofits to ‘service providing organisations’. Second, she excludes social organisations ”that do not enter GNP” as well as political organisations, labor unions and trade associations which she sees as

coalitions designed to alter the distribution of economic wealth 4 and political power rather than expand the productive frontier.

1 James 1989b,292. 2 James 1987,398. 3 James 1987,398. 4 James 1987,398. 256

Thus, James limits the concept of NPO to the economic sphere. The criterion is whether the organisation increases GNP or not. This definition is quite contrary to her main thesis that NPOs are interest-based communities often founded by major religions and that their main goal is to increase the number of adherents. In general, James swings between the American nonprofit concept and wider inclusive definitions. In all cases her point of view is economic.

When James discusses the responsibility of the sectors, she notes that it depends on the needs of a median voter and whether the elite groups hold political power or not. These determinants have given different solutions in different countries.

In general, James’ theory can be regarded as a general theory of nonprofits although she limits her focus on levels of industry and society, and does not deal with organisation or micro levels. Her main focus is on the questions of institutional choice, but she also deals with the behaviour of NPOs, although not as deeply as role theorising. James’ research has concentrated in the field of education and on that theme she has made and used empirical studies from various countries. Thus, she has quite a wide empirical basis. However, when her metaphor is educational institutions, there is a danger to ignore other kinds of nonprofits. For example, she does not mention informal education given in organisations like YMCA, Scouts, 4H, religious bodies and sports associations. In her realm education happens inside the walls of schools. Her theses about the size of the nonprofit sector in Sweden and in Nordic countries, in general, give quite a different view than what Scandinavian scholars have painted1. Her theoretical exclusions determine her results because she excludes those forms of nonprofits that are typical to the Swedish

1 For example, Klausen & Selle 1996 and Lundström 1996. 257

NPS, namely social movement organisations, co-operatives and trade unions. Only recreational organisations fit into her definitions.

In spite of the deficiencies, James’ theory has at least two major merits. First, she was the first to emphasise the role of religions in the formation of nonprofits. Some scholars still seem to have difficulties with this aspect; and although James’ thesis has been widely accepted, it has not been commonly operationalised. Additionally, there is no link to religious movements - James points out the importance of the major religious bodies, but there are a growing number of different kinds of new religious movements which form their own organisations. Thus, there should be a link to sociology of religion and theology in order to understand the role and behaviour of religion based organisations. Second, James’ theory is an elaborated version of the median voter theory. She describes how different contextual variables give different results.

When applying James’ theory to INGOs we first have to look at the cultural context of these organisations. In contexts where there is plurality of beliefs, there are supposedly more NGOs than in homogeneous contexts. Thus, in the context of the United Nations there should be relatively more NGOs than in the context of the European Union. However, this is not so clear because not only the heterogeneity but also the availability of resources determines the size of the third sector. In relative terms, in the EU context there are supposedly more resources than in the context of the UN.

Another important point in James’ theory is her emphasis on religion. She notes that in the Third World there are organisations that have been founded as counter organisations to missions1. In the case of INGOs this is

1 James 1987,404. 258 supposedly valid as well. This is a theme that is quite well known in social movement studies - movements quite often give rise to a counter movement that oppose the goals of the original movement. This notion, in turn, underlines the significance of different ideological or religious networks that enable or constrain an organisation’s actions.

If we look at James’ basic arguments of excess and differentiated demand in the context of INGOs, we see that these arguments have significance. On the other hand, it is often a question of supply rather than a question of demand. The old saying is that ‘demand creates supply’, but in the case of INGOs it is not always clear if there exists a demand. Rather, like James notes INGOs are often formed to bring forth prerequisites of founders (like faith maximisation) and not to produce services that are needed. Additionally, the availability of resources facilitates this process. Demand does not alone explain the explosion of the NGOs after the 1950s. We need research that compares the emergence of NGOs in different decades and centuries in order to understand the role they have had in different periods of history.

7.2.2. Gathering the Research from Various Countries

HELMUT K. ANHEIER has been one of the most influential dynamos in increasing the comparative studies of the third sector. During the Yale project (1985-6) on NPOs he produced the first International Directory of Research on Non-Profit Organizations. There he listed more than 200 researchers from over 40 countries1. It was an attempt to draw researchers together and gather their work. Some years later Anheier analysed the research introduced in that book. In that analysis he laid a foundation for the further projects.

1 Anheier & Seibel 1990,3. 259

In his article from 1990 Anheier evaluates six research themes. First, he sums up what is common in the American nonprofit sector, in the French économie sociale, in the British non-statutory sector and in German expressions gemeinützige Träger, Vereine, und Nicht- Erwebsbetriebe. He notes that the common features are ”that they are neither profit-oriented businesses nor government agencies.” However, he does not theorise further from this basis but instead returns to the American nonprofit concept and states that the common features of NPOs are public or semi-public service provision, nonprofit status, voluntarism and value rationality. Next, he defines that the main types of nonprofits are foundations, nonprofit corporations and membership associations However, with this definition he implicitly excludes mutual benefit organisations and co- operatives which have been essential parts of the concept of social economy.1

Third, Anheier argues that countries can be defined according to four dividing lines: Civil Law vs. Common Law countries; capitalist vs. socialist countries; developed vs. developing countries and Christian vs. Islamic countries2. We can now see that the significance of the second criteria has diminished since Anheier wrote his article. However, a more important issue is that there is no absolute reason to look only at the contradictions of the Abrahamic religions (Christianity, Islam and Judaism) as Anheier does. These religions have much in common because they have common roots and common Semitic concepts. The division is reasonable only in European, Mediterranean or some other limited context. Perhaps a more important dividing line is between Abrahamic religions and Indian religions. There the division concerns the whole thinking starting from the understanding of time (linear vs. cyclical), suffering

1 Anheier 1990b,373. 2 Anheier 1990b,376-380.. 260

(The Fall of Man vs. Dharma Law), etc.

Fourth, Anheier reviews the common and country specific themes of the research and gives the task for future research. He notes that common concerns have been around the issues of public - private relationships, the different solutions in various countries, the role of NPOs in different situations and efficiency questions1. In the case of country specific themes Anheier summarises that ”France shows a concentration on historical studies”, ”economic and finance is most frequent in West Germany”, and ”management issues receive disproportionate attention in the United Kingdom.” Additionally, voluntarism receives more attention in Europe than in the United States. Anheier also states that in case of government

in France and the United Kingdom, research is concentrated at the state (provincial) and local levels. In West Germany, public policy issues dominate. In the United States, research on government issues tends to concentrate on the federal level, 2 being less concerned with local issues.

Finally, Anheier defines the further research needs which are: need of taxonomy, measurement issues, government-NPS relationships and inclusion of NPS theories with international comparisons3. These questions along with the country specific themes showed the way for further research.

It is important to note that Anheier remains in the American definition and does not even try to include European definitions. In his works it is frustrating to see how he speaks of international comparisons, various definitions in different countries - and then uses concepts like civil society, third sector or nongovernmental organisations as equivalent to nonprofit concepts. Unfortunately, this is one typical form of

1 Anheier 1990b,380ff. 2 Anheier 1990b,383ff. 3 Anheier 1990b,386f. 261 scientific imperialism. This attitude shadows his latter comparative projects as well.

When Anheier compares different institutional arrangements in Europe (Britain, France, Germany) he summarises them into two factors:

First, the substantial and sometimes dominant role of government in nonprofit affairs, and second, the tendency to view the nonprofit sector not so much as an organizational universe in self but rather as a sector ‘in between’ whose position and role 1 in society can only be understood in relation to the state.

However, as I noted, Anheier has not taken these aspects into his own theories of the third sector. This has certain consequences to the empirical studies in which he has been involved. I come to them later when I evaluate the Johns Hopkins project in chapter 7.3.

In the case of INGOs perhaps the most significant theme in Anheier’s theory is his classification of countries. It can be hypothesised that this kind of classification could be found in the INGOs as well. The different legal traditions can be found in the procedures of INGOs. Additionally, in federations the traditions of the leading groups as well as the tradition of the host country may provide several options of procedures.

7.2.3. International Conferences

Anheier was also one of the proponents for the 1st European Conference on the Nonprofit Sector and the Modern Welfare State that was held in Bad Honnef, West Germany, June 1987. Anheier and Wolfgang Seibel edited the presentations of that conference in the book The Third Sector: Comparative Studies of Nonprofit Organizations2.

1 Anheier 1990b,385. 2 The second conference was held in Israel in 1989 and the addresses were published in the anthology Government and the Third Sector. The importance of these books is that they are a summary of the research conducted in the field till the end of the 1980s. The weakness lies 262

Although it is not the first international anthology of the field, it is a summary of the research done until the end of the 1980s. The book was divided into five parts: General theories, organisational theory and behaviour, public and private, international comparisons, and conclusion.

In the section of international comparison Rudolf Bauer summarises the impact of papers. On one hand, ”the advantages of small scale nonprofits… centre around the benefits of debureaucratization, decentralization, deprofessionalization, voluntarism, and privatization.” This achieves support from both the political left and right. Bauer states:

The political left sees self-determination, basic democracy, mutual aid, and self-governance... as fundamental ingredients of postindustrial society, while the political right sees nonprofits as instruments reducing state expansion through increasing client 1 participation and responsibility in the welfare state.

On the other hand, serious limitations were found in the NPS. The major problems are financial. Bauer notes that ”in most cases, public funds and philanthropic efforts fail to reach the grassroots, innovative nonprofit sector. Consequently, these nonprofits lack the necessary financial means to provide urgent services.” In this situation the possible transfer of social security responsibilities would most likely strengthen social inequalities.2

The studies in Anheier and Seibel’s edition demonstrate three different traditions of the societies in which NPOs act. First, the conservative, which is a mixture of étatist, paternalistic reformism and the

in the date of the conferences and the books: it was just the dawn of the collapse of Communist regimes in Eastern Europe and the European regression of the 1990s. The first item was on focus in the following conferences. 1 Bauer 1990a,271f. 2 Bauer 1990a,273f. 263

Catholic social doctrine of subsidiarity. This type of societies exist in Catholic Europe, Turkey and Japan. ”The nonprofit sector in these countries tend to be state- oriented associations which accentuate public utility.” Second, the liberal, which dates back to the Poor Law Act of 1601 in England. These types of countries are found in the English speaking Western world. In these countries ”nonprofits are market-oriented and emphasize the principle of voluntarism.” Third, the Scandinavian Social Democratic model, which ”emphasizes the state’s social responsibility and therefore produces relatively less developed and less important nonprofit sector.” These legal traditions can be combined with two other dimensions, namely the religious heterogeneity and the degree of centralisation / decentralisation of the state. The hypothesis is that the centralised government policy leaves little room for the third sector. With these three dimensions Anheier & Seibel believe that it is possible to ”(a) identify and examine groups of countries with comparable attributes, and (b) investigate distinct third sector forms (such as foundations) across different groups.”1

In their ‘selective summary’ of the book Anheier & Seibel draw the results of the conference/book into four propositions:

Thesis 1: ‘Public’ and ‘Private’ are neither dichotomous nor does more ‘Private’ necessarily imply less ‘Public’ and vice versa. Thesis 2: Third sector organizations are both interest-mediating and service-providing institutions. Thesis 3: National patterns of third sector arrangements are shaped more by functions of socio-political integration than by criteria of economic efficiency. Thesis 4: The type of regulatory regime influences the 2 orientation of the third sector.

The first thesis is the same that the authors have also underlined in their own essay in the same anthology.

1 Bauer 1990n,274; Anheier & Seibel 1990,384f. 2 Anheier & Seibel 1990,381-384. 264

I dealt with this issue already above in the part concerning institutional perspective in chapter 5.4.3. The main idea is that the contents of these concepts depend on perspective. It is more a question of a continuum than a question of a dichotomy. At one end there is personal privacy. Then comes family, which is already a public institution. When publicity increases, we go via market to state relationships to private life and finally to solely public affairs.

The second thesis criticises the narrow views of political and economic theories as well as theories of the sociology of organisations. In order to understand the phenomenon we must combine the roles of NPOs as economic actors, social movement organisations and government tools with their internal processes.1

The third and fourth theses underline the institutional arrangements in different countries over economic factors. In different cultures and political systems there are different ways to see the role and legitimate status of the nonprofit sector. These arrangements have strong inertia and ”there appears to be little flexibility of choice between institutional options.” As we saw above in the historical part of this study, these models are old and the change has happened usually in some cultural crisis or conflict.2

7.2.4. Evaluation of the Early Comparative Studies

THE DEFINITIONS of the third sector in early comparative studies have mainly remained in the American nonprofit frame. Although there have been discussions about the need for a common vocabulary these discussions have not led to concrete efforts. There is not even a common definition of the field that is being studied.

1 Anheier & Seibel 1990,381f. 2 Anheier & Seibel 1990,382-385. 265

There are often different combinations of attributes but nothing like Lohmann’s concept of commons. Additionally, in many cases it seems that the American nonprofit concept dominates the field of international studies and other concepts are seen as equivalents to NPO and NPS.

THE RESPONSIBILITIES of different sectors is a theme in which early international studies remain on a descriptive level. They mainly note that there are different solutions in different countries, but only James and Anheier develop explanations as to why this is the case. James develops the heterogeneity theory with the elite theory and sees that the determinant of responsibilities depend on whether the economic elite has political power or not. If it has, the role of the third sector is to support the poor ones while public institutions concentrate on the service of the elite. If the economic elite is excluded from political power, the role of the third sector is to serve the elite. Anheier also sees the other factors like legal tradition and governmental culture as important.

THE TYPE of the early studies fall into three categories. First there are studies that start from some existing third sector theory (James). Second, there are studies that explain the country specialities. Finally, there are preliminary attempts to draw these country specific studies together (Anheier).

THE RANGE of these theories is, in general, either on the industry level or society level. These theories mainly deal with the Western countries and the majority of the studies have been made in the US, the UK, Germany and France. There are two exceptions: James who has data from Sri Lanka, and Anheier who has made studies in Africa. While James’ studies present the widest effort of early international comparisons, their limit is that they focus mainly on the education sector. 266

METAPHORS of the early theories vary from country to country as I have shown already in chapter 3.3. However, both James’ and Anheier’s studies remain in the American nonprofit frame. Additionally, as I noted, for James the model of a nonprofit organisation is a school or a university.

INGOs are partly reflected in James’ and Anheier’s studies but in general the ‘international’ in this case means comparison of the results from different countries. What these studies teach to a scholar of INGOs is that there are numerous definitions and the frame of the study depends on the national background of the scholar. However, this is also true when organisations frame themselves. The vocabulary may arise from the host country, from the traditions of the biggest members who are often best presented in the boards and staffs, from the cultural trend or from an outer entity, like the UN.

The early studies were mainly descriptive country studies or limited international comparisons. The first wide comparative project was launched by Johns Hopkins University in the beginning of the 1990s.

7.3. The Johns Hopkins Comparative Nonprofit Sector Project

THE JOHNS HOPKINS COMPARATIVE NONPROFIT SECTOR PROJECT (JHCNSP or JHP) has been the widest international research project on the third sector1. It started in 1990 under the leadership of Lester Salamon and Helmut Anheier. The aim of the project has been to find common language, concepts and classifications for the research. In 1990, the first

1 Other international projects have been, for example, Eurovol Project of ten European countries during 1994-1997. This project focused on voluntary activity from the perspectives of demography, organisation and social policy. In the European Union the third sector has also received a permanent place when one of the Union’s departments (DG XXIII) has as its task to focus on this sector. Helander 1998,19f. 267 round started among twelve countries and its results have been published in numerous works during 1996 and 1997. In 1996, the second round started among 27 countries and its report was published in 1999. In both rounds, the major focus has been on industrialised countries. JHP has been the largest and most systematic attempt to collect and classify information on the third sector.1

THE TASK OF COMPARATIVE ANALYSIS is, according to Salamon and Anheier2, threefold. The first is the definition of the third sector. The other is the classification of the actors in this sector. The third is to create methodology for finding the data. In other words, the first task is to look at what the actors have in common and the second task is to look at how they differ from each other.

7.3.1. Definitions

According to Salamon and Anheier, there are three kinds of definitions of the sector: legal, functional and economic/financial which all have their benefits and deficiencies3. From these premises authors have modified the structural/functional definition for the Johns Hopkins Comparative Nonprofit Sector Project. According to them ”the non-profit sector is defined as a collection of organisations that are:

• Formal, that is institutionalised to some extent... • Private, that is, institutionally separate from government... • Non-profit-distributing, that is, not returning profits to their owners or directors... • Self-governing, that is, equipped to control their own activities... • Voluntary, that is, involving some meaningful degree of 4 voluntary participation...

1 Helander 1998,18f. 2 Salamon & Anheier 1993. 3 Salamon & Anheier 1993,533-536 (dots and italics in original); 1997a,30-39. 4 Salamon & Anheier 1992a,135f; 1993,537f (dots and italics in original); 1996a,3f; 1996b,13ff; 1997a,33f; 1999,1; Salamon & al 268

However, these criteria need some comments. The first comment is that although Salamon and Anheier frequently mention the European definitions, they remain in the American definition based on the US tax legislation. In their texts, the European definitions are interesting anecdotes, but the American definition is superior. Surprisingly, even when they recognise the different contents of the various concepts, they use the concepts third sector1 and civil society2 as synonyms of the nonprofit sector. Although the authors discuss the definitions in various countries, they do not have discussion on the validity of the boundaries that different concepts draw. Additionally, even if political and religious actors in principle belong inside the boundaries of their definitions, Salamon and Anheier exclude political and religious actors in order ”to keep the project manageable3.” Later, when their project expanded, they dropped this exclusion. One cannot avoid the assumption that the criteria Salamon and Anheier use in their definitions are meant to defend their taken-for- granted nonprofit definition. However, the structural/functional definition has the following criteria.

FORMALITY means that the organisations should be institutionalised to some extent. This does not require necessarily a formal charter, but the institutionalisation can come from ”regular meetings, officers, or rules of procedures, or some degree of organizational permanence4.” However, this criterion is still quite unclear. What do the criteria mean in practice? In countries that require formal registration, the status of formal associations are clearly defined, but what about the informal ones? How to

1999,3f,465f. 1 Salamon & Anheier 1996a; 1997b; 1999,1. 2 Salamon & Anheier 1996a,3f; 1996b,13ff; 1997,33f; 1999,1; Salamon & al 1999. 3 Salamon & Anheier 1996b,15. 4 Salamon & Anheier 1992,135; 1996b,14; 1997a,33. 269 compare different groups in countries that require registration and in those that do not have any requirements? Where is the line that one group is regarded as permanent and another as not?

The criterion of formality leaves space for different decisions about what to include and what to exclude. For example, in the Finnish section of the JHS’s second round, all informal groups were excluded although the estimate of their number is approximately 30,000. Voitto Helander and Harri Laaksonen note that

their significance as employers remains insignificant. Opposed to that, the significance of these kinds of local associations to volunteering is, no doubt, greater… Exclusion of them in the analysis of local associations thus distort the weight of organised voluntarism to be significantly smaller than what it 1 really is.

Thus, the requirement of an institutional form draws a defining line that in some cases may exclude important actors. Additionally, in some cases (like some anarchist groups) it is also an ideological choice to keep the organisation informal.

PRIVACY is the second criterion that Salamon and Anheier include in their definition2. However, the line between private and public is drawn in the water. It changes from time to time and from area to area. Especially QUANGOs and GONGOs are problematic in this sense. Additionally, with the criterion that they should not be ”governed by boards dominated by government officials”, some basic American nonprofits should be excluded. Namely, Peter Dobkin Hall writes about the Harvard College that in the beginning

it was governed by boards composed of ministers of the state- established church and state officials sitting in ex-officio

1 Helander & Laaksonen 1999,23. 2 Salamon & Anheier 1992,135; 1996b,14; 1997a,33. 270

1 capacities.

How can an organisation be private if its purpose is to be public? If Salamon and Anheier mean that these organisations should be private in form without requirements of independence, then it would come closer to what the authors insist on. The criterion that organisations can neither be part of the governmental apparatus nor be controlled by the government would exclude the majority of the educational entities from the third sector. Namely, in countries where private education is regulated by governments, there are so many governmental control mechanisms concerning education that in practice, education is part of the public sector.

NON-PROFIT DISTRIBUTION is the third criterion of Salamon and Anheier2. Here the criterion is so strict that it excludes mutuals and co-operatives because they distribute part of their profit to owners. However, this criterion is ambiguous as well. Estelle James pointed out that there are numerous ways to distribute profits and still remain inside the nonprofit criterion. Typical examples are high salaries, expense accounts, free houses and cars3. In practice, these distributions are much higher than 1 to 5 % provisions of purchases in consumer co-operatives. Salamon and Anheier do not discuss these questions at all. In the criterion of non-profit distribution lies the widest diversities between the American and European thinking. In Europe the main criterion is not whether the profits are distributed to owners or not but whether the general purpose of an organisation is to work on a commercial basis or not.

THE INDEPENDENCE criterion is an enlargement of the privacy criterion4. This criterion states that no other

1 Hall 1997,4. 2 Salamon & Anheier 1992,135; 1996b,14; 1997a,33. 3 James 1987,404. 4 Salamon & Anheier 1992,135; 1996b,14; 1997a,33. 271 entity controls the organisation, whether it be state, donor or any other outsider. However, the control can be de jure in the hands of an NPO but de facto in the hands of a government or donor. If you are economically dependent, how can you be independent? The question is crucial in the cases where the interests of an organisation and the state conflict1. Additionally, in the different legislative systems the concept of self- governing may vary significantly. What does self-governing actually mean?

Another question that Salamon and Anheier overlook is the role of the parent organisations. Should the independence criterion also be used in the relations between an NPO and its parent body? If the answer is yes, then the majority of the Catholic organisations should be excluded from the nonprofit sector because the Catholic Church controls them. Another example is Scouts - the majority of the scout groups in Finland have parishes as their support organisations. In other Nordic countries they are often part of the YMCA. Thus, they are controlled by parish authorities or YMCA boards.

A third question related to independence criterion is the relationship between federations and their member organisations. Is the YMCA one organisation or a combination of thousands of organisations? Although local associations are independent in their actions, they have to accept certain membership requirements before they are accepted as members. On the international level this kind of criterion has been the Paris Basis of the World Alliance. These kinds of membership criteria limit the independence of the member organisations in a federation. The case of the Scouts in Finland is also problematic in this sense. The dependent parish Scout groups are

1 Some human rights groups, like Amnesty International, refuse to take government grants because they do not want to be dependent on the government. 272 included in the National Scout Federation? Thus, on the local level the organisation is not independent but on the national level it is. These questions remain open in Salamon and Anheier’s papers although the answers have a direct influence on the number of organisations included.

VOLUNTARISM is the fifth criterion of Salamon and Anheier’s structural/functional definition1. The authors take a broad definition of voluntarism requiring that there should be ”some meaningful degree of voluntary participation2.” Here again, Salamon and Anheier overlook the discussion on the problems of the definition. Professionalisation of nonprofits has led to the point where there are NPOs that do not have individual membership at all and all their activities are run by professionals. These kind of organisations are, for example, some international umbrella organisations, some political lobbies and associations of municipalities both on the national and international level.

There are also the questions of the two groups that Salamon and Anheier exclude from the beginning during their first round, namely political bodies and churches. The authors state that ”such organisations are properly part of the nonprofit sector3.” However, in spite of that, these groups are excluded without a clear explanation. Here again, one cannot avoid the feeling that the American tax law section 501(c)3 defines the exclusion. During the second round, the data were also gathered on religious organisations and compared to other groups. However, in the reports it is not always clear if the data includes all religious organisations (congregations, synagogues, etc.) or only some of them. Political organisations and social movements are also excluded in the second round.

1 Salamon & Anheier 1992,135f; 1996b,14; 1997a,33. 2 Salamon & Anheier 1997a,34. 3 Salamon & Anheier 1996b,15. 273

MAIN RELIGIOUS BODIES can be excluded from the third sector if they are treated, as I have argued, as state- like entities which form the fourth major sector in different societies. In general, they are more stable establishments than most states. They have their own legislation, bureaucracy, territories, identities and those ‘divisions’ that Stalin was asking about1. However, Salamon and Anheier do not have this kind of discussion at all.

When Salamon and Anheier claim that there have traditionally been two basic sectors, state and market, they ignore the fundamental division of sacred and profane. This is surprising, because they note the role of churches in the formation of nonprofits. Moreover, Anheier, in some of his earlier articles, points out the important role of the Ecclesiastical Law in Germany2. In spite of that, they do not reflect this aspect in their theories. In a way, it seems that they have made a right decision but lack the correct reasoning. The concept of state-like entities would justify the exclusion of religious bodies from the third sector.

However, the boundaries between religions and the third sector have other problems as well. First, different religious bodies have organised themselves and have been registered in a different way. The first difference is in whether the religion is an establishment with its own church legislation or not. In many cases these kinds of religious organisations are structurally part of the public sector but their activities resemble third sector activities (or vice versa)3. Are these organisations included in or excluded from the third sector? If only

1 The expression of the Pope’s divisions comes from Stalin’s devaluation of the Pope’s political power when he made an ironical question: ”How many divisions does the Pope have?” 2 Anheier 1990a,316; 1992,36. 3 Similarly, the report on Israel notes that only 30% of religious employment is in the nonprofit sector. Salamon & al 1999,221. 274 establishments are excluded from the third sector, the situation becomes problematic because similar churches are included into the third sector in one country and excluded from the third sector in another country. Thus, in their project the Lutheran church was excluded from the data in Finland but included in the data in the US.

If the establishments are excluded from the focus, the question of the registration form of the non-established churches arises. Congregations may register themselves as religious communities or ordinary associations. For example, Pentecostals in Finland have organised themselves according to Association Law and not according to Religious Liberty Law which concerns religious communities. Are official religious communities excluded from the focus or included in the data? If they are excluded, then Pentecostal congregations are associations that can be compared to other religious associations and thus included in the nonprofit sector but, for example, Adventists are a religious community that is excluded from the nonprofit sector. Additionally, the Salvation Army is a church in some countries and an association in others. What is still more complex is the status of different new religious movements. Are they regarded as religious associations or as independent religions? Thus, there are difficulties in defining what is a religious establishment, what is a religious community and what is a religious association. Again, Salamon and Anheier pass over this set of problems.

POLITICAL BODIES AND LABOUR UNIONS were excluded from the third sector as well. This exclusion could be valid if political bodies are regarded as part of the state apparatus and labour unions as part of the market mechanisms. However, in general understanding, these organisations are an essential part of the civil society and Salamon and Anheier eagerly claim that their project describes civil society. In general, the research economy 275 definition is valid only if the titles of the papers speak about the limited research target. To speak about civil society without social movements and other political actors is highly misleading.

EVALUATION of the definitions shows that here lies one of the basic problems of the Johns Hopkins Project. Although Salamon and Anheier describe the different national compositions of the third sector, they do not try to find a maximal definition which would include all phenomena that form the third sector in various countries. After reflecting country specific data of the third sector, Salamon and Anheier do not use this data as the basis of their definition. Instead, the authors turn to the various previous definitions of the nonprofit sector. Their own definition grows from the evaluation of these previous definitions, not from the evaluation of the empirical data. The authors then apply their structural- functional definition to three example countries. However, Salamon and Anheier have little discussion about why, for example, co-operatives should, in principle, be excluded from their definition. In the case of the UK they note that

with regard to mutual benefit organizations, such as cooperatives, mutual insurance companies and building societies, most have moved closer to for-profit firms and are now virtually 1 indistinguishable from commercial organizations.

However, this is not necessarily a valid criterion. If we look at Hansmann’s distinction between donative and commercial nonprofits, this criterion would exclude rather many American nonprofits as well. Additionally, Salamon and Anheier note that these kind of organisations are essential parts of the third sector in the Third World. In the case of Brazil they state that

community-based self-help and development organizations and cooperatives are a central part of the nonprofit sector in Third

1 Salamon & Anheier 1997a,42. 276

1 World countries like Brazil.

Salamon and Anheier note that ”to the extent that the fundamental objective of these organisations is not profit per se but general community betterment, it would probably make sense to treat them as part of the nonprofit sector2.” However, they also note that ”the structural- operational definition works better” without national circumstances and excludes these organisations3. It seems that their model for a co-operative is a large consumer co-operative business company. The question of if it differs from some American nonprofits is a theme that should be discussed in detail. However, the form of co- operatives they do not reflect at all is the neo-co- operatives that have emerged, first, with the rise of new social movements, and then, with the reduction of the welfare state. For example, in the field of day care services co-operatives do not differ much from the association based services.

In general, some of the criteria that Salamon and Anheier pose are strict without any compromise (nonprofit distribution) and some others are not so strict (voluntarism). The authors state that ”to be considered part of the nonprofit sector under this definition, however, an organization must make a reasonable showing on all five of these criteria4.” Now, it would be interesting to see what ‘reasonable showing’ means? To what extent should these criteria to be used? This is a basic question from the point of view of their theory because they aim to create a set of definitions that could be used world-wide. If there is room for national applications, then it is not any more an international comparison with the same research criteria.

1 Salamon & Anheier 1997a,46. 2 Salamon & Anheier 1993,538. Italics in original. 3 Salamon & Anheier 1997a,47. 4 Salamon & Anheier 1997a,34. 277

Finally, after creating their structural-functional definition, as we have seen Salamon and Anheier just drop out elements that do not fit into the American tax law codification. Thus, it can be argued that Salamon and Anheier’s theory speaks about the nonprofit sector defined in the American way, not about the third sector or civil society.1

7.3.2. Classification

The other task of the Johns Hopkins Project, classification of the organisations, starts from two basic issues, namely the unit of analysis and the basic of the classification analysis. Salamon and Anheier recognise the problem of classifying multipurpose organisations and thus they propose that, instead of organisation, the basic unit of analysis is the individual establishment. In this way the different activities in multipurpose organisations can be classified.2

In the detailed classification Salamon and Anheier draw an example from existing definitional systems. There are three of them: the UN’s International Standard Industrial Classification (ISIC), the European Community’s General Industrial Classification of Economic Activities (NACE) and National Taxonomy of Exempt Entities (NTEE of the USA).3

THE ISIC is part of a broader statistical system but it has practically only three categories for NPOs: ‘Education’, ‘Health and Social Work’ and ‘Other Community, Social and Personal Activities’. The merit of ISIC is that it is widely used in a wide array of countries but Salamon and Anheier exclude it because it ”excludes a significant portion of what is widely considered part of the [nonprofit] sector.” It recognises

1 Salamon & Anheier 1997a,12-48. 2 Salamon & Anheier 1992b,269; 1997a,52f. 3 Salamon & Anheier 1992b,270f; 1993,539-542; 1996b,4-7; 1997a,51-67. 278 as NPOs only those organisations that receive more than half of their income from donations. The other reason for its exclusion is that the categories are too broad for the needs of NPO classifications.1

THE NACE adds two other categories to the ISIC system, namely ‘Research and Development’ and ‘Recreation and Culture’. ”Despite these improvements, however, the 1970 NACE system still suffered from many of the same problems as the ISIC system on which it rests.” According to Salamon and Anheier, it does not recognise the richness and diversity of nonprofit organisations.2

THE NTEE, in turn ”was designed specifically with the nonprofit sector in mind3.” The NTEE system provides for 26 ‘major groups’, which are combined into ten broad ‘functional categories’. Each group is divided into 17 ‘common activities’ and into 80 ‘additional activities’ specific to the group. According to Salamon and Anheier, both its merit and drawback lie in its rich classification. When it makes sophisticated distinctions, it actually ”gets down to the level of actual organizations” and ”it comes close to a listing of agencies.” Additionally, its categories sometimes differ from the ISIC system and it has possibilities for double counting.4

THE INTERNATIONAL CLASSIFICATION OF NONPROFIT ORGANIZATIONS (ICNPO) tries to combine the good aspects of these three classifications. ICNPO preserves the basic structure of the ISIC but provides a more detailed system of various NPO types. On the other hand it does this with fewer major divisions than NTEE. The ICNPO consists of 12 major activity groups which are as follows:

1 Salamon & Anheier 1992b,273f; 1993,540; 1997a,56ff. 2 Salamon & Anheier192f,275; 1993,540ff; 1997a,58-64. 3 Salamon & Anheier 1993,542. 4 Salamon & Anheier 1992b,275-280; 1993,542f; 1997a,64-68. 279

1.Culture and recreation 2.Education and research 3.Health 4.Social services 5.Environment 6.Development and housing 7.Law, advocacy and politics 8.Philanthropic intermediaries & voluntarism promotion 9.International activities 10.Religion 11.Business and professional associations and unions 12.Not elsewhere classified1 These main groups are in turn, subdivided into 24 subgroups, which in turn have been broken into a number of activities. For example, group 4: social services consist of the classes of ‘social services’, ‘emergency and relief’, and ‘income support and maintenance’.2

EVALUATION of the ICNPO shows that it suffers from the same problems as classifications in general: there are difficult choices to make. For example, should the Scouts belong to ‘recreation’, ‘other education’, ‘philanthropic intermediaries’, ‘international activities’ or ‘religious congregations and associations.’ Additionally, there was a time when it was regarded as a ‘political organisation.’ All of these activities happen in the level of each individual group. The same is true with numerous YMCA activities. The question of Scouts and YMCA reveals one great lack in the ICNPO classification: there is no mention of youth organisations.

Another problem also lies within the decisions of in which group some activity should be grouped. In the case of big institutions, like hospitals and schools, the problem is not actual. But let’s imagine the situation of the general secretary in the local YMCA. she/he is continuously trying to find resources for activities like camping. Perhaps the association owns its own camp centre. Now the crucial question for the secretary is: ”where are

1 Salamon & Anheier 192b,282f,289-297; 1997a,69-74; Salamon & al 1999,467f,471-475. 2 Salamon & Anheier 1993,542f; 1997a,71. 280 the biggest money flows coming from that we can use?” The organisation is basically a religious association and that gives access to the grants from the church. However, it is not enough. Municipal youth work subsidies offer some possibilities because the YMCA has been classified as a youth organisation. In the camp centre there are camps for school-kids, for unemployed youth, for alcoholics and for minorities. Moreover, there are international YMCA camps as well. The organisation receives subsidies from numerous state, regional and municipal organs, something even from the EU or Nordic Council. In every application the secretary tries to emphasise those aspects of the work that she/he thinks the donors would value. Thus, the activities in one camp centre can been classified in numerous ways.

If then, the organisation’s establishment (in this case, the camp centre of the YMCA) should, for some reason, define into which group it belongs, there are basically two possibilities. Either it remains faithful to its final goal and classifies itself as a religious activity, or it can look where the biggest money streams are and classify itself according to that. Thus, as we see below, when the state grants are largest in the fields of education, health and social work, this leads organisations to classify themselves according to these money flows. This would mean that the classification is not made according to activity outputs but according to economical inputs.

7.3.3. Size and Functions of the Nonprofit Sector

The JHP also created a methodology for the international comparison of the nonprofit sector. When the classification stressed economical activity, it is obvious that the methodology stressed economic aspects as well. The focus was on three themes: employment and volunteering, expenditures, and financing. The data was collected from four major sources. The starting point has 281 been national income and subsector data systems. However, these data leave gaps that were filled with targeted surveys, literature reviews and interviews.1

THE SIZE of the nonprofit sector varies from country to country but the average proportion of the nonprofit economy in the countries that JHP second round studied was 4.6% of the GDP. This was almost the same as the first round’s 4.5%. However, there is a great variety between different countries. In the US, the proportion of the NPS is 6,4% of the GDP while in Hungary it remains 1,3%. If the nonprofit economy in the 22 studied countries was an independent country, its GDP in 1995 would have been 1,1 trillion dollars which was equivalent to the GDP of the United Kingdom or Italy. Counted in this way, it would be the world’s eighth largest economy.2

EMPLOYMENT is one of the measures that JHP used in attempting to find the size of the NPS in various countries. In absolute terms the sector employed 19 million employees in these 22 countries. This is 4,8% of the total employment in these countries. If the work of the volunteers was added3, the proportion would grow to 6,9%. Salamon and Anheier note that ”an average of 28% of population in these countries contribute their time to nonprofit organisations.”4

When the project focused with more detail on different industries, researchers found that the NPS has 10% in proportion to the service sector employment. If the volunteers are included, the proportion grows to 14%. Of the total public sector employment NPS takes care of 27% (with volunteers 41%). However, here again there is great variety among different countries. The nonprofit proportion of paid employment in the service sector is

1 Salamon & Anheier 1993,544-551; 1996b,16ff. 2 Salamon & Anheier 1996b,27-113; 1999,3f; Salamon & al 1999,9. 3 The amount of the volunteered hours were changed to full time work. 4 Salamon & Anheier 1999,4; Salamon & al 1999,10. 282 smallest in Mexico with 0,4% and highest in the Netherlands with 12,5%. What is surprising from the perspective of conventional wisdom, is that Ireland (11,5%), Belgium (10,5%) and Israel (9,2%) exceeded the US (7,8%). Salamon and Anheier call this result the ”end of the myth of US dominance.” In general it seems that the majority of the developed countries are above the nonprofit employment average of 4,8% (all but Spain, Austria, Japan and Finland) and all second and Third World countries are below the average.1

When focusing on the internal division of nonprofit employment the project found out that two-thirds (68%) of the paid employees were in welfare services (education 30%, health 20% and social services 18%). Then comes recreation and culture with 14%. Numbers change a bit when volunteers are included because of the amount of voluntary work in recreation, especially in sports. The employment proportion of welfare services drops to 60%. However, there is again great variety among different countries. Education dominates in Argentina, Belgium, Brazil, Ireland, Israel, Mexico, Peru and the UK. These Salamon and Anheier call education dominant countries. The US, Japan and the Netherlands are health dominant countries. Social services dominant countries are Austria, France, Germany and Spain while Czech Republic, Hungary, Romania and Slovakia are culture and recreation dominant countries. Somewhat balanced are Australia, Colombia and Finland.2

When Salamon and Anheier comment on these differences, they point out that in the field of education the major determinant is religion. All but two countries in the study are Catholic and in those countries the church is highly involved in elementary and secondary education. In Israel there is a large religious nonprofit education

1 Salamon & Anheier 1999,5f; Salamon & al 1999,14. 2 Salamon & Anheier 1999,8-11; Salamon & al 1999,15-22. 283 sector as well. In the UK, the explanation is different. The situation in that country reflects Thatcher’s policy of transforming public education to private. Catholic dominance is also seen in social service dominant countries which are all, except Germany, Catholic countries. In Catholic areas the role of the church in education has for various reasons been limited but has remained significant in the social work industry. In the case of culture/recreational dominant countries, the major explanation is the former Communism. The only nonprofit activities encouraged in that time were sports and other recreation. In the health dominant and balanced cases the determinants are not as clear.1

Salamon and Anheier also argue that the inclusion of religious worship activities into their data do not fundamentally change these patterns. However, here is one of the problems of the Johns Hopkins Project. The authors note that the data on religious congregations was gathered from 16 countries (all but Belgium, Colombia, Hungary, Mexico, Peru and Spain). They note that ”religious congregations account for approximately 6 percent of nonprofit employment on average.” 2 However, at least in Finland the Lutheran Church and Orthodox church were excluded because they were seen as part of the public sector3. Thus, Lutheran congregations in the US were included but in Finland excluded. If the Evangelical- Lutheran Church of Finland had been included, it alone would have taken 18% of Finnish third sector employment4. This would show the similar size of the proportion of religious activity in the nonprofit sector as in the case of the United Kingdom where 19% of the total nonprofit employment is in religious bodies5. Additionally, religion

1 Salamon & Anheier 1999,9f. 2 Salamon & Anheier 1999,5,11. 3 Helander & Laaksonen 1999,23. 4 According to Helander and Laaksonen (1999,43), the total paid employment of the Finnish third sector is 82 000. The Lutheran church employs an additional 18 000 persons. Heino & al 1996. 5 Salamon & al 1999,183. 284 is the major field (along with sports and recreation) where voluntary work is done1. Thus, in the case of Finland, the exclusion or inclusion of the Lutheran church changes the proportions of the groups significantly. Other country reports in Salamon and Anheier’s volume do not always clearly say what kind of religious organisations they include, exclude or do not recognise because of their database.

A final theme concerning employment is the generation of employment. Salamon and Anheier note that when they compare the data from the eight countries that were already studied in the first round, they found out that the nonprofit employment ”grew by an average of 24 percent, or more than 4 percent a year, between 1990 and 1995”; while the overall employment in these countries grew only 9 percent or less than 2 percent a year. The growth was fastest in health (40%) and social services (32%, in Western Europe 50%) with education remaining at 14%. Salamon and Anheier argue that the reason for this expansion is the marketisation of the NPS because

fees accounted for 52 percent of the real growth in nonprofit income between 1990 and 1995. By comparison, the public sector accounted for 40 percent and private giving 8 percent. This means that the fee share of the total increased over what it was earlier whereas both the philanthropic and public sector shares 2 declined.

One factor that Salamon and Anheier do not mention is the level of unemployment. Unemployment may have crucial effects on voluntarism. In general, the employment, and especially part time employment, tend to increase willingness to volunteer3. The opposite is that unemployment reduces volunteering. Thus, in countries that have high unemployment rates, the size of voluntary labour

1 Unfortunately, I did not find any data on volunteers in the church. The Finnish Lutheran Church seems to be more interested in the numbers concerning participation than on volunteering. 2 Salamon & Anheier 1999,14f; Salamon & al 1999,29-32. 3 Smith D.H. 1994,249. 285 is lower than in countries with better employment rate. Other factors that are absent in the explanations of differences are the socio-economic determinants like age and number of children1. The ‘older’ the nation is, the less it volunteers.

REVENUES of the nonprofit sector have, according to Salamon and Anheier, trends from philanthropy and public funding to fees and charges. The last ones are the major source of the nonprofit economy. In 1995 charges generated 48% (in 1990 47%) of the income of the NPOs when public subsidies make 41% (in 1990 43%)2. However, Salamon and Anheier argue that ”the pattern of nonprofit revenue changes significantly when volunteers are factored into the picture.” The philanthropy proportion increases from 11% to 27%, fees decline from 47% to 40% and public subsidies from 41% to 33%. With congregational volunteers included the proportions of different sources are almost equal: philanthropy 32%, both others 34%.3

There are mainly two fields in which philanthropy is the main source of income, namely international aid and religious congregations. In the case of foundations, philanthropy is the second largest source of revenue.4 Unfortunately, the authors do not give data on the shares of revenues in these fields.

In the revenues, like in other aspects, there are big differences from country to country. Salamon and Anheier

1 See chapter 6.4. 2 Salamon & Anheier 1996b,63; 1999,10f; Salamon & al 1999,24f. In the numbers of private donations there are supposedly some mistakes in the data. As we saw above, Salamon and Anheier argued that the proportion of the philanthropic sector declined. However, according to their publications, the share of the private giving has actually risen from 10 to 11% from 1990 to 1995. The proportion of new countries added after 1990 does not explain this because the average of the new countries is only slightly above 11%. The explanation is that the exact proportions are: fees 48,34%, public sector 41,24 and philanthropy 10,42%. Thus, it is a mistake in cancellation. 3 Salamon & Anheier 1999,13; 1996b,63; Salamon & al 1999,28f. 4 Salamon & Anheier 1999,13; Salamon & al 1999,28. 286 use the concepts fee-dominant country and state subsidy dominant country to describe what the major sources of revenues are in these countries. According to the authors all Latin American countries are fee dominant and Mexico (85%) is an extreme. In all these countries fees make at least 68% of revenues. Other fee dominant countries are all former communist countries in East Europe (except Romania), Australia, Finland, Japan, the US and Spain. As an explanation the authors note that ”this reflects, in part, the composition of the nonprofit sector.”1

When Salamon and Anheier analysed the data of the first round they found out that in six fields ”fees are the dominant source of the income”, namely business and professional associations (92%), culture and recreation (67%), philanthropic intermediaries (54%), environment (51%), education and research (50%), and housing and development (50%). The authors state that the composition of the nonprofit sector in the country defines the dominance of the income structure as well.2

According to Salamon and Anheier, the fee-dominance in Latin America reflects evidently the significance of the school fees of the private schools in the region. Another determinant is the number of housing organisations that are included in the group of development. In the case of Eastern Europe, the explanation lies in the number of sports associations, which everywhere receive the majority of their income from fees. However, this pattern is not so obvious in the case of developed countries. For example, Israel is an education dominant country but receives its major incomes from public funds. There is also an interesting phenomenon in the case of the UK which, while being an education dominant country, has turned from fee dominance in 1990 to government subsidy dominance in

1 Salamon & Anheier 1999,110ff; Salamon & al 1999,25ff. 2 Salamon & Anheier 1996b,72. 287

1995.1

State subsidies, in turn, were the major source of nonprofit revenues in Austria, Belgium, Germany, France, Ireland, Israel, the Netherlands, Romania, and the UK. In these countries the state subsidies covered from 45 to 77% of nonprofit expenditures. Included here were third-party payments from public sector social security and health programs.2

However, the authors do not question whether it makes a difference if the obligatory insurance is organised through the state organs, nonprofit insurance companies or for-profit firms. For example, in Finland there are two systems. While a large part of the health insurance is channelled through KELA3, obligatory employee insurance, pension insurance and traffic insurance systems are channelled through both private profit making companies and mutuals. Thus, a large part of the social security system is basically business activity. The obligatory nature alone does not make it part of the public sector.

The authors note that the subsidiarity principle explains the situation in the Catholic countries of Western Europe. They note that ”a similar pattern is also evident in Israel, where publicly enforced health benefits are channeled to essentially private health care providers.” The health field, in general, is a public sector dominant industry.4

Here again, the theme that authors leave untouched is related to the case of Britain. Why has the UK moved to government dominance in spite of the Conservative Party’s ideology? One reason might be that when the nonprofit education field expanded because of privatisation the

1 Salamon & Anheier 1996b,72; 1999,11; Salamon & al 1999,27-29. 2 Salamon & Anheier 1999,11f; Salamon & al 1999,25-27. 3 Kansaneläkelaitos, The Social Insurance Institution of Finland. 4 Salamon & Anheier 1996b,66,72-77; 1999,11f. 288 state subsidies to these organisations remained the same. In the new situation they were no longer state subsidies to state organs but to nonprofits.

According to Salamon and Anheier, there is no country in which private donations dominate the revenues of nonprofits. However, it is a significant source of revenues especially in Eastern Europe where it generally has a 21% proportion of the income. The authors explain this with the Communist past which built the social security issues on behalf of the employees. This pattern is strengthened with the finding that culture and recreation, that are dominant fields in these countries, draw, in general, 67% of their income from private fees.1

However, the results are one sided. In the Johns Hopkins Project membership fees have been regarded as equal to charges. This evidently raises the proportion of business incomes. In some cases this is understandable. For example, in the US YMCAs the membership fee is often the same as the entrance fee to a gymnasium. In professional associations, like The International Society for Third-Sector Research, the membership fee means a subscription of Voluntas periodical and reduced prices in conferences. However, the nature of membership fees is often different. They can be regarded as private donations as well. I doubt that ISIC categorisation (on which ICNPO is said to be based) would regard a membership association, whose only income is from membership fees, as a business corporation. There should, at least, be a separate category for membership fees.

EVALUATION of the methodology and findings of Johns Hopkins Project shows that measurements fit quite well to American nonprofit universities and hospitals, but it is questionable if they are proper means to measure the size of the entire third sector. They are especially less

1 Salamon & Anheier 1996b,72f; 1999,11f. 289 useful in the case of youth organisations which may not have large economic activities.

In general, the focus on GDP share and revenues explains only one aspect of the nonprofit size, namely business activity. It does not tell anything about the number of members, organised activities or participants in these activities. Even in the case of business activities it is questionable if the GDP share is the right measurement. For example, Olli-Pekka Ryynänen, Juha Kinnunen and Markku Myllykangas have pointed out that, in the field of health care, there is variation in what is included into the proportion of health care in GDP. Additionally, when the GDP of Finland diminished in the 1990s the proportion of health care expanded to almost 10% even if there were no absolute changes in the health care resources and costs. Ryynänen, Kinnunen and Myllykangas propose, instead of GDP, that it would be more rational to calculate the costs per person which is corrected with the purchasing power parity index.1

Analysis of employment and voluntarism in Salamon and Anheier’s work is closer to the association world but these factors also focus only on one segment of the people involved, namely the activists. These measurements also leave activities and participants untouched. This point is important because ignoring this measurement especially diminishes the size of the religious organisations whose activities are basically free of charge. The JHP has been so tightly bounded with the American model of large business-like institutions that it has ignored the characteristics of membership associations.

There would have been records available on the number of activities, members and participants that could have been collected easier than the number of volunteers. Additionally, there are some classification schemes as

1 Ryynänen, Kinnunen & Myllykangas 2000,58f. 290 well. For example, the World Alliance of YMCAs has membership statistics from the beginning of the 20th century, and in the field of sociology of religion there are measurements for participation counting.

The JHP focus on expenditures and employment is problematic even if we regard NPOs as part of the business world. In the case of for-profit companies, the number of workers does not tell anything about the size of a paper- mill or an automobile factory. Expenditures, in turn, vary a lot according to the availability of resources. They do not actually describe the size of the activity because effective organisations may reach the goal with lower costs than ineffective ones. As we have seen in economic discussions, one of the doctrines in the nonprofit sector is that it works more effectively than the public sector.

In general, it seems that what is evident in the state control of education1 is evident in the JHP as well: it is easier to measure inputs than outputs. The problem is that inputs do not give all of the information for the actual size of the sector. There are vast differences between different sectors in how labour intensive they are or how costly their products are.

An additional question concerning JHP methodology concerns the unit of the explanation. While the project claims that the organisation is not the right unit of analysis, researchers take for granted that the state is the right unit for explanation. However, there are also differences within countries and this variation is lacking in the reports. For example, as John C. Schneider has argued, the US has three cultural tiers in which the nonprofit traditions are quite different2. Similarly, it can be supposed that there are differences between the Belgium Flemish and Vallonian areas and between Swiss

1 See above the institutional theory. 2 See chapter 2.4. 291 cantons because of the differences in cultural background. These questions should have been discussed because the authors emphasise cultural factors as explanations of the variety which is shown in the next sub-chapter.

7.3.4. Factors Behind the Variation

The result of the comparison of the NPS in twenty countries shows that each country is a case per se. However, there are some common factors that explain the nonprofit role and behaviour in these countries. Salamon and Anheier have collected some factors that influence the formation of the country profile.

THE LEGAL TRADITION is, according to Salamon and Anheier, the first dimension that influence the nonprofit size in a country. The basic distinction is made by Roman (Civil) Law and Common Law countries1. The authors note that

In civil law countries, the rights and obligations of individuals and organizations are explicitly spelled out in codified laws. If a particular type of institution is not explicitly provided for in the law in such countries, it does not have a legal right to exist. What is more, the State in such countries is assumed to 2 act for the public or common good and is covered by public law.

In this situation, according to Salamon & Anheier, an organisation that wants to function as a public institution should receive this status from the state. ”This can be done by creating a ‘public law corporation,’ i.e., a quasi-private organization that nevertheless functions within the bounds of public law.” In Common Law countries the situation is different. The private institutions see their work for the public interest as a matter of right. Thus, there are no such restrictions as in Civil Law countries.3

1 Salamon has studied these legal variations in detail in his book: The International Guide to Nonprofit Law. Salamon 1997. 2 Salamon & Anheier 1997a,498. 3 Salamon & Anheier 1997a,498. 292

The situation has, according to Salamon and Anheier, changed during the past decades and the differences have narrowed. However, it seems that the authors tend to simplify the Civil Law tradition. For example, in the field of education there were private schools long before the state started to regulate them. Additionally, there is perhaps larger variation inside the block of Civil Law countries than between Civil and Common Law countries on average.

What seems to be more important is, on one hand, the relation between Common Law countries and philanthropy legislation, and on the other hand, correlation between Civil Law countries and the existence of ecclesiastical laws. As we saw in the chapter 3.3.5. the concept of philanthropy restricts nonprofits to enter into the field of politics. In Civil Law countries there are no such limitations. As a consequence, the ties between nonprofit organisations and political actors are closer in Civil Law countries.

In chapter 2.1. it was discussed how Salamon and Anheier emphasised the administrative traditions: liberal, Social Democratic, corporative, étatistic, Islamic, etc. The basic idea is that in different traditions the issues are organised differently. Thus, in both liberalistic and corporatist models the role of the NPS is significant while in both Social Democratic and étatistic models it remains small.1

While Salamon and Anheier recognise the impact of legal traditions on the size of the nonprofit sector, they do not go deep in questioning what are the factors behind it. They do not ask what kind of view of the society lies behind these traditions. Neither do they ask questions concerning democracy, visibility2, universality of values1,

1 Salamon & Anheier 1996a,15-18. 2 An example of different traditions of visibility is the clash 293 distribution of income in a country, and social justice that are important aspects especially in the Nordic welfare model. While they point out that in some countries the fees are the dominant source of the nonprofit sector, they do not question how these fees are justified. The question of fees in education and health care are linked to the question of whether these services are rights or privileges. This leads to the fundamental question of if the society takes care of its weakest members or not. For example, is education a service for the middle class and elite or (as it was framed in the 19th century) a strategy to diminish poverty? Basically, all of these questions focus on the main question: is the state seen as something that belongs to the citizens (civil society in its classical meaning) or is it something above people?

THE LEVEL OF DEVELOPMENT is Salamon and Anheier’s second factor in explaining the nonprofit size. In development they find several key features. First, the degree of social differentiation creates ”new and varied bases for social organization.” Second, the creation of nonprofits depend on ”the rise of urban commercial and industrial elites and of middle class professionals.” Finally,

as economic development opens new communications links, rural peasants and the urban poor gain new sources of information not tied to traditional powers-that-be. In the process, they become 2 available for new forms of mobilization and organization.

Salamon and Anheier deal only implicitly with the availability of resources that the resource mobilization approach has emphasised in the formation of social

between the President-Designate of the European Commission, Romano Prodi, and the European Ombudsman, Jacob Söderman, on the directive of publicity of the European Union documents in Winter of 2000. In the Scandinavian discussion this was seen as a clash of two traditions. 1 Jane Mansbridge(1983) argues that the locality favours elite rule while the universality and central administration protects equality. Ehrenberg 1999,242ff. 2 Salamon & Anheier 1997a,499f. 294 movements. One of the basic theses of the resource mobilization approach is that when the prosperity increases in a country it enables more money flows to social movements. This notion is valid in the case of nonprofits as well.

THE DEGREE OF CENTRALISATION is Salamon and Anheier’s third factor in the NPS explanation. They make two statements. First, ”the more centralized the structure, the less room for a coherent nonprofit sector.” With this statement they are in the same line with Estelle James, although they do not analyse the theme in such detail as James does. Second, ”where Church and State are essentially one, the opportunities for third-sector development are generally limited.” Thus, according to Salamon and Anheier, the state-church system limits the development of the third sector. This is self-evident, because, as we have seen, if the activities are organised by the established church they are excluded from the third sector, but if the church has another status, its activities are included. However, the authors do not deal with the case of Britain where the Queen is the head of the church and still there is a large third sector. I cannot see any basic difference between the Anglican church in Britain and the Lutheran church in Finland.1

In general, the authors do not take into account the impact of different theologies on the state - church relationships. There is clearly a difference if the church sees that it has the final word on ethical issues (Pope speaking ex cathedra) or if the church sees that it does not have any special wisdom in secular issues (Lutheran teaching of two regiments).

GOVERNMENTAL POLICY effects the nonprofit sector as well. Additional to legal tradition there is

1 Salamon & Anheier 1997a,500f. 295

the overall posture of governing élites toward alternative centers of organized action. Where such élites are defensive and jealous of other potential power centers, they will either limit the scope of nonprofit organizations and the incentives for voluntary action, or seek to use such institutions as instruments 1 for expanding their own influence and control.

On the other hand, not all restrictions come by the anti-democratic sentiments. As the case of France shows, the motivation to restrict the influence of guilds and the church arose from the need for democracy and public control.2

Another theme connected to governmental policy is whether the state uses nonprofits in the delivery of social services or not. If the state supports NPOs this leads to the expansion of the NPS but at the same time limits their independence.3

RELIGION is the final factor of Salamon and Anheier’s explanation, although they do not raise it as an independent determinant. As I have argued in part I, countries can be divided according to religious boundaries. The old divisions from 1054 and 16th century to Orthodox, Catholic and Protestant Europe defined the cultural boarders inside Europe and they are still clearly seen in different attitudes toward the welfare state and in the organising mode of the religion. The way in which a religion organises itself may, in part, explain the differences between countries. The larger circle is Christianity versus Islam in the Mediterranean area, and in the global perspective there is the division between the Abrahamic religions and Eastern religions.

In spite of the stress on the importance of the religion, in Salamon and Anheier’s works there are no theoretical connections to sociology of religion or theology. On one hand, Weber’s concepts of charisma and

1 Salamon & Anheier 1997a,502. 2 Salamon & Anheier 1997a,502. 3 Salamon & Anheier 1997a,503. 296

Troeltsch’s church - sect typology still have validity in explaining the emergence of religious organisations. On the other hand, the relations between the state and the church, which Salamon and Anheier have stressed, are mainly studies in the field of the sociology of religion. The behaviour of these organisations cannot be fully understood without knowledge of religious traditions and thinking.

7.3.5. Evaluation of the Johns Hopkins Project

Now it is again time to give answers to the questions I presented in the Introduction. The first of these questions deals with the definition of the third sector.

THE NONPROFIT SECTOR is the concept that Salamon and Anheier use most in their works. When they use other concepts, like civil society and third sector, the content of these concepts is the same as in the concept of NPS. Although the authors discuss other concepts as well, they remain firmly in the American thinking: nonprofit sector in their works is basically the same as the US tax legislation defines it to be. Salamon and Anheier do not discuss why membership provisions in co-operatives are a stronger argument for exclusion than big salaries or non- monetary benefits that are common in other forms of third sector organisations. For Salamon and Anheier some of their criteria are stricter than other criteria. Thus, for the fulfilment of the criterion of voluntarism an organisation needs just a volunteer board. Additionally, they do not discuss what voluntarism is.

In the works of Salamon and Anheier the nonprofit sector is portrayed as a competitive force that draws most of its income from markets. At the same time it is an ally of the state and frees it from delivering welfare services. It is a major field where voluntary work is done and, finally, it still receives some (but all the time less and less) part of its income from private 297 philanthropy. In a way, the nonprofit sector in Salamon and Anheier’s works is young, urban and professional.

THE RESPONSIBILITIES OF DIFFERENT SECTORS is a theme that Salamon and Anheier discuss carefully. They show how different legal and cultural factors define how the responsibilities are shared between sectors in different countries. However, one cannot avoid the feeling that there is a certain amount of apology in their works. Their ideal model is that the third sector could, with the state’s support, take care of most of the social services, health and education. There is quite little discussion on the themes of visibility, equality, democracy, or power structures which would have diminished the attractiveness of the nonprofit sector and led to the search of other solutions. Additionally, there is no discussion about the merits of other sectors. Why, for example, in sports is there a trend to move away from nonprofit form to company form?

THE THEORY of Salamon and Anheier aims to be an international explanation of the nonprofit sector. It focuses basically on two levels: sector and society. Thus, it is entirely a macro-level theory and has little to say about meso and micro level phenomena in the field. The international aspect in the theory means that it compares national characters in selected countries. It does not deal with international phenomena unless they affect national reality.

Basically, as I have pointed out many times, the theory of Salamon and Anheier is a theory of the nonprofit sector. It is not a theory of the civil society or of the third sector, in general. Although they claim that their project is an international comparison, their exclusions limit their theory to be a search of an American type nonprofit sector from other countries. They do not accept definitions from other countries but remain in the 298

American understanding of the nonprofit sector.

THE METAPHOR behind Salamon and Anheier’s theory is the network of American hospitals and universities. These are large business-like organisations with large budgets, large staff and a certain number of volunteers. Thus, it is not surprising that Salamon and Anheier’s measurements reflect their starting point. As I have argued above, these measurements do not fit well in studying the field of membership associations because they do not measure the essential sides of association activities: membership and activities.

APPLYING TO INGOs, the theory of Salamon and Anheier is problematic. From the beginning it excludes a large proportion of NGOs from the sector. However, this can be corrected by changing the criterion so that it would include mutuals, co-operatives and political actors. It needs only to replace the concept of nonprofit with the concept of non-commercial. In the case of religious actors, I state that churches are state-like entities and thus church federations can be compared to IGOs, rather than to NGOs. Lay religious organisations, instead, are an essential part of the NGO world. Thus, Salamon and Anheier’s definitions can basically be used with some corrections.

The classification of Salamon and Anheier has one major deficiency, namely the lack of the group of youth organisations. These organisations are a special form of organisation for several reasons. First, their activities overlap several groups of activities (education, recreation, religion, etc.) and thus these organisations are hard to be forced into some existing category1. Another special character of youth organisations is that

1 This is basically the same kind of complaint as Salamon and Anheier made themselves about the ISIC, namely that the nonprofit sector was split into other groups. 299 all of their members do not have the right to represent themselves because of their age. At the same time they are actors, not only beneficiaries.

Another deficiency in Salamon and Anheier’s classification lies in the question of membership fees. They are normally not charges in the same sense as when you buy a service. Instead, in some organisations they are meant to cover the majority of the budget and free the organisation from both market forces and from state control. International federations are typical examples of this: the majority of their income comes from their national members which emphasises the dependency of the INGO on its members. If these two problems can be solved, then Salamon and Anheier’s classification can be used as well.

In the case of JHP’s measurements, there are difficulties as well. JHP method would emphasise the role of those INGOs that have a large central bureau and centralised budget. Additionally, the way JHP measures the data would emphasise the fields that are money and staff intensive and overlook those organisations that run large activities with small budgets. In general, the measurements should be rethought before they can be used in the research of membership federations.

7.4. Discussion on the Comparative Studies

The majority of the comparative work has been done in four countries: US, Britain, France and Germany. The American research dominated at the beginning and determined the main concepts. As the other countries have become involved these theories have been challenged to a greater extent. For example, the Scandinavian scholars have stated that against the homogeneity/heterogeneity theory there is rather large third sector in Nordic 300 countries, but it serves quite different purposes than in other countries1. Two of the most typical fields of the third sector in these countries are culture and recreation. While sports in the United States and other countries is heavily for-profit activity, in Nordic countries it is still mainly based on voluntarism although professional sports are increasing all of the time.

When we focus on the fields of culture, recreation and religion, it is questionable if the economical measurements of James’ and the Johns Hopkins Project are adequate. The activities in these fields are not primarily economic activities and thus economic measurements may give misleading results. If we would measure the number of organisations, the number of activities or the number of participants in these activities we supposedly would get different results from JHP findings. The problem with the focus on revenues and expenditures is that some industries need more money than others. For example, five full time researchers need as much money per year as my previous employee, YMCA of Jyväskylä, needed for the service of its 500 members in the end of the 1980s. In the case of the Scouts the difference is even bigger. A medium size Scout company needs normally less money per year than one single researcher for her/his salary. Additionally, the modern technology sometimes downplays the significance of money in launching campaigns and other activities. Good examples are different discussion groups on the internet. Often the costs of these communities are paid by some outer organ like the university of the leading activists and the group does not have to invest in the equipment2.

1 See, for example, Klausen & Selle 1996; Lundström 1996; Unfortunately the Swedish report was not available in the Johns Hopkins second round report. Thus, Finland remained the only Nordic country in that report and the results are, as I noted above, not compatible with other countries when religious bodies are included. 2 In the case of third sector discussion groups, the ARNOVA discussion group is located in the server of West Virginia University’s server and the ISTR list is located in York University’s server. 301

Thus, one important task in the future is to develop measurements that see both membership organisations and service organisations alike. The Evangelical Lutheran Church in Finland has a statistical system that measures the number of different groups, amount of members in these groups, number of activities and amount of participation in these activities. Basically it could be applied to hospitals, education and social service as well.

Salamon and Anheier frequently used expressions whether the nonprofit sector is developed or less developed. However, the research has to notice whether the third sector is increasing or decreasing in the long run. Salamon and Anheier have historical data only from the 1990s and from a limited set of countries. However, it is questionable if the 1990s is a typical era even in the 20th century. The comparative studies presented in this chapter give only a temporal slice of the phenomenon. In social movement studies there has long been a notion that movements emerge and disappear in cycles. There is no knowledge as to whether the 1990s is a peak or bottom in third sector activity. Additionally, the phenomena in the 1990s are strongly influenced by four phenomena: the crisis of the welfare state, the collapse of Communism, the economic regression and globalisation. However, there are no guarantees that these trends last forever.

One crucial factor in these trends is how citizens and political actors frame the state. Earlier the Scandinavian root metaphor for the welfare state was a people’s home and in that situation it was natural that the ‘home’ takes care of the individual’s needs. In 1990’s the root metaphor has shifted from home to enterprise. Practically, that means that the state tries to minimise its costs and give up its responsibilities.

While recognising that the theories do not always fit with Nordic countries, their validity on other contexts is 302 also under question. Relatively few studies have been made on the Third World and almost nothing on international level organisations. Although here and there are mentions of the equivalence of the terms NGO and NPO, there is quite little interaction between these fields of research - one can see it by comparing the authors in the bibliographies. The discipline is still quite dominated by the West. It would be interesting to see how the concepts develop when the scholars from non-western cultures start to define them from their own philosophical background.

The biggest merit of comparative international studies is that it exists. It seems the only possibility for finding common language in the field. It also gives the possibility to evaluate which phenomena are general and which are county specific and which kinds of cultural factors have similar effects. We might see the same form in different countries but the formation process might have been different1.

THE CENTRAL QUESTION of part two of this study has been: ”How do the researchers frame the third sector.” In the case of comparative studies it seems that the basic frame is the American nonprofit sector. This is a bit surprising because the need is for a common vocabulary and common concepts. It seems that in spite of the terminological analysis that some scholars have made, there is no link from these analyses to empirical studies. Salamon and Anheier’s habit to use the concepts of third sector and civil society as equivalents of the nonprofit sector does not promise good for the future of comparative studies. They put all of the phenomena into the American frame. Fundamentally, in spite of its multidisciplinary character, international nonprofit research remains an extension of economics. Theories focus mainly on the economic issues like employment and revenues. The

1 Like 2+2+2+2+2=10 as well as 5+5=10 and 3+7=10. The result is the same but the units are all different. 303 participatory aspect is missing.

The central question of the whole study is: Why are third sector studies important in contemporary society? Even if the international comparative studies, that have been evaluated here, have a limited frame of the third sector they reveal the sector as a great economical force. They question whether human sciences can ignore the importance and function of these organisations. If much of the education happens in nonprofit institutions, how can the sociology of education ignore their special character? If religion is the major force behind the nonprofit activity, how can sociology of religion concentrate only on churches, sects and new religious movements? Similar questions can be made in other human disciplines as well.

It can well be said that in the field of sciences, nothing exists before someone has made a dissertation on it. Along with their predecessors and colleagues Salamon and Anheier’s merit is that they have shown that there exists a significant sector in our societies that has not been properly studied. 304

PART THREE: CONCLUSION 305

8. Conclusive Discussion

On the basis of the international comparison DiMaggio and Anheier were sceptical about the possibilities in forming a general theory of NPOs1. Anheier stressed later that there should be several theories because the phenomenon is so heterogeneous2. On the other hand, in the Johns Hopkins Project Anheier has tried to find some common characteristics within nonprofit organisations. In this chapter I first sum up the theories that I have evaluated and discuss them. Then, based on that discussion, I formulate a theory for studying federation type INGOs.

8.1. Strengths and Weaknesses of the Third Sector Theories

THE ECONOMIC THEORIES were the first attempts to describe nonprofit organisations. However, they are based on the utilitarian formulations of rational choice. This basic perspective has both merits and deficiencies. The main deficiency is that it is at least questionable if people act rationally (or rationality must be defined more carefully). However, the rational choice perspective leaves out emotions, commitments, altruism and unconscious decision making. In many cases it seems that people act first and only afterwards do they try to explain that their behaviour made some sense3. The rational choice

1 DiMaggio & Anheier 1990,154. 2 Anheier 1995,22. 3 Ernst Cassirer has underlined this order in his parable of seeing a bear: When someone sees a bear in forest, (s)he first runs and afterwards explain that the situation was dangerous. Sigbjørn Stensland has pointed it out as follows: ”The interesting point from Cassirer's point of view is that action, the running, takes place before the feeling of the state. The cognitive aspect then is something which is the result of the whole sequence. Accordingly, it is not a judgement of how to act, but only a registration of what has occurred." (Stensland, Sigbjørn 1986,71). On the other hand, an unconscious act is not the same as an irrational one. The New Scientist reported recently on intuition studies. The main idea in 306 theory has been widely used in economics but has not been unanimously adopted in other social sciences1. If we look at the histories of nonprofit organisations the rationality is often something else than economic calculation. To be remembered are figures like St. Francis of Assisi, Henri Dunant, Mother Theresa and many others. Their organisations did not grow from economic calculations. Additionally, in many cases it seems to be that if only one would know the total cost of an enterprise, she/he would not start it at all. There is a saying that specialists know that something is impossible, but then comes someone who does not know it and does it.

Utilitarian theories also have their credits. While pointing out the individual’s rationality they have brought the individual actor in the centre of the analysis. Human beings are not (only) animals that behave according to their instincts. They are neither robots that are products of some outer system. Instead, they make choices from their own premises and those choices have an influence on society. However, individuals must be seen only as one part of the system. Organisations do not emerge only from individual decisions but from the interaction of several determinants. It is good to remember that 2+2+2+2+2=10 as well as 3+7=10 and 5+5=10. They all have different cardinal numbers but the sum is the same. In the same way the third sector organisations may have the same form (association, foundation) but all the elements that constitute them may be different.

Weisbrod’s public goods theory fits with situations where the government sees social service or education as its duty. Further, it requires that the government represents the median voter and not some special class. As

these studies is that the brain remembers things that the conscious has forgotten, and in some cases this hidden information leads decision making. Spinney 1998. 1 See, e.g., Hindess 1994,542f and Bruce 1993. Bruce especially argues against the use of economic theories to explain religiosity. 307

James has shown above the role of the state is in those cases different. However, the theory seems to fit quite well in the welfare states that are reducing their responsibilities in the 1990s.

Also the heterogeneity theory of Estelle James seems to fit in many cases. Religion, ethnicity and language are important factors in the creation of heterogeneity1. In addition to Weisbrod’s argument, different groups want to have something of their own. They want something that is under their own control and that could strengthen their identity. However, heterogeneity itself does not explain why some countries have larger third sectors than others. Scandinavian scholars have challenged the notion that such homogeneous countries as Nordic countries have small third sector by stating that it only works in different fields. Scandinavian nonprofits act mostly in the fields of leisure and social movement concerns. Anheier adds to the heterogeneity discussion the legal systems of Roman (Civil) Law countries, Common Law countries, Social Democracies and socialistic countries. Here also many other legal, religious and cultural backgrounds could be added.

Hansmann’s trustworthiness theory deals only with the choice between for-profit and nonprofit forms of services. It leaves out, as James criticises it, the public sector which would in most cases be the most trustworthy provider of the public goods. Further, I doubt if the organisational form is the major determinant for the trustworthiness. In Finland, the Helsinki Deaconesses’ Institute (Helsingin Diakonissalaitos) is the biggest private hospital corporation. Although the mother organisation is nonprofit, the hospitals are organised under a commercial body. Still, this commercial body enjoys the same respect as its nonprofit owner. Rather, I would seek the basis for the trust from the mission and

1 James 1987. 308 identity of the organisation and not from its form. I agree that these overlap in most cases because most nonprofits are religious or ideological entities.

In general, economic theories see the third sector as an enlargement of the market. This means that the focus is on economically important aspects. Other aspects, like power, motivations, relations to society, etc., are dealt with only if they are needed to explain economic behaviour. Basically the view of civil society introduced in these theories is the one that classical liberalism portrayed: market is the center of civilisation.

HISTORICAL studies have shown that some basic forms of organisations have emerged quite early in history. The shift between private, nonprofit and public has been continuous. Depending on the zeitgeist and political determinants, the church, the state, the market, the nonprofit or the private sphere have dominated the distribution of education and social services. These studies could further benefit from the findings of protest cycles made in the social movement studies. Do the protest cycles and philanthropical cycles go hand in hand or does the peak of one decrease the other? Moreover, the resource mobilization approach has emphasised the role of resources in the formation of social movements. Is this notion also valid in the case of NPOs and NGOs? This far the majority of third sector studies lack a historical perspective. Historical studies could reveal whether some phenomenon is a product of modernity (or post-modernity) or if it is only an intensified version of the old one.

In the studies analysed in this work there has continuously appeared the significance of religion. When the economic theories speak of market failure, state failure or nonprofit failure, historical research gives a hint of something like church failure. Why are the duties that were for centuries the territory of the church now 309 transformed to secular services? Have the established churches been more interested in guarding the purity of the faith and their establishment than their deacon-work? Have the doctrines favoured or restricted their own activities? How have the churches seen the responsibilities between different sectors in education, health and social service? How have the state - church relationships influenced the different solutions? What have been the churches’ attitudes toward lay activity? These are questions that remain tasks for further research. Additionally, they are tasks that call theologians and sociologists of religion to bring their contribution to third sector studies. Below are some preliminary impressions that I have attained from the studies analysed in this research.

First, it seems that the Reformation and the Enlightenment strongly favoured decentralised attitudes. This, in turn, favoured the emergence of different grass- roots organisations, like Halle Institutions. Open questions in this case are related to Clifford Geertz’ idea of a symbol as a model. He states that it is a model of something and a model for something. Although an institution is not mainly a symbol, Geertz’ model of and model for thinking can be applied in the organisations as well. Thus, the questions are: ”To what extent do the institutions of the Reformation era borrow their organisation models from previous organisations like brotherhoods, monasteries and guilds?”, and: ”How have the Reformation institutions given a model for the latter third sector organisations?” These questions should be accompanied with questions about the impact of the emergence and diffusion of new ideas and innovations.

Second, it seems that there are important differences between doctrines that could, in part, explain the variations in different parts of Christendom. I have argued for the basic division between Catholic, Lutheran 310 and Anglican countries1. Lutheran teaching of the two regimes has emphasised the role of the state in the welfare of the citizens. The Catholic church, in turn, has fought with the Emperor so long that there is a basic tendency to mistrust the state. In the Anglican world, the local autonomy principle favoured decentralised solutions. This was accompanied by the emergence of the free churches which were persecuted in Europe. These trends have links to the state - church relationships. At one end of the continuum, there is the Finnish system in which the national church system has kept the relationships close. In this system the church has developed and maintained services within its organisations or has submitted the duties to the state. At the other end is the Communist system in which the church was not allowed to have any other activities but its religious ceremonies inside the walls of the church building. The old French system has also characteristics of this abandonment. In the middle there is the US system which also tries to guard the separation of religion from the state. The difference is that in the US the religious based organisations were allowed to work. However, when these organisations produced services that were financed by the state they had, as Ram A. Cnaan put it: ”to remove all religious symbols from the room where service was provided; forego any religious ceremonies (such as meal prayers); accept all clients even those opposed to the beliefs of the providers; and hire staff that reflected society at large and not the organization's spirit and belief system 2.” This favoured the secularisation of the formerly religious organisations.

Third, the churches have different policies towards lay activity. Quite often there has been one single religious individual who has seen a suffering neighbour

1 In Anglican countries there is, of course, a strong Calvinist presence. 2 This prohibition was finally cancelled in 1999. Cnaan 2000. 311 and tried to do something to help him/her. Sometimes this work has been done in the churches and sometimes outside them. If the church favours lay activity in its organisation, it supposedly means that there is no need for special lay organisations. In the opposite case, if the clergy is hesitant to delegate power and responsibilities to laity, this supposedly favours the organisation of the activities in a separate lay association. However, the situation is not this simple because different aspects of charismatic leadership, tradition, zeitgeist and other issues bring their spice into this soup. Anyway, the contribution of religious movement scholars and church historians is needed to clarify these issues.

SOCIOLOGICAL AND POLITICAL THEORIES have tried to make some holistic explanations on the basis of existing theories. In the nonprofit research the basic distinction has been between the emergence of an organisation and its later development (or the role and behaviour). The research problem determines on which level, organisation, sector, or society level the study should be carried out. However, in spite of the decision, the researcher should be aware of the impact of the other levels.

Most of the sociological and political theorising has taken place on macro or macro-meso-level. Political studies have mainly focused on the role of the third sector organisations. In general, the third sector has been seen as a substitute for the state. The frame of these studies has been that of national economy and social politics. Thus, questions of power, ideology and collective identity that have been important in social movement studies, have not been addressed in third sector literature.

Sociological theories have, in turn, focused on the dynamics of how the organisational environments influence 312 both organisational niches and individual organisations. The Ecological approach has described the dynamics in the organisational niche and the fight for resources. It has seen organisations quite stable and claims that the change in some niche happens mainly by the death of old organisations and the emergence of the new ones rather than by the adaptation of an organisation to its environment. With this statement, ecological theory is in opposition to older adaptation theories which see organisations capable of changing themselves in order to adapt to their environment. Anyway, ecological theory gives an explanation of how the environment creates opportunities and restrictions for the organisations. Combined with the adaptation theses this means that the environment creates opportunities, restrictions and threats but does not determine the fate of an organisation. In other words, environmental factors create potentials that may be fateful if organisations cannot solve them. Some organisations are capable to alter themselves and some are not. It seems that federal organisations or organisations that are in some organisational network have better chances of survival than lonely ones. In addition old organisations are more stable than new ones.

If the ecological approach is interested in the material aspects of the organisational environment the institutional approach is interested in immaterial ones. The institutional approach has underlined that the organisation reflects the myths in society. In society one can not freely choose the organisational forms for the activities. Instead there are some customs, values and forms that people take for granted. Organisations have to modify their structures, activities and public identity in such a way that it strengthens their legitimacy. This approach requires the knowledge of the customs and beliefs that lie behind these institutional myths. The institutional theory has been developed in the context of 313 education. The dynamics in that industry are rather well known. However, it is not self-evident that the dynamics in the field of education can directly be applied to other fields. Additionally, when an organisation works in several niches, it has to balance the expectations of these different niches. An important task for future research is the analysis of how different niches mould organisations and to compare similarities and differences in the expectations in these niches. In this work Erving Goffman’s1 frame analysis, which has been used in social movement studies, could be a valuable tool. Frame analysis has focused on both individual and collective frames and identified movement cultures and collective identities2. These cultures may, in part, explain, for example, the differences between the service level of religious nursing homes and other ones that Henry Hansmann noted3.

In general, both sociological and political theories of the third sector have remained to be functional socio- economic theories of the third sector. Other kinds of sociological problems are mainly absent. Compared to social movement literature, in third sector literature there is little theorising of the emergence cycles, the organisational identities, ideology, organisational cultures, relationships between a mother organisation and a daughter organisation, or the constituencies of the organisations. Moreover, when the political organisations are mainly excluded from the researchers’ focus, the view of interaction between the organisations and society remains limited. Thus, sociological studies of third sector organisations would benefit from the contributions of both general sociology and from its subsectors like social movement studies. Additionally, cultural studies, world view studies, and the history of philosophy would explain the raison d’être of these ”interest-based

1 Goffman 1959. 2 See, e.g., Benford 1997; Carroll & Ratner 1996. 3 See chapter 4.2.2. 314 communities”, as Estelle James called them.

SOCIAL-PSYCHOLOGICAL STUDIES have one major merit. They form almost the only field of human studies where altruism and voluntarism has been studied. The motivation of people who do the actual work are as important as the structural determinants of an organisation. However, while the determinants of volunteering have been revealed, it is only the active part of the participation. Similar motivational questions can be also asked on the mere passive participation. As Wilson and Janoski noted1, not all organisations encourage voluntarism. They still may move large masses of people. In social movement studies there is a common distinction between core members (volunteers), rank and file members and supporters (donors). In third sector studies there is a similar distinction between active and passive members.

INTERNATIONAL COMPARISONS have curved their way by bringing together third sector scholars from different countries. International comparative studies have brought together the variety of concepts and classifications that exist in various countries, and they have also started to compare the size and characteristics of the third sector cross nationally. However, comparative studies have remained on economic issues. Basically they are not studies of the third sector or of the civil society but studies of the nonprofit sector as an economic field of activity. The methodology that comparative studies use does not suit well to study of membership organisations. The reason is the same as in other studies as well: the participation dimension is missing. If the third sector is studied only as an economic entity, the research gives only a one-sided view of the role and behaviour of the sector. The question for further studies is ”how can James’ notion of ‘interest-based communities’ be operationalised and studied?” Additionally, the task for

1 See chapter 6.4. 315 developing a common vocabulary has remained undone. In this development of vocabulary Wittgenstein’s family resemblances could be a useful tool.

Most of the theories evaluated in this study have focused on the context of the organisation or on the organisation structures. These can be seen as opportunity structures of organisations. These opportunities and constrains should not be seen as determinants of the organisation development but merely as catalysts or possibilities. They are not, in Weber’s terms, the switchmen that lead the direction of the organisation. This role should be given to organisational ideology which I discuss below. The study of organisational ideologies has not been in the centre of nonprofit studies. However, I claim that the behaviour of nonprofits can not be understood without knowledge of their ideological basis.

8.2. Implications on the Hypotheses of Federal INGOs

8.2.1. Theory of INGOs in Brief

What follows is a preliminary attempt to formulate a theory on federal international nongovernmental organisations. It remains mainly on the organisational level and focuses on the organisational environment from organisations’ perspective. Basically, the model will be developed to the study of the World Alliance of YMCAs but it can, hopefully, be applied to other federal type INGOs as well.

The starting point of this theory is, on one hand, in Roger A. Lohmann’s note that nonprofit organisations have not been studied from their own perspective but as a residual category. On the other hand, Michael T. Hannan and John Freeman have underlined the importance of the core values of an organisation. Their theory of 316 hierarchial inertia states that the mission is the most stable element in organisations.

We can describe a nonprofit organisation with a figure that is a modification of Hannan and Freeman’s theory of hierarchial inertia and relative structural inertia1 the organisation is seen as an onion (¡Error! Argumento de modificador desconocido.).

The core of an organisation is its raison d’être. Around the core is the shell which can be seen as a materialisation of these immaterial issues. The shell also include the activists, i.e. those who actually run the organisation. Finally, outside the organisation there is the context or niche in which the Figure ¡Error! Argumento de modificador desconocido.: organisation acts. Organisation onion

As it has been said many times, most of the nonprofits are based on religions or ideologies which typically contain such elements as identity, belief system and mission view. These are the core of the organisations and have the strongest inertia. In organisational changes the core is the norm according to which the proposals are seen. Basically the distinction between the three elements of

1 See above in chapter 5.4.2. on ecological approach. Hierarchial inertia can be used in the studies of the core and structure and the relative structural inertia can be used in the analysis of the organisational niche. 317 the core is only analytical. They are so closely related that in practice it is not possible to separate them. To say ”I am a Christian” contains all of those elements. Analytically, the mission is the ultimate goal of the organisation. The identity explains who the members of the organisation are. The belief system is the doctrinal formulation of the two others.

The second level, the shell, consists of the structure of the organisation: its leadership, its social objects1 (heroes, martyrs, holy places and times, etc.) and adherency. These, in turn, can be divided into more detailed fragments which I deal with below.

The context is the last layer in the organisational onion. It consists, on one hand, of supporters, resources and opportunities and, on the other hand, of adversaries, costs and constraints. Additionally there are authorities and the public.

All organisational levels are interdependent in such a way that changes in one of them create a potential for changes in others as well. As Hannan and Freeman state, the organisational inertia is strongest in the core and it is less likely to change. Additionally, in all changes the core will be reflected as a norm for the validity of the change. In fact, if the core changes significantly, the organisation ceases to be what it used to be and is transformed into something else. This requires often total

1 Lang and Lang define social objects as follows: Those who are social objects occupy a central position without being leaders. They differ from leaders in two important ways: first, they neither instigate nor initiate action for a following; second, they do not participate in the action or share in the collective mood of which they are the focus. The category of social objects thus includes such diverse roles as victim, villain, martyr, idol, hero, and fool. Not all objects in the focus of collective behavior are persons. The object may be a symbolic representation of a collective goal - a totem, a flag, or sacraments... But persons constitute a special kind of object among the many possible focuses of collective action. Lang & Lang 1961,291(-332) 318 change in the adherency1. The changes in the shell may influence the core as well. The change of structure may alter the status quo in the organisation and change power structures in it. The change of the structure may also bring to the decision-making new people who may have different interpretations of the mission of the organisation. Finally, the organisational environment can make restrictions or create opportunities that did not exist before. Below I deal with these in detail.

8.2.2. The Core

COLLECTIVE IDENTITY is the first element of the core in an organisation (¡Error! Argumento de modificador desconocido.). It defines the boundaries between ‘us’ and ‘them’. Collective identity has become one of the key words for the European new social movement approach. Alberto Melucci claims that new social Figure ¡Error! movements arise in defence of Argumento de 2 identity . If we look at the modern modificador history of nonprofits, we see that desconocido.: The core this is true in the case of them as of an organisation well. Religious, ethnic and linguistic based organisations, like schools, are mainly defenders of the collective identity of the group they serve.

For Melucci, collective identity is not stable but ”a definition constructed and negotiated through an activation of the social relationships connecting members of a group or a movement3.” Also the ”collective actor is

1 A typical example is Bert Klandermans’ study on the Dutch Christian Peace Movement which altered its mission when the adherency changed. Klandermans 1994. 2 ”What individuals are claiming collectively is their right to realise their own identity.” Melucci 1980,218. 3 Melucci 1992b,49. This approach, which is close to interactionist and constructivist approaches is some kind of ‘tabula rasa’-approach. 319 always a composite, a constructed reality which nevertheless presents itself empirically as a unit1.” For Melucci social movement is not an entity but a process2.

In the new social movement studies, identity has three dimensions: individual, collective and public identities. In other words they refer to the questions: ‘Who am I?’ ‘Who are we?’ and ‘How do others see us?’ Collective identity defines on which grounds the multipurpose, federal organisation is still one unit. In INGOs the collective identity has to compete at least with the constituency’s national, religious, cultural, professional and interest identities. Along these, one important form of identity is related to age. Karl Mannheim wrote in the beginning of the fifties about the ‘stratification’ of experience3. He meant that a generation is formed by those people who share the same kinds of experiences when they first enter into public life in their adolescence. Although older generations experience the same events, they explain them from the point of view of their shared adolescent experiences. As Mannheim puts it:

Youth experiencing the same concrete historical problems may be said to be part of the same actual generation: while those groups within the same actual generation which work up the material of their common experiences in different specific ways, constitute 4 separate generation units.

People who participate in the decision making of a federal INGO have several identities and these identities influence how the different coalitions are formed in the

It is a new view compared both to the Marxist understanding of identity as a manifestation of macro level changes and to the Freudian psychological-biological approach. (Hunt & al 1994,187ff.). The former could be called ‘adaptation’-approach and the latter ‘a treasure box’-approach. Hans Mol is one of those who understand identity as a core which is revealed after the roles have been undressed. In this Mol follows David J. de Levita (1965) who presented the definition in his book The Concept of Identity. Mol 1976,60. 1 Melucci 1992a,242. 2 Melucci 1992b,48. 3 Mannheim 1972(1952),111-120. 4 Mannheim 1972(1952),119f. 320 organisation. Sometimes the dividing lines can go between generations, between cultures, between the rich and poor, between activities, etc. These separate identities mould the understanding of collective identity. This interaction process, in turn, moulds the mission of the organisation. For example, if some people in a conference frame their identity primarily on a national basis, their vision of the World Alliance’s mission may emphasise aspects of the coordination of common interests, like international camps, hotel facilities, etc. Instead, if some others frame the YMCA as a body of Christ they may emphasise the common responsibility of the weakest member of that body, which in turn, points to the need of refugee work and development co-operation.

When the collective identity defines the organisation’s identity from inside, the public identity does this from the outside. In public identities there are as great varieties as in the case of collective identity. Outside people from different backgrounds frame the movement differently. In order to adapt to different societies and gain legitimacy an organisation has to develop different public identities. The crucial question to any organisation is how much these public identities strengthen the competing identities and split the collective identity.

THE MISSION is the counterpart of identity. The identity question, ”who are we?”, is often accompanied by the mission question ”why are we here?” Especially in religious organisations, the mission question is closely bound to religious identity and both are connected to the belief system. Thus, it is not clear which was first, the chicken or the egg. However, if we see the mission view as one part of the world view, we can see that it has the following aspects. First, there is an interpretation of the present reality. In social movement literature this has been called the articulation of the grievance. Without 321 articulation of the grievance there is no problem and as long as something is seen as natural, there is no need for change. The first step of any emerging enterprise is the analysis of the present situation. From that analysis emerges the interpretation of the reality.

Second, there is a vision of the hoped future. This hoped future is the final ‘goal’ of an organisation. It is not necessary to explain it in a cognitive way. Instead, it may be explained in broad terms, like ”the extension of His kingdom” in the YMCA Paris Basis. Who can say what ‘God’s kingdom’ really means? This broad mission view enables organisations to react in carpe diem moments and modify their activities according to the emerging needs. For example, the YMCA triangle principle - a human consists of body, mind and spirit - has enabled the YMCA to develope a broad range of activities without violating its mission view.

It can be questioned if the final goal is the same as the strategical goal of an organisation. However, the final goal may be stated with such vague terms that it is impossible to define what it means. Thus, I prefer to keep it separate from the strategical goal. Strategical and tactical1 goals are more concrete and can be written in long-term and short-term plans. Thus, in the case of the World YMCA, the final goal is the ‘extension of His kingdom’, the strategical goal is, among others, taking care of the refugees, and tactical goal may then, provide them a professional education or knowledge of a new language. However, these goals are in a hierarchial relation so that the tactical goal should not violate the strategical goal and final goal. Otherwise there is a danger that the mission of an organisation changes. Additionally, as Herbert A. Simon has warned, there is the

1 The difference between these two concepts is defined by Karl von Clausewitz as follows: ”Tactics is the art of using troops in battle; strategy is the art of using battles to win the war.” Cited by Vincent Esposito 1972,712. 322 constant danger that means become ends in themselves.

Third, there must be knowledge of the means about how to reach the goal. Here ‘knowledge’ must be understood in its broadest meaning including the hypothesis as well. When you ‘take a boy and raise him a man’ you can not be sure if your methods give the supposed results, but you base your efforts on the knowledge of the methods you believe to be appropriate.

Fourth, there must be an understanding of an organisation’s own identity. Goal and knowledge are not enough. There has to be a mutual concern that this organisation exists to fulfil a need. Thus, identity, in relation with mission, also contains the element of vocatio.

Fifth, these previous elements are sacralised in the symbols, values and norms of the organisation. These guide the organisation in its decision making. Together they form the organisations belief system.

BELIEF SYSTEMS are essential to many INGOs (YMCA included). INGOs are, to modify Ralph H. Turner and Lewis Killian’s expression, value-oriented movements1. A value- oriented movement develops its own belief system which contains some kind of a creed, sacred literature and myths2. The function of a creed is to sacralise the cause of the movement. It gives a world view (or in Durkheimian terms, shared interpretation) that constitutes the frame in which the movement acts.

The belief system (or world view) includes explanations of the world and its inhabitants, their origin and purpose. Juha Manninen has defined that the

1 Turner & Killian 1957,326f. 2 Blumer 1953,210. 323 world view1 contain opinions of

1. Time and space 2. Genesis of the world, the supernatural, its consequences, existence or non-existence 3. Nature and human's relation to it, nature as a context of life 4. The human himself, his relations to others 5. Structure of society, people, state and determinants of the 2 rules in history.

The intensity and centrality of the belief system varies in different organisations. If an organisation is related to an established religion the belief system may have been taken as given and it is not the main concern of the organisation although it lies behind all actions. If the organisation claims to be value-free, the civil religion3 of the society, in general, directs its preferences. Organisation’s ideology4 can also come from a rivalling belief system, like from some sub-culture, counter culture, revitalisation movement or political ideology. In such cases the belief system has a central role in the organisation. Quite often the belief system reflects the era of the movement or organisation formation.

Manninen also makes, following Wittgenstein, a distinction between change in the world view and change of the view. The analogy is a river that either moulds its bed or brakes its barriers into a new bed. If the change remains in the bed, then the change is not central. However, if the change goes over its boarders, ”then it is

1 Although Manninen makes, following German thinking, a separation between world image, weltbild (raw data that our senses recognise) and world view, weltanchauung (world image and values), he uses weltbild with such a broad meaning that it is practically equivalent to world view. In English world view literature there is no such distinction. 2 Manninen 1977,16f (my translation). 3 The concept is from Robert N. Bellah 1970(1967). 4 The difference between world view and ideology is, according to Manninen, that the previous can be a belief system of an individual or a group, but ideology is always a common construction. Manninen 1977,25. 324 a question of the emergence of a new world view.”1

The world view may be clearly defined in doctrines of an ideology, religion or philosophy but it also can remain unstructured. Cassirer's theory of the phases of linguistic development explains the difference. For Cassirer, myth and ritual are predecessors of symbols. ”Myth is the epic element in primitive religious life; rite is the dramatic element2.” In the case of organisations, this means that many elements of the belief systems are not presented in an organisation’s ideology but remain on a pre-linguistic level. This leads a scholar to focus on an organisation’s rituals and the beliefs that they carry. These pre-linguistic forms of a belief system play a crucial role among the rank-and-file members. Herbert Blumer pointed out, already in 1953, that in social movements there are different sets of ideology for leaders and followers:

The ideology of a movement consists of a body of doctrine, beliefs, and myths… In the first place, much of it is erudite and scholarly. This is the form which is developed by the intellectuals of the movement… another… popular character… seeks 3 to appeal to the undereducated and to the masses.

Sacred literature contains normally writings of the movement intellectuals, stories of the heroes of the movement, descriptions of the gatherings and battles of the movement, hymnals, artifices, etc. The aim of all this is to create and maintain a feeling of us inside the movement.4

Myths interpret the raison d’être of a movement5. They are ‘truths’ that are not expressed in doctrines. However,

1 Manninen 1977,26f,30f (my translation). 2 Cassirer 1946,28. 3 Blumer 1953,210. In anthropology this is often called little tradition while the formal set of doctrines, symbols and their interpretation forms the great tradition. The distinction is from Robert Redfield 1989(1956),41ff. 4 Blumer 1953,209. 5 Blumer 1953,210; Lang & Lang 1961,537. 325 myth is not only a primitive phenomenon but as Sigbjørn Stensland interprets Cassirer: ”The interpretation of myth as belonging to the deepest level in human consciousness, indicates clearly that it is prior to conceptual language, and even prior to the emotional level1.” The content of myths are acted in the rites of a movement.

The elements of the belief system of an organisation are stored in its symbols. From these ‘stores’ they can be activated at the point of choice2. Especially at times when the environment changes and new strategies of adaptation are needed, the symbols function as constants to which new proposals are measured3. These symbols can be artifices, events, people, texts, or anything that the participants value as meaningful to their shared identity.

To understand this ideological corner requires careful study in the field of religious movements and their world views. One of the future tasks of third sector studies is to invite sociology of religion, comparative study of religion and theology to join in the nonprofit studies. This would enrich the studies especially in the field of ideology.

INTERACTION in the core is an ‘everything influences everything’ system. Identity influences beliefs by emphasising elements that are important to those who have a common identity. In some revival movements this phenomenon is called ‘the taste of the pot4’ which means that an individual or a group is modifying the gospel according to their personal interests. In the same way identity influences the mission: a group sees the mission of an organisation in the activities that are in line with

1 Stensland 1987,77. 2 Berger & Luckmann 1972,55. 3 Heinonen 1997,40. 4 The expression comes from St Paul: ”But we have this treasure in earthen vessels, that the exceeding greatness of the power may be of God, and not from ourselves” (2 Corinthians 4:7 ASV) 326 its needs.

A belief system defines, in part, the identity and the mission of an organisation. To say that an organisation is a Christian organisation identifies its members with the body of Christ and separates them from the world. Members of the organisation are part of the ekleesia, the universal church. The mission is, then, defined with Biblical terms and it should be legitimate from the perspective of Christianity. Often it means either preaching the gospel or serving one’s neighbour, but it can also be other religious or secular activities, like fostering Christian unity, fostering world peace, etc. The important point is that the identity and mission must be legitimated with the belief system.

Mission, in turn, influences other components in several ways. The identity tends to be equal with the group that is involved in the same mission. Missionary work has brought Protestant Churches together, YMCA and WSCF conferences brought young people together in the beginning of the 20th century and gave them a vision of ecumenism, YMCA work in war prisoner camps during the Second World War brought Christian ministers to work side by side and fostered mutual understanding. In these cases, sharing a common mission broke down barriers of different identities. However, there are also opposite examples. Aggressive proselytism of some Protestant churches and sects build barriers when the faith of others is not as good as the proselytist’s faith. In both cases the mission and emerging new identity must be legitimated in the belief system. 327

8.2.3. The Shell of an Organisation

In the shell of an organisation there are its adherency, structure, leaders and social objects (¡Error! Argumento de modificador desconocido.). According to Hannan and Freeman’s theory, the components of the shell do not have as high inertia than the core has. This means that Figure ¡Error! Argumento de these elements can change more modificador desconocido.: The easily and the change in the Shell of an organisation shell does not necessarily cause a change in the core.

ADHERENCY is the basis of an INGO. Without members there is no NGO status. As Zald and Klandermans have shown, the changes in the adherency create the potential for the change of the core. This can happen in several ways. First, identity is closely connected with adherency. When adherency changes new people bring their identities with them and mould the organisational identity, belief system and mission. In all cases this does not lead to changes in the core but creates a potential for the change. There may be hindrances that downplay the influence of new groups, and in such cases the potential may remain hidden. Such hindrances are, for example, structures that do not allow equal participation, economic dependency on some adherency fragment, the power of the prevailing belief system or leaders, etc.

Second, nearly always the changes in the adherency composition change the structure of an organisation. These changes range from mere organisational expansion to the total transformation of the structure. A remarkable expansion of an organisation leads to the need of extra 328 resources and administration. When an organisation expands, there will become a moment in which the old structure is not capable of handling everything and something new is needed. At the other end of the continuum there is the case of total takeover. New adherency occupies the organisation and transforms it to fit its own purposes1. In the same way, decline of membership may cause lack of resources and, in turn, reduction of the staff and facilities.

Third, new adherency may bring their own leaders to the organisation who may urge voice in the organisation and cause competition for power in the organisation. This, in turn, may lead to the extension of the board and staff. If the board is not extended, the competition makes these positions harder to access because of the relative scarcity of leading positions compared to the previous situation.

Fourth, new adherency may also bring their social objects to the organisation. This urges the organisation to reflect the set of its older social objects. If the works of a new hero are emphasised, it diminishes the relative position of the old ones. At least it creates plurality and this, in turn, has consequences on the identity and belief system.

However, not all segments of adherency have the same importance. Kurt and Gladys Engel Lang pointed out, already in 1961, that the adherency of a movement is comprised of several segments and the importance of these segments changes when the movement becomes older. They noted that there are early converts, active reinforcements (old fighters), joiners (those who come along when the movement gains respectability) and resisters (potential followers). On the other hand, in spite of the stage of

1 This is what happened in the Dutch Christian Peace Movement that Klandermans studied. 329 the movement or organisation, there is always the following distinction: core members, who do the actual jobs and spend their spare time in the movement or organisation; rank and file members, who attend at meetings, participate in activities, use slogans of the movement and believe in its ideology; and those who are not clearly inside or outside and whose support can be mobilised occasionally.1 Thus, there is a difference if a new cadre of rank and file members join the organisation and if a new cadre of activists join.

In the case of federal INGOs the influence of new segments of adherency is not direct because international federations do not have individuals but other organisations as members. However, the inclusion of new organisations, especially from new areas, create similar potentials as in the cases of individual membership.

LEADERSHIP is another element of the shell of an organisation. Herbert Blumer divided the leadership in social movements into four classes that follow the stages of a movement. In the beginning there is a need for agitators, then come prophets and social reformers. When the time passes, the movement needs statesmen and finally administrators2. This classification can be partly valid in INGOs as well. However, this classification focuses mainly on individual leadership and does not deal with the collective leadership that is central in Zald’s theses. Additionally, there are informal leaders who do not have central positions but who, in fact, influence organisations behaviour. The social composition of boards and committees, on one hand, and the relationships between staff, committees, and informal leaders, on the other, defines the leadership in the organisation.

The leadership moulds the organisation in several

1 Lang & Lang 1961,525f. 2 Blumer 1953,203. 330 ways. At the core level, the leadership influences how the identity, mission view and belief system are formulated. Ron Eyerman and Andrew Jamison have emphasised the role of movement intellectuals in the creation of the ideology of an organisation1. Intellectuals give the words that describe the raison d’être of the movement. Moreover, staff and other leaders formulate the proposals to committees and general assemblies. Additionally, some decisions are made by themselves. Thus, leaders have a central role in the modification of bases and statements of an organisation. Even if the belief system is based on some religious or ideological doctrines, the leadership can emphasise some elements of the belief system. If the organisation is based on charismatic leadership, the role of the leader is even greater. The whole core may be centred around the personality of the leader.

In the shell level, the influence of the leadership is mainly on the structure of the organisation. In a way, leaders mould the organisation according to their preferences and ways of working. While they have a right to modify the every day practices, their proposals on the structure are normally taken seriously. Additionally, the changes of the structure are often results of the changes in the leadership which, in turn, may result in the composition of active core members or different coalitions among them. However, leadership has influence on the adherency as well. A leader gives face to the organisation and serves as an advertisement of the organisation. Especially charismatic organisations are dependent on their prophets but the phenomenon is not foreign in other kinds of organisations, either. A good example is the role of Mother Teresa who is better known than her order. In her case she also serves as a symbol of the organisation. This is also one way of how leaders influence the shell of the organisation. Many leaders have become heroes or martyrs of their organisation or movement and thus serve

1 Eyerman & Jamison 1991,98f. 331 as social objects of the cause.

THE STRUCTURE of the organisation, in turn, influences the other elements of the shell. Changes in the structure alter the power stability in the organisation and bring new segments of adherency (and drop some others) to the decision making bodies. Thus, the most important aspect in the change of the structure is its influence on the composition of leadership. However, sometimes it is hard to say which comes first, the chicken or the egg. New structure and new leadership are bound together.

Another issue is the link between the ideology and the structure. Especially in Reformed theology the form is often part of the dogma. Thus, in that case the modifications of the structure are matters of the core, not only of the shell. In Catholic and Lutheran theology such close connection does not exist and, thus, structural issues are matters of earthly organisation.

SOCIAL OBJECTS of an organisation contain holy or respected people (heroes, martyrs, victims), holy places (towns, houses, sites), holy times (special days, weeks, years), artifices, customs and rituals1. The change of these objects is mainly inclusion of new ones but sometimes abandonment of the old ones. The inclusion of new objects is not as dramatic as abandonment because the latter means that the organisation has to cut off something that has been part of it. This supposedly leads to serious reflection of the core issues as well.

1 Lang & Lang 1961,291-331. 332

8.2.4. Organisational Environment

Organisational environment is constrained basically by three kinds of phenomena. There are supportive, constraining and neutral elements. Supportive elements include supporters, resources and opportunities. Constraining elements include adversaries, costs and constraints. Finally, neutral elements include Figure ¡Error! Argumento de modificador desconocido.: the public and Organisation onion authorities. All of these together form opportunity structures of an organisation (¡Error! Argumento de modificador desconocido.).

SUPPORTIVE ELEMENTS help the organisation to survive and complete its mission. Both economic theories and ecological theory of organisations point out the importance of the resources of organisations. Economic theories see the entire sector as an exchange process where economic rationality plays a major role. Although this view is quite limited, it is obvious that economic calculations play an important role in INGOs as well. Here 333 a scholar focuses on the basic questions: ‘Is there enough money for the intended purpose?’, ‘Where does the money come from (donations, subsidies, fees)?’ and ‘What is the allocation of resources within the organisation?’ Additionally, it should be asked if available resources are tied to some activity. Resources form economical opportunity structures of an organisation.

However, the economic resources are not the only resources needed in an organisation. Human resources are as important. An organisation uses the skills and knowledge of its leaders and adherents. Additional to them, an organisation may have passive sympathisers who support the goals of the organisation without being involved in it. Supporters of an organisation have a crucial role in the legitimation of the organisation. They are that fraction of the public that has a positive attitude towards the organisation. If this support is missing the legitimacy of the organisation is threatened.

Opportunities can mean either all supportive elements or carpe diem -type moments that are combinations of various factors. Some of these moments favour the activities of the organisation and enable it to do its work. There may, for example, be a need for the skills and services of the organisation. A good example is the refugee services that were needed after the Second World War. The YMCA had experience in both immigrant work and work with prisoners of war. After the war many of the ex- prisoners became refugees and the concentration camps became refugee camps. The YMCA was already there and the experience was transformed into the service of refugees. It was a question of being in right place at right time. Other types of opportunities are linked to the zeitgeist of the time. Some historical periods favour some activities and some do not. For example, the attitude towards religion has been more positive in the 1990s than 30 years earlier. 334

Constraining elements are those that threaten the existence and work of the organisation. Social movements have quite often a counter movement that oppose the goals of the movement. When many INGOs are actually SMOs they have similar adversaries. Religious organisations compete against anti-religious ones and against those of different religion, anti-abortion movements fight with feminist organisations, etc. Of course, the intensity of the fight varies greatly. It can be supposed that the work on the international level requires some institutional stability and this, in turn, means that rivaling organisations have to behave according to civilised norms. However, the influence of an adversary group may emerge if its members have official positions in organs that are important to the organisation. Another way of how adversary groups can influence is through the public identity of the organisation. Counter organisations often try to downplay the reputation of the organisation in order to reduce its legitimacy and support.

Costs and constraints of an organisation form a major obstacle to its work. Arguments of effectivity claim that organisations thrive to cut their expenses and reduce their costs. This tendency has implications both on the core and the shell levels. On the core level, costs, combined with resources, lead the mission by stating what is possible and what is not. On the shell level, they influence the structures and number of staff. Constraints have similar effects. Important forms of constraints are rejection and competition. Some contexts reject the organisation, for example, because of ideological reasons. In other contexts the competition is so hard that the organisation does not have possibility to enter there.

NEUTRAL ELEMENTS are as important as supportive and constraining ones because neutral elements have the possibility to become either supportive or constraining. The zeitgeist can influence the public and authorities 335 towards forming a positive attitude towards the organisation, and thus there is a constant campaign to present an organisation’s public image as positively as possible. As the institutional theory states, the organisation has to follow the customs and rules of its environments. Often this means that the organisation moulds its shell and even core in such a way that it gains legitimacy.

In the case of federal type INGOs the context is problematic. It differs from local and national contexts because INGOs do not have one single context where they work. The context of a federal INGO consists of three components. First, there is their own national level. When the organisation adapts itself to different national contexts, there will be great variation among its national organisations. Some national organisations are big and powerful and some weak and dependent on the support of the strong ones. The adaptation also affects the understanding of both the role of the whole organisation and the role of an INGO. Second, the majority of the INGOs work in the context of international organisations. Many of them are located in Geneva. The staff of the UN, other IGOs and INGOs form an international society where people meet their friends, colleagues and countrymen in various ways. These contacts form a network which, on one hand, homogenises the policies and, on the other, facilitates the flow of new innovations. Third, the megatrends or zeitgeist of the time touch the INGOs as well. The role of the public is extremely important for organisations which rely on public support. All of these form the political and cultural opportunity structures of an INGO.

Often the INGOs are formed by religious bodies1 in order to gain some goals that the parent organisation is

1 Here ‘religion’ should be understood in the widest meaning of the concept including ideologies and different types of civil religion. See Smart 1983; 1989. 336 hesitant to do by itself. We also have to note that, in the case of religious organisations, the context may be religious. Although culture and religion are closely tied together, they are not the same and neither of them is a sub-category of the other. Great world religions have adapted themselves to different cultures and one culture can have several religions. Thus, culture and religion are partly overlapping concepts

Religions can facilitate or limit the expansion and existence of an INGO several ways. First, if a religion sees the INGO as a representative of a rival religion or ideology, it can fight against the INGO. On the other hand, if the INGO is seen as an ally, the religion can supply resources to it. Second, religion does not necessarily need to define its attitude towards an INGO. Namely, religions also supply many of the basic concepts of the hosting culture. Thus, the concepts that an INGO uses can be either familiar or alien to people in the areas where the INGO works. World views can facilitate or limit the possibilities of INGOs. Sometimes people with different world views do not understand each other at all. Third, linked to previous items, religions also serve as value memories of their hosting cultures. Thus, the goals of an INGO are valued through the value systems of different religions. All of these facilitations and constraints form the religious opportunity structures of an organisation.

Opportunity structures are not, as I have already stated, determinants of action but possibilities. They form both rules of the game and determine the possible actions. The analogy of chess illustrates opportunity structures quite well. There are several choices of which some are good and some bad, but the player makes the final choice of what to do in a situation. Of course, sometimes the positions limit the choices in a way that it can be said that they force certain actions (as in the case when 337 the king is threatened and there is only one possibility to make a move). Economical and political opportunities are external constraints to any action. On the other hand, religion and culture are more internalised and they constrain the actions of people more fundamentally. Men take the values and norms of their beliefs and culture for granted and the values limit the organisation’s possible actions. In a similar way, organisational identity and its mission constrain its possibilities

Mission, identity and beliefs do not only limit the opportunities but may also expand them. People do not calculate rationally the tasks they get involved in. Religion and ideology push people to do something because they have a vocation - not because they benefit from the action. If people would calculate their actions, much would not be done. The other way by which mission, identity and beliefs expand the opportunities of an organisation is by the personal networks1. As Hall notes2, the evangelicals in America created networks that helped the organisational growth. Networks help an organisation to gain legitimacy, to find new resources and to receive new innovations. Additional to religious and ideological networks, other main sources of personal networks are ethnical and professional ties.

8.2.5. Reflection on the Theory of INGOs

The core, the shell and the context of an organisation are in constant interaction. All elements seem to influence each other. This means that different phenomena cannot be reduced to just one or a few determinants. Instead, a scholar has to be sensitive to notice what the determinants are in a certain place and moment. The theory that I have presented above is a heuristic device to identify the important phenomena in organisations. It is

1 See McPherson’s arguments in chapter 5.4.2. 2 See chapter 2.4. 338 not a classification or systematisation of phenomena but more like Wittgenstein’s family picture. These elements can be identified in organisations but in different forms. The dilemma of this kind of picture is, like Salamon and Anheier argued in the case of classifications1, that the more general the applicability, the more it simplifies the phenomena. Vice versa, when the picture is detailed, it has less value as a general device when all organisations become cases per se.

In this study I have started on the basis of third sector studies and the findings in that research field. Third sector studies acknowledge the importance of religion and ideology in voluntary organisations, but there is still much to theorise about how religions influence third sector. For example, there are no comparative theories on the different impacts of various belief systems on voluntary organisations. This is why I have included theoretical elements from social and religious movement studies as well as from world view studies. In these studies there has been research on identity, world views and mission. I think it is time to break the barrier between these studies and join the theoretical ‘pearls’ together.

1 See chapter 7.3.2. 339

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365

Index

voluntary action; 7; 160; 295; 352; 360 4H; 256 adaptation; 48; 145; 146; 173; 178–93; 194; 195; 200; 201; 204; 207; 312; 318; 325; 335 6, Perri; 55; 75; 87; 339; 357 adherency; 121; 133; 152; 153; 161; 189; 190; 203; 205; 213; 252; 256; 317; 318; 327; Abrahamson, Alan J.; 44; 53; 358 328; 329; 330; 331; 333.See also members Aburdene, Patricia; 134; 248; 355 administration; 168; 170; 190; 327 Abzug, Rikki; 88; 89; 339 administration costs; 161; 226 accountability; 161; 166; 167; 198; 352 administration legislation; 52; 100; 160; 161 Achtemeier, E.R.; 23; 339 administrative dilemma; 167 action; 130; 162; 186; 189; 212; 258; 295; 323; administrative fiat; 75 336; 337.See also behaviour administrative skills; 40; 42 activities; 77; 154; 206; 253; 312; 325; 333 administrative system; 199; 292 grassroots activities; 44 bureaucracy; 51; 53; 66; 117; 121; 139; 144; international activities; 244; 279 161; 165; 169; 174; 175; 177; 180; 202; political activities; 165 214; 218; 234; 248; 262; 273 primary activities; 231 church administration; 48 public activities; 104 crisis administration; 119; 120 social activities; 183; 238 independent administration; 87 technical activities; 215 oligarchy; 68; 177 transformation of activities; 110 public administration; 8; 12; 24; 32; 33; 35- collective action; 97; 159; 162; 163; 203; 37; 39; 40; 42; 44; 52-55; 66; 70; 79; 85; 225; 355; 356; 362; 363 86; 100; 105; 117; 119–21; 137; 161; individual action; 14; 22; 23; 25–7; 64; 74; 165; 167; 169-171; 174; 218; 248; 273; 83; 84; 126; 141; 170; 203; 220; 221; 274; 287; 293; 344 223; 224; 240; 241; 245; 305; 306; 337 American administration.See United interaction; 8; 171; 180; 214; 246; 302; 306; States 318; 337 British administration.See Britain external interaction; 17; 59; 63; 66; 207; EU administration.see Europe 214; 218; 313 Adult Education Departement of the Ministry grassroots interaction; 11 of Education of Finland; 4 internal interaction; 59; 213; 325 Adventism.See Christianity:Protestantism monetary interaction; 142 Aejmelaeus, Anneli; 23; 339 private interaction; 100 agitator; 329 social interaction; 65; 69 Ahonen, Risto; 283; 347 symbolic interaction; 237 Alasuutari, Pertti; 12; 339 market action; 26; 55; 65; 81; 87; 116; 174; Aldrich, Howard E.; 144; 146; 177; 178; 201; 182; 225; 289; 300 339 nonprofit action; 43; 54; 55; 79–81; 83; 85; Alexander, Jeffrey C.; 58; 339 117; 118; 120; 128; 139; 149; 160; 163; Alford, Robert R.; 91; 339 181-183; 186; 187; 198; 208; 216; 218; Allen, N.J.; 236 219; 231; 252; 267; 272; 273; 277-280; Allen, Natalie J.; 340 283; 289; 298; 299; 300; 301; 303; 319; altruism; 16; 128; 145; 178; 220–23; 232; 236; 321; 329 237; 243; 245; 305; 314; 357 political action; 65; 162 altruistic behaviour; 223 private action; 100 evolutionary altruism; 221 rational action; 129 venacular altruism; 221 regulation of action; 43 Amnesty International; 225; 271 religious action; 25; 27; 40; 52; 79; 187; ancient 213; 239; 273; 283; 289; 294; 309; 311; antiquity; 22; 25; 29 326 Egypt; 23 state action; 7; 26; 44; 160; 253 etymology; 58; 60 strategies of action; 26 Gallia; 28 transaction; 99; 122–4; 126–9; 167; 168; Germany; 28 220; 348; 351 Greece 366

education; 29; 354 membership fee; 288; 299 philanthropy; 22 participants; 181; 190; 289; 300 polis; 58; 60 professional associations; 279; 286; 288 Hammurabi Law; 23 religious associations; 11; 213; 274; 280 institutions; 22 sororities; 117 Judaism; 22; 23; 24; 354 sports associations; 256; 286 education; 29 veterans' associations; 226 Jewish family; 24 youth associations; 164; 190; 201 Jewish kingdom; 24 atheism; 9 Jewish revolt; 25 attitudes; 9; 14; 30; 32; 38–40; 43; 47; 64; 127; philanthropy; 22–6; 29; 352 171; 173; 184; 213; 236; 237; 252; 253; religious authorities; 24 261; 295; 309; 333; 334; 336.See also sects; 23 altruism Orient; 22; 23; 361 Australia; 282; 286 people; 100 Austria; 198; 282; 287 Rome; 29; 119 education; 29; 354 Bachmeier, Mark D.; 239; 241; 349 salary; 24 Badelt, Christoph; 99; 100; 122; 127; 341 Scandinavia; 28; 32 Barber, Bernard; 8; 341 Urukagina Law; 23 Barnes, Barry; 8; 341 Andrews, F.Emerson; 43; 340 Bauer, Rudolph; 120; 201; 262; 263; 341 Anglican Church.See Beck, Ulrich; 134; 341 Christianity:Protestantism behaviour; 156; 209; 210; 211; 314 Anglo-Saxon countries; 20; 35–43; 75; 86; 90 altruistic behaviour; 221; 223 Anheier, Helmut K.; 16; 19–21; 28; 33–35; 39– behaviour theories; 98; 99; 134; 138; 146 41; 51; 53–6; 81; 82; 86; 100; 103; 105; collective behaviour; 13; 214; 341; 355; 112; 115; 116; 119; 123; 125; 129; 135–7; 360; 363 144–50; 152–8; 164; 171; 185; 245; 247–9; donating behaviour; 125; 224 258; 259–79; 281–99; 301–3; 305; 307; economic behaviour; 142; 308 338; 340; 344; 359 helping behaviour; 111; 349 anomie; 237 individual behaviour; 305 Anttonen, Anneli; 39; 340 organisational behaviour; 16; 17; 87; 98; 99; Aquinas, Thomas; 222; 340 115; 128–34; 143; 145; 146; 148; 149; Arato, Andrew; 58; 59; 60; 62; 63; 65; 343 167; 177; 178; 213; 218; 256; 257; 262; Archambault, Edith; 85; 86; 341 296; 311; 315; 329 aristocracy; 20; 29; 31; 32; 36; 70 religious behaviour; 257; 342 Aristotle; 34; 35; 47; 58; 66; 151; 223; 341 Belgium; 87; 282; 283; 287; 290 Arrow, Kenneth; 109; 341 belief; 12; 46; 47; 257; 310; 324; 325; 337 asceticism; 41; 153 belief system; 108; 153; 213; 310; 316; 317; Aspinjaakko, Marjut; 4 320; 322–8; 330; 337; 338 associations; 7; 36; 37; 39; 49; 52; 54; 57; 62; cultural belief; 21 63; 65; 68; 71; 73; 81; 82; 85; 86; 90; 91; faith; 252; 258; 309; 326; 339 96; 100; 117; 135; 139; 140; 149; 152; 163; freedom of belief; 64 180; 184; 186; 187; 189; 191; 192; 199; generalised belief; 203 201; 214; 221; 225; 226; 229; 230; 231; ideology; 16; 19; 38; 67; 68; 83; 107; 108; 247; 248; 253–5; 263; 268; 269; 272; 274; 120; 137; 147; 154; 157; 160; 166; 184; 276; 279; 289; 306.See also 204; 234; 252; 258; 269; 287; 308; 311; nongovernmental organisations(NGO); 313; 315; 316; 323–5; 329; 330; 331; nonprofit:nonprofit organisations(NPO) 334; 336–8.See also ideas activities; 43; 44; 54; 55; 120; 128; 182; ideological sector; 67; 114 183; 186; 187; 198; 206; 213; 216; 244; in local responsibility; 36 279; 280; 289; 298–300; 311; 312; 319; institutionalised beliefs; 208; 312; 361 321 myth; 208; 312; 324; 343; 355 members; 53; 117; 126; 156; 179; 182–4; religious belief; 14; 152; 252; 330 186; 191; 215; 231; 244; 255; 266; 288– world view; 7; 9; 56; 191; 322; 325; 358 90; 299–301; 328–30; 334 Bellah, Robert N.; 323; 341 membership associations; 107; 118; 142; beneficiaries.See philanthropy 156; 212; 231; 259; 288; 289; 298; 299 benevolence; 220 367

Benford, Robert D.; 153; 313; 318; 341; 348; Chambliss, J.J.; 31; 33–6; 343; 349 361 change Ben-Ner, Avner; 123–6; 341 in adherency; 189; 190; 199; 201; 203; 317; Berger, Peter L.; 11; 28; 46; 208; 325; 341 318 Bismarck, Otto von; 34 in leadership; 179 Black, Anthony; 57; 58; 341 in mission view; 7; 199; 203; 220; 240; 264; Bloor, David; 8; 341 317; 318 Blumer, Herbert; 322; 324; 329; 341 in opportunity structures; 23; 160; 196; 197; Boulding, Kenneth; 101; 342 247; 317 Bourdieu, Pierre; 8; 342 in organisation structures; 19; 198; 199; bourgeois society.See civil society 253; 316; 317 Bowen, James; 29; 30; 31; 35; 346; 354; 358 of public - private determination; 269 Brand, Carl; 38; 342 organisational change; 178; 189; 192; 197; Brand, Karl-Werner; 163; 342 198; 200–3; 225 Brazil; 275; 276 proposed change; 198 Brewster, Kingston; 144; 342 speed of change; 197–9; 317 Britain; 33; 36; 38; 66; 172; 247; 260; 261; charisma; 202; 204; 295; 311; 330 265; 275; 281–3; 286; 287; 299; 362 charity; 22; 23; 26–28; 30; 37; 74–8; 83; 97; British Commonwealth; 55 117; 160; 363.See also philanthropy, poor education; 35–38 relief Elizabeth I; 35; 37; 75 as a religious act; 23; 27; 238; 239 Henry VIII; 35 charities; 55; 74–7; 81; 96; 155; 158; 162; Justice of the Peace; 36 247 Labour Movement; 38; 342; 357; 361 charity good; 125 London; 183; 184; 187 charity legislation philanthropy; 28; 35; 90; 117; 158 British charity legislation.See Britain Poor Law Act; 263 Charity Law countries; 55; 75; 158 Statute of Charitable Uses; 37; 75; 158 individual charity; 22–27; 44; 74; 84; 296; public administration; 35–7; 44; 55 346 Queen; 294 kuppah; 24 religion tamhu’i; 24 Anglican Church; 38; 294 Charlemagne; 30 Methodism; 38 Charng, Hong-Wen; 221; 222; 357 Student Christian Movement(SCM); 188 choice Royal Society; 35 charitable choice; 343 welfare model; 28; 35–39; 44; 345; 362 choice possibilities; 228 Wolfenden Committee; 171; 364 choice processes; 126; 142; 325 voluntary associations; 37 ethical choice; 8; 65 voluntary sector history; 35–38; 44 ideological choice; 269 Bromley, E. Blake; 19; 36–38; 76; 77; 342 individual choice; 98; 126; 141; 306 Brown, Richard Harvey; 14; 342 institutional choice; 55; 99; 100; 104; 109; Bruce, Steve; 306; 342 113; 114; 127; 167; 173; 220; 252; 256; Buchanan, James M.; 101; 102; 162; 342 264; 307; 341 Buddhism; 253 organisational choice; 146 bureaucracy.See administration possibilities of choice; 127 Burns, Tom; 180; 342 rational choice; 98; 126; 141; 177; 220; 224; Burrell, Gibson; 14; 177; 342 242; 305; 306; 342; 348 Bush Zetterberg, Karin; 57; 342 Christianity; 107; 183; 223; 259; 295; 347 bürgerliche Gesellschaft.See civil society Bible; 22; 23; 31; 32; 38; 41; 187; 238; 326; 339; 352 Caesar; 119; 170 bishop; 30; 351 Canada; 186; 351 Catholism; 352 Montreal; 67; 355 Canonic Law; 75; 158 capitalism; 20; 42; 46; 62; 86; 221; 259 Catholic Church; 28; 30; 38; 54; 170; car-pools; 54 213; 263; 310 Carroll, Glenn R.; 146; 194; 313; 342 Catholic countries; 34; 47; 86; 263; 282; Cassirer, Ernst; 126; 305; 323; 324; 343; 361 283; 295; 309 Cedergren, Hugo; 120; 343 Catholic organisations; 271 368

Catholic theology; 35; 331 Anglican Church; 38; 294 Catolics; 183 Anglican countries; 310 fraternities; 26; 27; 30; 90; 105; 117; 118 Anglican social ethics; 38 mass; 152 Baptism; 40; 347; 348 Pope; 48; 119; 170; 273; 294 Calvinism; 31 Leo XIII; 34 Conservative Protestants; 238 Pius XI; 34 denomination; 40; 153; 363 social ethics; 29; 34; 263 evangelical network; 40; 42 Christian Enlightenment; 354 free churches; 53 church; 12; 19; 20; 25–8; 30–4; 37–41; 48; Huguenots; 216 53; 54; 59–62; 64; 71; 73; 76; 78–81; 87; Lutheran church; 11; 31; 33; 52; 128; 90; 99; 106; 109; 118; 121; 125; 148; 239; 283; 284; 294; 301; 347 153; 158; 161; 163; 170; 174; 182–5; Lutheran countries; 32; 36–8; 47; 309 187; 188; 193; 202; 216; 227; 238; 239; Lutheran social ethics; 30; 32; 38; 39; 244; 248; 255; 269; 271–4; 280; 282; 294 283; 294–6; 298; 303; 308–11; 326; 355; Lutheran theology; 331 356; 363 Lutheranism; 11; 307; 345 church administration; 48 Methodism; 38; 363 church legislation; 30; 32; 76; 292 nonconformist churches; 38 church membership; 41; 239 Pentecostalism; 274 church role; 29 Pietism; 31; 32; 362 church tax; 48 Protestant countries; 158; 295 Established Church; 38; 40; 52–4; 294 Puritanism; 40; 41 DCPM.See Dutch Christian Peace Reformation; 30; 31; 158; 346 Movement(DCPM) Salvation Army; 188; 274 Ecumenical movement; 364 revival movements; 7; 15; 38; 40–42; 67; Evangelical Alliance; 202 107; 188; 238; 325; 337; 362 Inter-Varsity Fellowship; 188 sect; 41; 121; 153; 188; 202; 296; 326 Student Christian Movement(SCM).See Sunday Schools; 238 World Student Christian church failure; 121; 308 Federation(WSCF) church-sect theory; 41; 153; 202 World Council of Churches; 49; 161 Cicero; 58; 59; 343 YMCA.See Young Men’s Christian Cincinnati; 119 Association(YMCA) citizens; 29; 36; 37; 44; 58; 59; 64; 70; 72; 76; YWCA.See Young Women's Christian 77; 119; 173; 348; 356 association(YWCA) civic leagues; 81; 155 Finnish Lutheran Mission; 107 civil servants; 32; 33 Helsingin Diakonissalaitos; 307 civil society; 7; 19; 57–67; 69; 70; 73; 74; 77– holy city; 26 80; 84; 88; 91; 119; 120; 151; 153; 156; International Fellowship of Evangelical 171–6; 260; 268; 274; 277; 293; 296; 297; Students (IFES); 188 302; 308; 314; 339; 341–5; 351; 352; 359; Jesus; 24; 325 363 land of the church; 30 civilisation; 21; 47; 49; 59; 61; 197; 308; 348 mission; 40; 41; 103; 213; 253 Clary, E.Gil; 234; 240; 343 monastic orders; 26; 27; 30; 90; 105; 152; class; 56; 165; 343 309 bourgeois class; 64 Muscular Christianity; 354 lower class; 41; 121; 153; 251 organisations; 7; 11; 12; 15; 32; 41; 73; 109; middle class; 70; 184; 293; 306; 342 120; 142; 152; 161; 179–89; 191–3; 197; upper class; 41; 153; 251 198; 200–2; 204; 212–6; 225; 231; 238; working class; 21 244; 256; 271; 279; 280; 288; 290; 315; classifications; 8; 41; 53; 55; 100; 162; 167; 317; 320–2; 325; 326; 333; 340; 343; 212; 266–8; 280; 289; 298; 299; 314; 329; 344; 351; 352; 359; 361; 364 337; 359; 363 Orthodoxy; 54; 283; 295 General Industrial Classification of parishes; 11; 26; 27; 35; 36; 52; 238 Economic Activities(NACE); 277; 278 philanthropy; 25–7; 121; 213 International Classification of Nonprofit Protestantism; 32; 38; 46; 213; 326 Organisations(ICNPO); 278; 279; 288 Adventism; 274 369

International Standard Industrial research community; 90; 97 Classification(ISIC); 277; 278; 288; 298 rural community; 234 National Taxonomy of Exempt companies.See for-profit organisations(FPO) Entities(NTEE); 150; 277; 278 comparative international studies; 8; 16; 25; 55; Clausewitz, Karl von; 321 90; 100; 109; 113; 144; 145; 220; 247–302; client; 124; 131; 132; 133; 137; 148; 166; 180; 305; 340; 341; 349; 350; 356; 359 189; 209; 210; 252; 254; 262; 310 competing values framework; 133; 357 closed system; 170 competition; 10; 39; 133; 137; 139; 147; 159; closed system rational view; 144 207; 252; 296; 320 closed system structuralism; 177 competition models; 195; 196 Club of Rome; 135 unfair competition; 55; 165 clubs; 32; 62; 101; 111; 113; 162; 342; 347 Comte, Auguste; 9 Kiwanis; 347 conservatism; 38; 43 Lions; 347 constituency.See adherency Rotaries; 347 consumer; 106; 109; 112; 114; 122; 123; 126; Cnaan, Ram A.; 227–32; 238; 239; 310; 343 173; 209; 254 Cohen, Jean L.; 58–60; 62; 63; 65; 70; 343 co-operatives; 81; 125; 152; 270; 276 Cold War; 72 protection; 104; 111; 115; 116 Coleman, James S.; 30; 343 context; 46; 67; 134; 149; 178; 212; 229; 317; collective action.See action 323; 337.See also environment collective interpretation.See shared contextual variables; 234; 242; 257 interprtation cultural context; 10; 23; 48; 66; 82; 114; Colombia; 282; 283 167; 257; 259; 334 commercial nonprofits.See nonprofit:nonprofit economic context; 156 organisations(NPO) geographical context; 11; 167 Commission on Private Philanthropy and historical context; 167 Public Needs; 51; 96; 97; 102; 144; 345 international context; 72; 108; 116; 156; Committee on Law and Practice Relating to 157; 176; 216; 257; 258; 335 Charitable Trusts; 160 legal context; 157; 224 common responsibility; 33 political context; 48; 66; 157; 301 commons; 150–54; 156; 265; 352 religious context; 40; 47; 161; 216; 257; communication; 7; 19; 65; 293 259; 336 Communism; 19; 38; 143; 262; 283; 286; 288; research context; 17; 167; 171; 176; 188; 301; 310 217; 243; 246; 312; 315 communitarism; 57 contingency theory; 177; 189 community; 23; 24; 27; 34; 35; 53; 54; 59; 71; contract failure; 109; 110; 113; 220 76; 106; 107; 145; 151; 156; 162; 178; 179; contributions; 81; 96–8; 110; 111; 123; 124; 186; 205; 206; 212; 216; 228; 243; 277; 159; 182; 224–6; 238; 255; 345 300; 352.See also municipalities co-operatives; 27; 51; 54; 57; 73; 81; 82; 85–7; black communities; 355 90; 91; 101; 108; 125; 152; 162; 163; 248; communal charity fund.See charity:kuppah 249; 257; 259; 270; 275; 276; 296; 298; 349 communal enterprises; 86 Corbett, Julia Michell; 40; 343 communal service; 24; 53 corporations; 36; 40; 53; 110; 112; 114; 116; communal soup kitchen.See charity:tamhu'i 259; 288; 291; 307 community betterment; 276 costs; 43; 82; 97; 99; 101; 102; 110; 112; 135; community centre; 125 143; 159; 162; 197; 224; 229; 237; 241; community characteristics; 234 245; 252; 306; 349 community ecology of organisations.See administrative costs; 122; 154; 161 ecological theory cost accounting; 78; 83; 97; 101; 138; 241 community emergencies; 78 hospital costs; 43; 345 community organisations; 73; 91; 125; 182; opportunity costs; 227 230; 234; 275; 346 start-up costs; 111 community relationships; 23 transaction costs; 99; 122; 123; 126; 127; community-wide missions; 41; 152 167; 220; 351 interest-based communities; 156; 252; 256; Craft, Elizabeth A; 239; 241; 349 314 cuius regio eius religio; 38 political community; 113 religious communities; 41; 152; 274 370 culture; 34; 48; 56; 95; 173; 247; 278; 279; excess demand; 250; 251 282; 283; 286; 288; 300; 336; 337; 355; democracy; 21; 32; 33; 39; 43; 45; 55; 57; 64- 356; 362 67; 71; 85; 148; 159; 161; 180; 184; 201; as a tool kit; 26 221; 262; 292; 295; 297; 307; 355; 362 cultural context; 8; 10; 167; 206; 217; 221; civil democracy; 357 257; 291; 297; 302; 307; 350 democratic control; 55 cultural crisis; 264 democratic processes; 161 cultural frames; 10; 26; 45; 46; 49; 50; 56; direct democracy; 45 89; 221 hierarchial democracy; 71 cultural goods; 344 liberal democracy; 149 cultural historical studies; 27 Nordic democracy; 32; 33 cultural identity; 108; 319 parliamentary democracy; 64 cultural institutions; 65 pluralistic democracy; 159 cultural leaders; 42 demography of organisations.See ecological cultural megatrends.See zeitgeist theory cultural memory; 167.See also value- Denmark memory Lutheran Church; 33; 53; 345 cultural needs; 107 denomination.See Christianity:Protestantism cultural opportunities; 212 Denton, Patricia; 179; 183; 184; 185; 188; 189; cultural opportunity structures; 335 225; 364 cultural organisations; 25; 62; 81; 147; 155; developed countries; 136; 259; 282; 286 164; 251 development; 73; 126; 275; 278; 279; 286; cultural politics; 63 293; 320; 348; 363 cultural roots; 19; 20; 21 Dharma Law.See Hinduism cultural streams.See zeitgeist diffusion cultural studies; 313 of ideas; 161; 309 cultural unit; 151 of innovations; 19; 309 cultural values; 207; 213; 235; 238; 244 of megatrends; 170 cultures; 22; 23; 26; 40; 48; 74; 89; 108; of organisation; 350 264; 290; 313; 319; 336; 346; 358 DiMaggio, Paul J.; 16; 40; 41; 81; 103; 125; academic cultures; 8; 364 137; 144; 146; 147; 148; 149; 150; 152; bourgeois culture; 62 153; 154; 155; 156; 157; 185; 207; 209–12; classical cultures; 21; 354 216; 245; 305; 344 counter cultures; 323 Dodds, Gil; 354 indigenous cultures; 128 Doggett, Luther L.; 183; 344 organisational cultures; 42; 167; 206; dominant status model; 235 207; 313 Dominicans.See Christianity:monastic orders political cultures; 163; 265 donations.See philanthropy regional cultures; 17; 40; 295; 302; 345; donative NPOs.See nonprofit:nonprofit 346 organisations(NPO) sub-cultures; 234; 323 Douglas, James; 56; 122; 158–64; 344 Kulturkampf; 30; 34 Dunant, Henri; 221; 306 Curds; 25 Durkheim, Emile; 9; 45; 322 customs; 46; 312; 331; 335 Dutch Christian Peace Movement(DCPM); 191; 203; 318; 328; 351 Dahl, Robert A.; 159 Dahlkvist, Mats; 58; 59; 60; 61; 62; 64; 343 ecclesiastical authority.See Christianity Dallago, Bruno; 88; 343 ecological theory; 16; 145; 146; 149; 178; 194– day-care; 54; 79; 81; 103; 109; 155 207; 211; 215; 217; 312; 316; 332; 342; 347 definitions; 13; 16; 51–3; 56; 65; 68; 69; 71; coarse grained environment; 197 79; 81–3; 90; 91; 98; 105; 110; 117; 118; community ecology of organisations; 194 120; 123; 130; 134; 140; 151-153; 157; 162; fine-grained environment; 197 168; 184; 212; 217; 227–32; 247; 249; 254– generalism; 196; 197; 206; 213 7; 259; 260; 264; 266–72; 274–8; 296–8; inertia; 26; 195; 198; 199; 264; 317 318; 319; 322; 359 hierarchial inertia; 199; 213; 215; 316; Defourny, Jacques; 21; 70; 85; 86; 87; 344 327 demand structural inertia; 199; 204; 316 differentiated demand; 250; 258 niche; 195; 205 371

specialism; 196; 197; 206; 213; 306 elite; 41; 153; 346 Economic and Social Council.See international economic elite; 251; 265; 293 governmental organisations(IGO):United elite interest; 57; 111; 149; 163; 251; 256; Nations(UN) 265; 293 économie sociale.See social economy elite role; 125; 152; 163 Education; 14; 22; 28–30; 32–5; 43; 45; 47; 67; elite schools; 251 76; 85; 101; 103; 109; 118; 136; 140; 158; elite status; 153 186; 210; 211; 235; 250; 256; 265; 270; elite theory; 265 279; 280; 282–4; 286; 287; 290; 292; 293; non-urban elite; 152 297; 298; 301; 303; 306; 308; 309; 313; urban elite; 40; 41; 152 321; 343; 346; 349; 354; 358 emergent norm; 203; 214 academies; 31 employment.See labour antiquity Engels, Frederick; 62; 354 Greco-Roman education; 29 Enlightenment; 20; 31; 33; 61; 309; 354 Jewish education.See Judaism enterprises.See for-profit organisations(FPO) British education.See Britain environment; 132; 144; 145; 147; 154; 161; institutions; 30; 42; 256 164; 171; 173; 176–8; 180; 189; 192; 194– Halle institutions; 31; 32; 309 200; 203–10; 212–6; 218; 230; 279; 286; libraries; 150; 228 311; 312; 315; 316; 318; 325; 332; 335; public education; 33; 35; 283 339.See also context schools; 79–81; 99; 129; 155; 180; 213; coarse-grained environment; 197 214; 235; 255; 256; 266; 279; 318 fine-grained environment; 197 episcopal schools; 30 equal distribution constraint; 160 Medieval schools; 30 Esping-Andersen, Gøsta; 20; 344 Medieval universities; 30 Esposito, Vincent J.; 321; 344 missionary schools; 253 ethics; 35; 42; 46; 61; 65; 216; 236; 241; 351 monastic schools; 30 Christian social ethics; 26; 42; 59; 216 private schools; 250; 251; 270; 286; 292 Anglican social ethics; 38 public schools; 211 Biblical ethics; 22 Reformation schools; 31; 353 Catholic social ethics; 29; 34; 263 school fees; 286 Lutheran social ethics; 30; 32; 38; 39; secondary schools; 120; 201 294 subjects; 29; 30 discource ethics; 65 Sunday Schools; 41; 238 global ethics; 347; 348 YMCA schools; 186 social ethics; 347 universities; 27; 30; 31; 52; 76; 80; 82; 97; Western ethics; 22 99; 107; 108; 118; 140; 145; 147; 161; ethnicity; 25; 41; 102; 108; 152; 230; 251; 307; 210; 234; 266; 288; 298; 300; 348 318; 337 Columbia University; 177 Etzioni, Amitai; 51; 69; 90; 105; 132; 345 Garnegie Institute; 177 Europe; 11; 21; 27; 29; 42; 48; 68; 76; 82; 95; Harvard University; 40; 97; 108; 121; 119; 137; 149; 152; 158; 169; 175; 197; 269; 345; 347; 353; 356; 363 247; 248; 260; 261; 266; 270; 349 Johns Hopkins University; 261; 266; churches; 27; 28; 30; 32; 40; 75; 79; 90; 267; 275; 277; 280; 281; 283; 288–90; 263; 295 296; 299; 300; 305; 340; 359 European Conference on the Nonprofit University of Joensuu; 4 Sector; 261 West Virginia University; 300 European Union; 257; 280; 363 Yale University; 40; 144; 249 EU administration; 34; 86; 266; 293 York University; 300 European integration; 93; 157 effectiveness; 55; 97; 99; 112; 129–34; 144; General Industrial Classification of 211; 237; 249; 263; 345; 348; 357; 360; 364 Economic Activities(NACE); 277; Effinger, Herbert; 172; 344 278 Egypt; 23 tax legislation; 50; 86 Ehrenberg, John; 59; 60; 61; 62; 63; 70; 293; Eurovol Project; 266 344 history; 19; 22; 27–39; 76; 111; 119; 346; Eisenstadt, S.N.; 57; 344 349; 358 ekleesia.See Christianity:church legal traditions; 81; 100 Elazar, Daniel J.; 40; 344 philanthropy; 27; 76 372

REEN research network; 86 for-profit organisations(FPO); 40; 42; 44; 54; regions; 20; 21; 27; 32-34; 47; 48; 53; 58; 55; 56; 58; 83; 86; 96; 97; 99; 100; 103–6; 63; 64; 75; 76; 81; 86; 108; 120; 136; 109; 112–5; 122; 123; 131; 135–7; 141; 247; 248; 262; 263; 286; 288; 295 143; 147; 154; 162; 165; 169; 172; 195; third sector; 27–39 199; 220; 225; 234; 248; 249; 250; 253; welfare models; 21; 27–39; 56; 87; 127; 275; 287; 290; 300; 306 167–73 for-profit sector.See market Evers, Adalbet; 172; 345 Foundation for the Support of Christian experimentation; 160 Science and Arts; 4 Eyerman, Ron; 97; 161; 203; 330; 345 foundations; 27; 31; 43; 52; 81; 86; 90; 98; 99; 117; 118; 125; 144; 155; 201; 225; 247; failure performance approach; 99 259; 263; 285; 306; 340; 346 faith; 183 family foundations; 118 family; 23; 29; 34; 35; 47; 51–3; 57; 59–61; fourth sector; 52; 70; 71; 360 63–6; 69–71; 75; 79; 89; 91; 92; 114; 118; frame analysis; 153; 313; 341; 342; 348; 361 137; 144; 145; 170; 229; 264 France; 35; 51; 85; 86; 166; 221; 247; 259; ancient Jewish family; 24 260; 261; 265; 282; 287; 295; 299; 310; 341 ancient Roman family; 29 French Academy; 35 family foundations; 118 Franciscans.See Christianity:monastic orders family resemblances; 7; 10; 92; 315; 338 Francke, August Herman; 31 family role; 28; 48 Fraser, Derek; 75; 345 home education; 29 fraternities.See Christianity:monastic orders people’s home; 39; 301 Freeman, John; 177; 178; 194–205; 207; 213; fees.See revenues 214; 215; 315–7; 327; 347 Feldstein, Martin S.; 43; 97; 102; 345 free-rider; 97; 102; 110; 158; 159; 169 fellowship; 58 Freud, Sigmund; 9; 318 Ferguson, Adam; 61; 345 Friedkin, Rebecca; 179; 192; 193; 211; 212; feudalism; 59 214; 357 Feyerabend, Paul; 9; 345 funds; 37; 112; 117; 181; 226.See also fifth sector; 52; 360 subsidies Filer Commission.See Commission on Private charitable funds; 37 Philanthropy and Public Needs communal funds; 24 Finland; 8; 33; 34; 67; 107; 198; 226; 253; 282; funding agencies; 53 286; 289; 300; 348 fund-raising; 24; 26; 53; 55; 79; 131; 139; associations; 68; 79; 201; 203; 271 166; 182; 225; 226; 357 Jyväskylä; 11; 300 international funding; 253 KELA; 287 private funds; 37; 97; 162 Labour Movement; 163 public funds; 37; 252; 254; 262; 285; 286 legislation; 164 Association Law; 274 Galileans.See Christianity:early Christians Religious Liberty Law; 274 Galtung, Johan; 8; 9; 345 religion; 107 Gamson, William A.; 171; 345 Adventism; 274 Gassler, Robert Scott; 82; 83; 101; 220; 221; Finnish Lutheran Mission; 107; 350 345 Helsingin Diakonissalaitos; 307 Gastil, Raymond D.; 40; 345 Lutheran Church; 11; 30; 52; 54; 79; Geertz, Clifford; 14; 15; 121; 309; 346 128; 271; 274; 283; 284; 294; 301; Gelpi, Ettore; 30; 31; 35; 346 347 gemeinützige Träger; 259 Orthodox Church; 79 general activity model; 238 Pentecostalism; 274 General Industrial Classification of Economic Salvation Army; 274 Activities(NACE); 277; 278 Telephone Emergency Service; 239 generations; 131; 188; 319; 353 socialism; 107 Germany; 28; 38; 59; 71; 86; 172; 173; 175; Turku; 176 249; 259–61; 265; 282; 283; 287; 299; 340; firm.See for-profit organisations(FPO) 354; 359 Fisher, George S.; 188 Bad Honnef; 261 folkhem.See family German welfare model; 34; 247 Forbes, Daniel P.; 132–4; 345 Halle institutions; 31; 32; 309 373

Kulturkampf; 30; 34 government; 21; 24; 33; 36; 42; 55; 58; 64; 66; Nazis; 120; 201; 341 73; 100–5; 113; 116; 117; 119; 123; 127; religion; 30; 38 128; 158–60; 162; 165; 166; 168; 170; 171; Catholic Church; 34 212; 220; 225; 250–4; 259–61; 263; 264; Ecclesiastical Law; 273 267; 269; 270; 271; 286; 287; 306; 348; Landeskirches; 54 352; 358; 362.See also state Pietism; 31; 32; 309 Graham-Brown, Sarah; 120; 346 Reformation; 31; 353 Gramsci, Antonio; 58; 62; 63; 346 Gill, Robin; 239; 346 grassroots organisations.See nongovernmental Gilleman, G.S.J.; 222; 346 organisations(NGO) Ginsberg, Eli; 101; 346 grassroots support organisations.See Gjems-Onstad, Ole; 68; 346 nongovernmental organisations(NGO) global responsibility; 348 Great Depression; 224; 245 goals; 32; 72; 100; 130–2; 138; 148; 161; 180; Greece; 22; 29; 58; 354 181; 182; 184; 185; 187; 193; 210; 231; gross domestic product(GDP); 281; 289 256; 290; 321; 322; 334–6 guilds; 27; 59; 60; 295; 309 common goals; 92 Guttman, Louis; 228; 232; 346 final goals; 62; 115; 192; 280; 321 goal conflicts; 131 Halevy, Elie; 38 goal consensus; 130 Halfpenny, Peter; 129; 346 goal setting; 184 Hall, Peter Dobkin; 10; 40–3; 82; 83; 96–8; goal-attainment approach; 132; 133 123; 125; 185; 224; 245; 269; 270; 337; 346 long term goals; 130 Hallamaa, Jaana; 47; 347 multiple goals; 130; 131 Halle institutions; 31; 32; 309 official goals; 132 Handy, Charles; 162; 347 operative goals; 132 Handy, Femida; 227–32; 343 organisational goals; 130; 132; 134; 168; Handy, Robert T.; 40; 347 184; 193; 317; 333 Hannan, Michael T.; 177; 178; 194–205; 207; original goals; 193; 258 213–5; 315–7; 327; 347 primary goals; 55; 209 Hansmann, Henry; 96–9; 103; 104; 109–16; short term goals; 130 118; 120; 122; 127; 129; 139; 146; 225; socioeconomic goals; 104 226; 275; 307; 313; 347 strategical goals; 321 Harinen, Päivi; 4 tactical goals; 133; 321 Hauck, Friedrich; 58; 347 transnational goals; 72 Havens, John J.; 222; 359 God; 23; 60; 107; 223; 239; 252; 321; 325; 339 Hawley, Amos; 195; 347 Goffman, Erving; 313; 346 health care; 14; 32; 43; 80; 82; 85; 96; 97; 99; good life; 34; 35; 46; 47; 59 103; 107–9; 116; 120; 129; 136; 147; 155; good works; 47 180; 213; 218; 253; 255; 277; 279; 280; goods; 53; 101; 104; 109; 110; 111; 113; 114; 282–4; 287; 289; 293; 297; 298; 301; 307; 116; 123; 152; 154; 252 309; 341; 358 club goods; 124 hospitals; 81; 96; 99; 107; 111; 288; 307; collective goods; 101; 102; 123; 159; 162 345 common goods; 151; 152; 154; 291 nursing homes; 106; 109; 313 cultural goods; 344 psychiatric care; 109 manufacture goods; 131 Hegel, Georg Wilhelm Fredrich; 58; 61–3; 65; market goods; 121 70; 71; 347 merit goods; 101; 102; 103; 154 Heino, Harri; 283; 347 mixed goods; 124 Heinonen, Reijo E.; 8; 45; 46; 222; 325; 347 public goods; 97; 98; 101–3; 108; 110; 120; Heinze, Rolf G.; 172; 356 126; 151; 154; 159; 162; 164; 169; 173; Helander, Voitto; 66; 67; 80; 86; 266; 267; 174; 252; 291; 306; 307; 356 269; 283; 348 public goods theory; 102–9 Henry, John; 8; 341 semi-public goods; 103; 120; 252 Herman, Robert D.; 84; 348 trust goods; 124; 126 heterogeneity theory; 108; 249; 250; 263; 265; Gordenker, Leon; 72; 346 299; 307 Gortz, Andre; 134 Hiesltad, Dale L.; 101; 346 Gouttes, Paul de; 244 Hindess, Barry; 306; 348 374

Hinduism individual charity; 22; 23; 25–7; 35; 74; 84; Dharma Law; 260 220; 221; 252; 310 Holborn, Louise; 120; 348 individual choice.See choice Holtmann, Alphonse G.; 106; 122; 348 individual commitment; 27 Hood, Christopher; 19; 20; 167; 168; 169; 170; individual donations.See philanthropy 248; 249; 348 individual interest.See interest Hoomissen, Theresa van; 123–6; 341 individual membership; 272; 329 Hopkins, C. Howard; 183; 348 individual motivation; 206; 241; 244 household.See family individual networks.See networks housing; 279; 286 individual piety; 31 Hudson, Pete; 44; 348 individual preferences; 221 Hudson, Winthrop S.; 40; 348 individual rights; 32 human resources approach; 133 individualism; 142; 172; 344 Humanism; 31; 223 industry; 14; 16; 97; 98; 134; 135; 140; 146; Hungary; 81; 281–3 148; 155; 161; 163; 174; 199; 211; 212; Hunt, Scott A.; 318; 348 214; 256; 265; 313 Huntington, Samuel P.; 47; 348 health care industry; 96; 287 social movement industry(SMI); 68 ideal; 23; 37 social work industry; 283 democracy; 32 inertia.See ecological theory final goals; 62 informal community based organisations.See pure altruism; 222 nongovernmental organisations(NGO) situations; 13; 120 informal sector; 88; 89; 114 solutions; 160 information; 109; 110; 186; 225; 293; 306 types; 52; 53; 111; 153; 154; 164; 167 information asymmetry; 104; 109; 122; 123; ideas; 12; 20; 23; 26; 32–6; 38; 44; 46; 47; 60; 124 65; 85; 129; 159; 160–2; 171; 190; 213; information costs; 122 309; 344.See also beliefs information flow; 198 identity; 153; 273; 318–20; 322; 325–8; 330; information management; 132 337; 338; 355 information technology; 134 age identity; 319 poor information; 109 collective identity; 63; 68; 157; 213; 307; innovations; 19; 107; 119; 145; 149; 160; 174; 308; 311; 313; 316–20; 322; 325; 327; 175; 197; 309; 335 337; 348; 351 institutions; 10; 28; 35; 40; 53; 60; 68; 80; 82; ethnic identity; 25 97; 99; 100; 118; 126; 137; 139; 144; 161; identification; 184; 222; 236 168; 180; 199; 209; 263; 279; 291; 295; identification model; 222 309; 344; 346; 362 individual identity; 319 ancient institutions; 22 organisational identity.See organisation civic institutions; 62 professional identity; 185; 319 cultural institutions; 65 public identity; 138; 312; 319; 320; 334 educational institutions; 30; 42; 256 religious identity; 320 Established Church; 38; 40; 52; 53; 54; 309 ideology.See belief governmental institutions; 103 Ilchman, Warren F.; 28; 357 Halle institutions; 31; 32; 309 Ilmonen, Kaj; 108; 349 independent institutions; 36; 161; 267; 291 independence; 24; 30; 32; 33; 36; 52; 59–61; institutional activity; 25 64; 66; 67; 74; 76; 85; 98; 117; 145; 158; institutional arrangements; 160; 167; 261; 169; 186; 187; 189; 192; 199; 200; 202; 264 204; 249; 252; 254; 270–2; 274; 281; 295 institutional beliefs; 312 independent sector; 66 institutional characteristics; 158; 209 India; 259 institutional choice; 55; 99; 100; 104; 109; Calcutta; 221 113; 114; 127; 145; 167; 169; 173; 252; individual; 22; 34; 35; 37; 38; 47; 52; 59; 60; 256; 264; 269; 307; 341; 342 63; 65; 70; 74; 78; 83; 100; 101; 110; 116; institutional environment; 208 123; 125; 126; 134; 137; 142; 159; 173; institutional isomorphism; 207 181; 198; 204; 214; 218–46; 248; 291; 301; institutional power; 10 306; 313; 318; 323; 325; 363; 364 institutional rules; 207; 208; 209; 212; 216 individual action.See action institutional sectors; 53; 71 375

institutional stability; 334 International Committee of Red Cross.See Red institutional structures; 19; 147; 149 Cross institutional theory; 16; 108; 116; 145; 168; international committees.See Red Cross, Young 178; 207–9; 211; 214; 215; 244; 264; Men’s Christian Association(YMCA) 290; 312; 335; 363 international development cooperation institutionalisation; 19; 65; 97; 145; 154; institutions.See nongovernmental 174; 181; 209; 214; 267; 268; 354; 355; organisations(NGO):international 363 NGOs(INGO) institutionalised beliefs; 208; 312 International Federation of Red Cross and Red inter-governmental institutions; 49; 72; 363 Crescent Societies.See Red Cross international development cooperation international governmental organisations(IGO); institutions.See nongovernmental 72; 73; 79; 116; 137; 244; 245; 298; 302; organisations(NGO):international 335; 349 NGOs(INGO) International Committee of Red Cross; 72; Jewish institutions.See Judaism 79; 201; 245 mediating institutions; 63; 70 International Labour Organisation; 49 nonprofit institutions.See United Nations(UN); 49; 72; 120; 126; 157; nonprofit:nonprofit organisations(NPO) 216; 257; 266; 277; 335 philanthropic institutions; 25; 77; 78; 84; Economic and Social 140; 350; 352 Council(ECOSOC); 72 profitable institutions.See for-profit United Nations Children’s organisations(FPO) Fund(UNICEF); 79 public institutions.See public:public United Nations High Commissioner for organisations Refugees(UNHCR); 79; 120; 348 Reformation's institutions; 309 United Nations Relief and Works Agency religious institutions; 26; 121; 238 for Palestine Refugees(UNRWA); 120 social institutions; 20; 70 United Nations System of National voluntary institutions.See voluntarism Accounts(SNA); 53 intellectuals; 97; 161; 203; 324; 330 World Bank; 49 interest; 186; 248 International Labour Organisation.See elite interest; 111; 149; 163; 251; 256; 265; international governmental 293 organisations(IGO) general interest; 158; 171; 291 international nongovernmental general interests; 320 organisations.See nongovernmental individual interest; 62; 71; 158; 220; 222; organisations(NGO) 325 International Standard Industrial interest conflict; 124; 131; 159; 171; 218; Classification(ISIC); 277; 278; 288; 298 271 Ipfling, Heinz-Jürgen; 31; 33; 36; 349 interest groups; 138; 162; 254 IRC.See United States:tax legislation:Internal interest identities; 319 Revenue Code interest organisations; 67; 73.See also Ireland; 282; 287; 342 nongovernmental organisations(NGO) iron law of oligarchy; 68; 177 interest-based communities; 156; 252; 256; Islam; 259; 292; 295 314 holy city; 26 interest-mediating organisations; 149; 263 Islamic countries; 108; 259 intrinsic interest; 179 isomorphism; 148; 195; 196; 207; 209; 344 member interests; 67; 179; 212 coercive isomorphism; 209 NPO’s interest; 66; 97 competitive isomorphism; 207 stakeholder interest; 124; 130 mimetic isomorphism; 210 state interest; 71 normative isomorphism; 210 subsidised interest rates; 224 Israel; 22; 23; 26; 54; 114; 261; 273; 282; 286; voice of interest; 172 287; 361.See also Judaism intermediaries; 53; 69–71; 73; 74; 79; 80; 84; Jerusalem; 25; 26 88; 172; 173; 175; 279; 286 Italy; 281 internal processes; 132; 133; 264 Rome; 29; 119; 135; 343; 346; 349; 354; International Classification of Nonprofit 358 Organisations(ICNPO); 278; 279; 288 Solferino; 221

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Jackson, Elton F.; 239; 241; 349 kuppah.See charity Jacob, Gisela; 172; 349 Kuti, Eva; 81; 82; 351 Jacobins; 70 Jacobson, Perry E. Jr.; 235; 352 Laaksonen, Harri; 269; 283; 348 Jaffe, Eliezer David; 54; 349 labour; 87; 172; 290 James, Estelle; 81; 108; 109; 112; 113; 144; division of labour; 28; 34; 149 156; 249–58; 265; 266; 270; 294; 300; 307; employment; 54; 81; 133–6; 138; 235; 249; 314; 349 281–5; 289; 290; 302 Jamison, Andrew; 97; 161; 203; 330; 345 NP employment; 134–6; 139; 273; 280–4 Janoski, Thomas; 238; 239; 314; 364 International Labour Organisation.See Japan; 21; 263; 282; 286; 349 international governmental emperor Mutsuhito; 21 organisations(IGO) Meiji Restoration; 21 labour economics; 135; 136; 137; 361 Jehovah’s Witnesses; 213 labour force; 24; 81; 134–6; 178; 180; 226; Jenkins, J. Graig; 163; 350 358 Johns Hopkins Comparative Nonprofit Sector voluntary labour force; 219; 238; 239; Project(JHP); 261; 266–99; 300; 305 244 Josephus; 23 Labour Movement.See movements:social Judaism; 23–5; 29; 45; 183; 223; 259.See also movements Israel labour unions; 62; 81; 91; 105; 117; 152; Hebrew language; 23 162; 195; 200; 233; 234; 254; 255; 257; holy city; 26 274; 279.See also movements:social institutions; 25 movements:Labour Movement Jewish education; 29 NP employment; 137; 180; 181 Jewish kingdom; 24 unemployment; 135; 145; 199; 284 Jewish revolt; 25 Landeskirches.See Christianity:Landeskirches philanthropy; 22–7; 29; 352 landlords; 36 religious authorities; 24 Lang, Kurt and Gladys Engel; 317; 324; 328; sects; 23 329; 331; 351 synagogue; 27; 272 Latin America; 213; 286 Torah; 23 Latourette, Kenneth Scott; 41; 351 Julian, Emperor; 25 Latting, Jean Katambu; 235; 352 juridical person.See legislation law.See legislation justice; 85; 151; 157; 160; 168; 171; 293 Le Roy Ladurie, Emmanuel; 30; 352 leadership; 42; 185; 194; 238; 266; 329; 330; Kanter, Rosabeth Moss; 129; 130–2; 134; 205; 331; 333; 356 350 centralised leadership; 107 Karl, Barry D.; 10; 78; 83; 97; 98; 227; 350 charismatic leadership; 204; 311; 330 Kasternakis, Amy; 238; 239; 343 collective leadership; 329 Katz, Stanley N.; 28; 145; 350; 357 decentralised leadership; 180 Kauppinen, Juha; 107; 350 informal leaders; 329 Keller, Evelyn Fox; 8; 350 lay leadership; 184; 187 Kelles, Anita; 8; 350 movement leaders; 31; 38; 42; 183; 202; Keynes, John Maynard; 39; 43; 357 204; 317; 324; 327–30 Killian, Lewis M.; 203; 214; 322; 363 nonprofit leaders; 96–8; 124; 192; 193 Kilpatrick, Walter S.; 351 Leat, Diana; 166; 167; 352 Kinnunen, Juha; 289; 358 Ledger, Christine; 189; 352 Klandermans, Bert; 68; 191; 199; 201; 203; legislation; 19; 24; 27; 36; 48; 52; 63; 65; 67; 317; 318; 327; 328; 351 75; 79; 81; 100; 105; 161; 164; 177; 223; Klausen, Kurt Klaudi; 67; 68; 256; 300; 351 261; 279; 291; 355; 358 koinonia; 58; 60; 151; 153; 155 administration legislation; 100 koinonia politikhe.See civil society American legislation.See United States Koistinen, Pentti; 134; 351 charity legislation; 37; 55; 75; 158; 292 Kopperi, Marjaana; 35; 351 British charity legislation.See Britain Krashinsky, Michael; 109; 122; 123; 125; 126; church legislation; 30; 32; 76 351; 356 Canonic Law; 75; 158 Kuhn, Thomas; 8; 351 Ecclesiastical Law; 273; 292 Kumar, Krishan; 58; 62; 63; 64; 351 Civil Law; 48; 81; 148; 259; 291; 292; 307 377

Common Law; 48; 75; 148; 156; 259; 291; market failure; 109; 110; 113; 117; 123; 292; 307 127; 135; 141; 308; 358 Finnish legislation.See Finland market forces; 45; 54; 114; 127; 137; 141 Hammurabi Law; 23 market goods; 121 internalised rules; 220; 291 marketisation; 183; 284 juridical person; 30; 52; 135 philanthropy market; 123 legal status; 29 stock market; 54; 126; 128 public law; 291 Marrou, Henri-Iréneé; 29; 354 Roman Law.See Civil Law Marsden, Peter V.; 144; 146; 177; 178; 201; social legislation; 23 339 Swiss law; 157 Martin, David; 239; 354 tax legislation; 75; 86; 255; 346.See also Marx, Karl; 9; 58; 62; 63; 354 Britain, United States Marxism; 8; 62–5; 67; 141; 178; 223; 318; 343 Urugagina Law; 23 Mathisen, James A.; 188; 354 legitimacy; 30–2; 38; 60; 74; 98; 149; 160; Matthies, Aila-Leena; 71; 171–6; 217; 354 181; 187; 198; 202; 208–13; 215; 216; 264; McAdam, Doug; 171; 202; 353; 354 312; 326; 333; 334; 335 McCarthy, John D.; 68; 141; 152; 202; 354 Lehtonen, Heikki; 59; 60; 352 McManners, John; 31; 354 Leiby, James; 28; 37; 352 McPherson, Miller; 205; 206; 212; 214; 337; leisure; 16; 253; 307 354 Lemon, Mona; 235; 352 Mead, Walter B.; 126; 127; 354 Leo XIII; 34 megatrends; 17; 56; 89; 170; 248; 266; 335; Levita, David J. de; 319; 352 356 Levitt, Theodore; 51; 352 Meijs, Lucas C.P.M.; 187; 192; 231; 354 liberalism; 13; 20; 21; 44; 45; 57; 58; 60–2; 64; Melucci, Alberto; 68; 141; 318; 354 66; 70; 85; 143; 149; 238; 263; 292; 308 membership; 7; 41; 67; 82; 117; 126; 156; 164; life world; 57; 64; 65; 156; 190; 195; 242; 245 166; 167; 179; 182; 183; 184; 186; 189–91; List, Regina; 267; 268; 273; 279; 281–7; 359 197; 201; 205; 206; 215; 233; 255; 266; local development associations.See 272; 288; 289; 296; 299–301; 317; 318; nongovernmental organisations(NGO) 325; 327–9; 334; 351.See also Locke, John; 58; 61; 352 adherency.See also adherency Loewenberg, Frank M.; 22–7; 74; 75; 110; 352 board members; 11; 166; 231; 244 Lohmann, Roger A.; 150–7; 265; 315; 316; community members; 47; 59; 179; 212; 293 352 core members; 314; 329; 330 Lotha-Volterra equation; 205 family members; 47; 61; 92; 118 Luckmann, Thomas; 11; 28; 46; 208; 325; 341 freedom of membership; 85 Lumsden, Charles J.; 146; 360 member serving NPOs; 53; 87; 162 Lundström, Tommy; 256; 300; 352 member states; 157 Luther, Martin; 30;–2; 60; 353 membership associations; 107; 118; 156; 212; 231; 259; 288; 289; 298; 299; 314 Macaulay, Jacqueline; 238; 360 membership fees; 142; 182; 288; 299 management; 83–5; 97; 99; 112; 132; 161; 184; membership statistics; 290; 301 194; 208; 260; 354 paper members; 164 Mannheim, Karl; 319; 353 rank and file members; 314; 324; 329 Manninen, Juha; 322; 323; 353 sect members; 153 Mansbridge, Jane; 293; 353 staff members; 140; 184 March, James G.; 177; 354 voting members; 184 market; 13; 17; 26; 44; 49; 51–4; 56; 57; 61; young members; 190 64; 66; 69–71; 74; 83; 89; 95; 99; 104; 105; merit goods.See goods 110; 113; 114; 120; 123; 127; 135; 137; Merton, Robert K.; 177; 179; 355 141; 143; 144; 147; 148; 151; 154; 156; metaphor; 9; 14; 27; 87; 92; 107; 120; 125; 159; 162; 172–5; 183; 212; 220; 221; 242; 140; 144; 155; 156; 175; 201; 214; 256; 243; 249; 263; 264; 273; 274; 296; 308; 298; 301 355; 362 Methodism.See Christianity:Protestantism free market; 44; 52; 57 Mexico; 282; 283; 286 labour market; 137; 180; 181 Meyer, John W.; 208; 209; 211; 214; 355 market activity; 7; 26; 55; 81; 87; 116; 174; Michels, Roberto; 68; 177; 355 182; 225; 289; 300 microeconomic approach; 98 378

Middle Ages; 28; 30; 58; 59; 60; 61; 70; 76; Second Awakening; 40 100; 358 Student Christian Movement(SCM).See Mill, John Stuart; 61; 355 World Student Christian Mills, John O.; 239; 354 Federation(WSCF) Milofsky, Carl; 144; 355 YMCA.See Young Men’s Christian minorities; 25; 108; 235; 252; 280 Association(YMCA) ethnic minorities; 41; 102; 108; 152; 251; YWCA.See Young Women's Christian 307 association(YWCA) linguistic minorities; 102; 108; 307 revitalisation movements; 323 minority demands; 103 social movements; 57; 64; 65; 67; 68; 73; religious minorities; 41; 108; 152; 307 74; 77; 79; 80; 152; 159; 161–3; 173–5; mission; 40; 113; 129; 130; 131; 133; 134; 138; 196; 202; 229; 272; 275; 294; 307; 308; 153; 172; 184; 187; 188; 191; 193; 199; 319; 324; 329; 334; 354; 355; 358; 362 203; 214; 253; 257; 307; 316; 318; 320–2; anti-slavery movement; 41 325–7; 330; 332; 334; 337; 338.See also Civil Rights movement; 202; 355 goals, raison d'être environmental movement; 161 Christian mission; 108; 118 Labour Movement; 38; 62; 67; 108; 137; community-wide mission; 41; 152 140; 152; 163; 175; 248; 342; 357; Finnish Lutheran Mission; 107 361.See also labour:labour unions mission accomplishment approach; 133 new social movements(NSM); 44; 68; mission statement; 133; 204 276; 318; 342; 351; 354 mission view; 7; 213; 320; 321 peace movement; 41; 191 missionaries; 41; 103; 108; 125; 213; 326 Peasant Movement; 67 Mol, Hans; 318; 319; 355 political movements; 68 Montesquieu, Baron de; 63; 70; 355 pressure groups; 162; 163 Moody, Dwight L.; 188 social movement industry(SMI); 68 Moore, Erja; 4 social movement organisations(SMO); Morgan, Gareth; 14; 355 68; 156; 162; 214; 257; 264; 334 Morris, Aldon; 202; 355; 361 social movement sector(SMS); 68; 69; motivations; 153; 178; 206; 219; 222; 225; 74; 77 234; 241–4; 308 social movement studies; 7; 25; 67; 68; ideological motivations; 137 100; 132; 141; 152; 153; 163; 175; religious motivations; 137 176; 189; 196; 202; 214; 248; 258; staff motivations; 189 301; 308; 311; 313; 314; 318–20; 341; movements; 11; 164; 198 345; 351; 354; 364 association movement; 247 Solidarity movement; 64 movement intellectuals; 97; 161; 203; 324; teetotal movement; 41; 67; 163; 164 330 sports movement; 67 movement midwife; 202 Mulkay, Michael; 8; 355 multi-purpose movements; 164 multidimensional approaches; 133 Olympic Movement; 54 municipalities; 33; 36; 44; 52; 79; 164; 209; political movements; 69 231; 272 reform movements; 69; 349 municipal agencies; 280 religious movements; 67; 69; 203; 325 municipal agencies; 22 Awaker movement; 107 municipal budget; 29 DCPM.See Dutch Christian Peace municipal companies; 54 Movement(DCPM) municipal corporations; 36 Ecumenical movement.See Christianity municipal service; 121; 248; 280 Evangelical Alliance; 202 municipalisation; 120 International Fellowship of Evangelical mutations; 201 Students (IFES); 188 mutual benefit organisations; 21; 51; 54; 74; Inter-Varsity Fellowship; 188 77; 82; 85; 86; 90; 91; 98; 102; 105; 140; Methodism; 38 162; 163; 259; 275; 356 new religious movements(NRM); 41 Muukkonen, Marjukka; 4 religious movement studies; 7; 41; 202; Muukkonen, Martti; 176; 355 311; 338 Muukkonen, Matti; 4 revival movements; 38; 40; 42; 67; 238; Muukkonen, Sirpa; 4 337 Myllykangas, Markku; 289; 358 379

operatives; foundations; nonprofit:nonprofit Naisbitt, John; 134; 248; 355 organisations(NPO) nation; 34; 251; 285 community based NGOs(CB-NGO); 73 national churches; 52; 79; 310 community based organisations (CBO); 73 national economy; 53; 80; 174; 281; 311; donor NGOs(DONGO); 73 360 government NGOs(GONGO); 73 national identity; 319; 320 grassroots organisations(GRO); 73; 84 national organisations; 7; 73; 79; 142; 157; grassroots support organisations(GRSO); 73 186; 188; 197; 201; 204; 215; 216; 243; indigenous NGOs; 73; 253 244; 250; 280; 299; 329; 335; 357 informal community based national parliaments; 33 organisations(ICO); 73 national policy; 119; 120; 187; 248 interest organisations; 73 national statistics; 249 international NGOs(INGO); 7; 12; 15; 27; national style approach; 167; 248 72; 73; 108; 116; 120; 126; 137; 138; national traditions; 17; 20; 100; 147; 152; 140; 142; 156; 157; 175; 176; 204; 214; 157; 263; 266; 275; 276; 297 215; 216; 243–5; 249; 253; 257; 258; nationalism; 33; 221; 253 261; 266; 298; 299; 302; 305; 315; 319; nation-state; 16; 146 322; 327; 329; 332; 334–7; 349 natural systems approach; 177–9; 189 Amnesty International; 225; 271 neighbour; 52; 107; 115; 220; 227; 229; 231; big international NGOs(BINGO); 73 245; 310; 326 CARE; 111 neighbourhood; 62; 79; 172 Congress of NGOs(CONGO); 73 Nelson, Richard; 109; 356 international development cooperation Nerfin, Marc; 71; 72; 356 institutions; 73 Netherlands; 109; 282; 287; 349; 350 International Federation of Red Cross Amsterdam; 67; 340 and Red Crescent societies; 73; 201 voluntary organisations(VO); 187 International Fellowship of Evangelical Dutch Christian Peace Students (IFES); 188 Movement(DCPM); 191; 203; 317; International society for Third Sector 328; 351 Research(ISTR); 300; 342 networks; 7; 51; 106; 298; 312; 335; 337; 340; World Alliance of YMCAs.See Young 342 Men’s Christian Association(YMCA) evangelical network; 40; 42; 337 World Council of Churches; 49; 161 informal networks; 53; 57; 74; 79; 91; 171; WSCF.See World Student Christian 202; 213; 269 Federation(WSCF) international networks; 82; 253 YWCA.See Young Women's Christian network analysis; 17; 206 association(YWCA) network of schools; 29 local development associations(LDA); 73 personal networks; 52; 71; 221; 228; 337 nongovernmental development professional networks; 210; 216 organisations(NGDO); 73 religious networks; 258 northern NGOs(NNGO); 73 YMCA networks; 197; 204 peoples organisations(PO); 73 niche; 104; 148; 179; 182; 191; 192; 195; 199; public service contractors(PSC); 73 200; 205; 206; 215; 312; 313; 316 quasi NGOs(QUANGO); 73; 269 Nicht-Erwebsbetriebe; 259 social change organisations (SCO); 73 Niebuhr, H. Richard; 41; 153; 188; 356 support NGOs(SNGO); 73 Niebuhr, Reinhold; 222; 223; 356 umbrella organisations; 272 nomadic lifestyle; 23 welfare church organisations(WCO); 73 nondistribution constraint; 82; 98; 109; 113; nonprofit; 56; 80; 83; 84; 119; 150; 151; 158; 123; 225; 226 178; 189; 200; 218; 256; 259; 260; 298; nongovernmental development 302; 311; 325 organisations.See nongovernmental history of NP studies; 16; 43; 83; 96–103; organisations(NGO) 144; 145; 164; 258; 261 nongovernmental organisations(NGO); 49; 64; nonprofit behaviour; 16; 17; 81; 83; 85; 106; 71–4; 77; 79; 84; 91; 127; 137; 140; 156; 117; 120; 128–34; 146; 161; 163; 219; 175; 201; 253; 257; 258; 298; 302; 308; 262; 263; 283; 303; 315 341; 348; 363.See also voluntary nonprofit constraint; 82; 109; 110; 113; 123; organisations.See also associations; co- 276 380

nonprofit economy; 281; 284; 285; 287; Nordic welfare model; 12; 21; 32; 33; 38; 289; 296; 363 39; 48; 120; 263; 293; 301 nonprofit effectiveness; 55; 97; 99; 112; religion 129; 130; 132; 144; 237; 249; 263; 345; Lutheranism; 32; 38; 39 348; 360 Pietism; 32; 362 nonprofit entrepreneurs; 123; 252; 254 social movements; 67 nonprofit form; 42; 55; 109–13; 118; 124; Vikings; 33 127; 128; 135; 147; 148; 149; 162; 172; Norway; 343 174; 189; 211; 249; 259; 297; 307; 308 Lutheran Church; 33; 53 nonprofit frame; 264; 265; 266; 302 Nurmi, Paavo; 54 nonprofit history; 18–45; 290; 346 nonprofit labour; 135; 136; 282; 283; 284 O’Neill, Michael; 74; 77; 356 nonprofit law.See legislation Offe, Claus; 172; 356 nonprofit organisations(NPO); 24–7; 29; 32; oil crisis; 43 41; 43; 44; 55; 57; 81–3; 85; 87; 90; 95– Ojansivu, Merja; 226; 356 9; 102–7; 109–11; 113–5; 119; 123; 125; Olson, Mancur; 97; 98; 159; 162; 356 129; 131; 132; 135; 136; 138; 139; 141; open systems approach; 132; 144 144; 152; 155; 158; 159; 161; 163; 165– opportunity structures; 122; 138; 141; 142; 7; 175; 176; 189; 194; 195; 199; 201; 171; 187; 212; 213; 227; 315; 318; 332; 203; 211; 217; 219; 220; 224–6; 228; 333; 335; 336; 337 239; 250–4; 272; 281; 287; 291–4; 302; optimising models; 129 303; 305–7; 315; 316; 341; 344; 345; organisation; 64; 72; 82; 131; 345.See also 347; 349; 350; 352; 357–9 associations commercial nonprofits; 98; 275 charismatic organisation; 330 commercial NPOs; 98; 111 church organisations.See Christianity directory of NPOs; 144; 340 communities; 41; 106; 145; 178; 194; 216 donative NPOs; 98; 111; 112; 275 complex organisations; 189; 200; 214 entrepreneurial NPOs; 98; 111 employee organisations; 105 for-profit in disguise; 109 for-profit organisations(FPO).See for-profit member serving nonprofits; 53 organisations(FPO) mutual NPOs; 98; 111 midwife organisation; 202 relation to profits; 98; 105; 109; 129; mother organisation; 202; 307 135; 143 mutual benefit organisations.See mutual relation to welfare capitalism; 42 benefit organisations trust on NPOs; 109; 110; 112; 114; 115; neighborhood-based organisations; 355 225; 253 nonprofit organisations(NPO).See nonprofit provision; 124 nonprofit.See nonprofit nonprofit role; 16; 19; 99; 102–28; 135; organisation level; 16; 146; 311 141; 146; 154; 160; 164; 165; 247; 252; organisation segments; 177 253; 260; 262 organisation’s adherency; 133; 153; 161; nonprofit sector(NPS); 7; 39; 43; 51; 52; 189; 190; 199; 201; 203; 205; 213; 252; 80–86; 88; 89; 102–4; 106; 113; 119; 316; 317; 318 127; 128; 140; 145; 158; 160; 164; 165; organisation’s mission; 113; 115; 132; 133; 173; 199; 220; 242; 249; 256; 259; 261– 153; 199; 203; 213; 237; 308; 315–8; 337 4; 267; 268; 273; 281; 283; 285; 286; organisational accountability; 161; 166; 167; 290; 292–4; 296–8; 301; 308; 314; 340; 198; 352 344; 345; 349–1; 356; 358–60; 362; 363 organisational behaviour; 16; 17; 87; 98; 99; relation to state.See third sector 115; 128–34; 143; 145; 146; 148; 167; nonprofit service; 103; 159; 252; 307 177; 178; 213; 218; 256; 257; 262; 296; nonprofit supply; 124 311; 315; 329 non-statutory sector; 66; 74; 259 organisational branches; 100; 112; 191; 192; Nordic countries; 28; 39; 47; 48; 66–8; 150; 194; 231 170; 226; 256; 271; 300; 301; 307; 346; organisational change; 19; 178; 189; 192; 351.See also Denmark, Finland, Norway, 197–203; 205; 225; 253; 316–8; 337 Sweden organisational culture; 42; 167; 206; 207 Nordic Council; 280 organisational decision-making; 34; 165; Nordic democracy; 32; 33; 38; 171 177; 181; 184; 186; 193; 208; 305; 306; 318; 319; 322; 331 381

organisational development model; 131 Peru; 282; 283 organisational ecology.See ecological theory Pestoff, Victor; 125; 357 organisational effectiveness; 55; 129–34; philanthropy; 16; 19; 22; 27–9; 32; 35; 47; 74– 144; 211; 237; 249; 263; 345; 357; 360; 78; 80; 83; 84; 97; 109; 127; 145; 155; 220; 364 223; 226; 238; 285; 292; 297; 346; 352; organisational environment; 132; 145; 178; 357; 359; 360.See also charity, poor relief 194–7; 199; 201; 203; 205–7; 212; 234; beneficiaries; 22; 75 312; 315; 316; 318; 337 British philanthropy.See Britain organisational forms; 62; 72; 99; 131; 133; Christian philanthropy; 25; 26; 27; 121; 213 145; 161; 164; 177; 178; 204; 206; 209; Commission on Private Philanthropy and 213; 234; 253; 267; 269; 306; 307; 308; Public Needs; 51; 96; 97; 102; 144; 345 312; 315 donations; 23; 29; 42; 44; 55; 81; 96; 104; organisational identity; 68; 213; 308; 316; 110; 111; 123; 124; 138; 139; 142; 149; 317; 337; 351 166; 182; 224–6; 232; 238; 243; 245; organisational ideology; 316; 317; 337 253; 255; 278; 284; 285; 288; 333; 345; organisational innovation; 160 346; 349 organisational populations; 145; 194; 195 donors; 22; 24; 44; 73; 75; 82; 112; 122; organisational resources; 20; 82; 111; 122; 166; 227; 253; 271 132; 152; 158; 163; 166; 178; 195; 196; Greek philanthropy; 22 198; 206; 212; 225 Jewish philanthropy.See Judaism organisational survival; 132; 196; 197 philanthropic organisations; 51; 75; 76; 83; public benefit organisations.See public 84; 96; 133; 279; 286 benefit organisations philanthropy legislation; 37; 55; 75; 158; religious organisations.See religion, 292 Christianity philanthropy market; 123 social organisations; 194; 255 philanthropy sector; 38; 74; 77; 80; 84 sports organisations.See sports Reformation phase philanthropy; 76; 342 voluntary organisations(VO).See religious phase philanthropy; 76; 342 voluntarism remedial phase philanthropy; 76; 342 youth organisations.See youth Renaissance phase philanthropy; 342 Orthodox.See Christianity Renessance phase philanthropy; 76 Ostner, Ilona; 172; 345 retrenchment phase philanthropy; 76; 77 other-wordly emphasis; 238 seven charity acts; 23 social ethics; 34 Palestine; 346 philia; 151 Palestinians; 25 Pickering, W.S.F.; 239; 354 Palisi, Bartolomeo J.; 235; 352 Pierre, Abbe; 221 Pals, Daniel L.; 9; 13; 14; 356 Piliavin, Jane Allyn; 221; 222; 357 parish.See Christianity Pius XI; 34 Parsons, Talcott; 21; 65; 177; 179; 356 Plato; 58; 357 participation; 58; 76; 79; 128; 151; 157; 163; pluralistic argument for diversity; 159 181; 183; 190; 219; 229; 232–9; 262; 267; Poland; 48 272; 284; 289; 290; 300; 301; 314; 325; Solidarity movement; 64 327; 359; 361 Warsaw; 163 Passeron, Jean-Claude; 8; 342 politics; 65; 70; 75–7; 83; 188; 201; 236; 237; patron; 41; 111; 112; 113; 118; 225 279; 341; 342; 363 peace; 23; 156 cultural politics; 63 Justice of the Peace; 36 political accountability; 161 peace movements; 41; 191; 203; 318; 328; political action; 58; 65; 75; 77; 80; 81; 117; 351 162; 163; 165; 166; 170; 171; 173; 353 world peace; 326 political actors; 34; 38; 127; 171; 255; 268; Pekkarinen, Jukka; 39; 357 275; 292; 298; 301 Pelling, Henry; 38; 357 political autonomy; 60 Pence, Owen E.; 183; 357 political economy; 62; 127; 181 Pentecostalism.See Christianity:Protestantism political economy approach; 178–93; 180 peoples organisations.See nongovernmental political equality; 251 organisations(NGO) political equilibrium; 198 personality variables.See voluntarism political functions; 158 382

political integration; 158; 263 nonprofit privileges; 165 political issues; 63; 116; 127; 159; 160; 165; town inhabitant privileges; 59 308 process studies; 133 political leadership; 42; 64 Prodi, Romano; 293 political left; 11; 13; 44; 45; 248; 262 profession; 11; 185; 248 political opportunity structures; 171; 212; deprofessionalisation; 262 335; 337 professional associations; 279; 286; 288 political opposition; 28 professional commitment; 78 political organisations; 11; 25; 40; 62; 68; professional identity; 185; 319; 337 69; 81; 84; 90; 111; 140; 152; 156; 162– professional institutions; 82; 84 4; 254; 255; 272; 274; 279; 313; 355 professional management; 131; 184 political pluralism; 171 professional networks; 210; 216 political power; 42; 212; 251; 255; 256; 265 professional sports; 54; 300 political right; 11; 45; 247; 262 professional standards; 132; 245 political sphere; 60; 63; 65; 66; 113; 149; professional training; 85; 321 151; 163; 164; 170; 292 professionalisation; 54; 79; 147; 152; 161; political system; 60; 163; 264 179; 210; 243; 272 political theories; 13; 16; 17; 61; 84; 95; professionals; 78; 80; 107; 125; 132; 133; 130; 143; 145; 151; 158–76; 217; 218; 147; 181; 184; 193; 196; 197; 226; 231; 221; 242; 264; 311; 313; 343; 344; 359 272; 293 political tradition; 152; 265 profit; 7; 51; 55; 72; 82; 98; 109; 112; 115; welfare politics; 39; 167; 311 135; 143; 144; 150; 183; 252; 253; 267; polymorphism; 197 276; 346; 357 poor relief; 23–6; 31; 33; 36; 37; 74; 76; 78; Program on Non-Profit 263; 265; 293.See also charity, philanthropy Organisations(PONPO); 144; 249 Portes, Alejandro; 88; 357 prophet; 202; 204; 329; 330 Powell, Walter W.; 83; 99; 144; 158; 179; 192; Protestant.See Christianity 193; 207; 209–12; 214; 216; 335; 344; 356; public; 30; 48; 75; 100; 117; 125; 142; 147; 357 148; 151; 154; 162–4; 270; 317; 332–5 priest - prophet - distinction; 202 public - private relationships; 51; 53; 56; 82; Priestley, Mark; 8; 361 100; 117; 247; 260; 262; 263; 269; 283; prince-merchant-citizen; 72; 356 308; 340; 350 prisoners of war(POW); 120; 201; 333; 361 public administration.See administration private; 72; 74; 82; 117; 127; 267; 270; 288 public benefit organisations; 53; 86; 230 private action.See action public choice; 220 private donations; 29; 37; 44; 55; 82; 97; public control; 44; 295 162; 284; 285; 288 public education; 33; 35 private education.See education, schools public funds; 37; 44; 252; 254; 262; 285; private goods.See goods:merit goods 286 private health care; 103; 287; 307 public goods.See goods private organisations.See co-operatives, public identity; 138; 312; 319; 320; 334; corporations, for-profit 335 organisations(FPO), foundations, mutual public law.See legislation benefit organisations, nonprofit public meeting; 100 organisations(NPO) public opinion; 65; 66; 100; 109; 209 private philanthropy.See charity, public organisations; 29; 52; 54; 99; 148; philanthropy 231; 243; 248; 264; 265; 291 private sector; 42; 44; 51; 52; 55; 87; 100; public policy; 96; 143; 147; 208; 260; 341; 119; 161; 247; 250; 251; 253 346; 356 private sphere; 63; 65; 264; 308 public power; 169; 170 private welfare model; 43 public schools.See education privatisation; 44; 98; 253 public sector.See state public - private relationships; 51; 53; 56; 82; public service; 83; 98; 100; 127; 143; 167; 100; 117; 247; 260; 262; 263; 269; 283; 168; 169; 227; 248; 249; 250; 251; 259; 308; 340; 350 348; 349; 358 quasi-private organisations; 291 public services contractors.See privileges; 293 nongovernmental organisations(NGO) clergy privileges; 76 public sphere; 60; 65; 175; 319 383

public subsidies; 44; 55; 113; 183; 225; 285 religious heterogeneity; 108; 263 res publica; 100 religious ideas.See belief purchasing power parity index; 289 religious identity; 319; 320 Puuronen, Vesa; 203; 357 religious motivations; 27; 37; 107; 137; 227; 307; 316 quality; 106; 108–10; 112; 114; 115; 124; 129; religious movements; 107; 257; 360 138; 160; 164; 209; 251; 293; 297 new religious movements(NRM); 121; quasi nongovernmental organisations.See 257; 274; 303 nongovernmental organisations(NGO) religious networks; 337 Queen, Edward L.II; 28; 357 religious opportunity structures; 74; 206; Quinn, Robert E.; 133; 357 212; 295; 336 religious organisations; 7; 11; 12; 24–7; 35; raison d’être of the organisation; 133; 134; 53; 84; 91; 98; 105–7; 115; 118; 121; 153; 213; 313; 316; 324; 330 140; 156; 180; 213; 238; 239; 242; 252; Rammstedt, Ottheim; 68; 358 254–7; 272–4; 283; 284; 289; 296; 298; Randon, Anita; 55; 75; 357 300; 308; 310; 313; 318; 320; 334–6; 343 Raskoff, Sally A.; 235; 362 American Bible Society; 41 ratio; 31; 32 American Board of Commissioners for rational choice.See choice Foreign Missions; 41 Ratner, R.S.; 313; 342 American Sunday-School Union; 41 Reagan, Ronald; 44; 55; 143; 183; 358 church federations; 49; 298 recreation; 85; 136; 257; 279; 282–4; 286; 288; churches; 12; 31; 38; 40; 41; 48; 52–4; 298; 300 62; 71; 76; 79; 81; 90; 99; 118; 121; recruitment theories; 137; 139; 234 153; 174; 182; 183; 185; 216; 238; Red Cross; 119; 120 239; 255; 272–4; 298; 303; 309–11; Geneva Convention; 201 326 International Committee of Red Cross; 72; congregations; 11; 26; 27; 33; 35; 36; 52; 79; 120; 201 78; 118; 139; 231; 238; 239; 271; 272; International Federation of Red Cross and 274; 279; 283; 285 Red Crescent societies; 73 DCPM.See Dutch Christian Peace Solferino; 221 Movement(DCPM) Redfield, Robert; 324; 358 Finnish Lutheran Mission; 107; 350 Reformation; 19; 30; 32; 36; 60; 61; 76; 78; SCLC; 355 158; 309; 346 World Council of Churches(WCC); 204 refugees; 120; 126; 201; 216; 244; 320; 321; WSCF.See World Student Christian 333; 348; 351 Federation(WSCF) religion; 9; 12; 13; 21; 22; 26; 28; 29; 45–7; YMCA.See Young Men’s Christian 54; 76; 78; 89; 106; 108; 121; 212; 221; Association(YMCA) 223; 230; 239; 257; 273; 274; 282; 283; YWCA.See Young Women's Christian 290; 295; 298; 300; 303; 308; 310; 323; Association(YWCA) 333; 334; 336; 337; 338; 342; 343; 349; religious roots; 108 356; 360; 361; 364.See also Buddhism, religious symbols; 310 Christianity, Islam, Judaism.See also religious values; 27; 45; 46 Buddhism, christianity, Islam, Judaism, religious wars; 31 Jehovah's Wittnesses sociology of religion; 9; 121; 257; 290; 295; Abrahamic religions; 23; 259; 295 296; 303; 325 civil religion; 323; 341 Renaissance; 76; 346 Eastern religions; 295 rent theories; 136; 139 quius regio, eius religio; 33 reputation; 115; 133; 138; 228; 334 religiosity; 40; 238; 239; 306 reputational approach; 132 religious actors; 268; 298 resources; 34; 37; 53; 98; 122; 123; 126; 128; religious attitudes; 213 131; 132; 142; 152; 158; 163; 166; 167; religious authorities; 24 178; 181; 189; 191; 193; 195; 196; 199; religious behaviour; 117; 118; 152; 182; 202; 205; 206; 212; 215; 252; 257; 258; 187; 213; 238; 239; 254; 268; 280; 283; 279; 289; 290; 312; 317; 327; 328; 332–4; 310; 324; 326; 342 336 religious communities; 274 allocation of resources; 333 religious groups; 27; 41; 152; 251; 252; 307 human resources; 148; 212; 333 384

human resources approach; 133 volunteers' role; 231 model as a resource; 20 young people's role; 203 organisation as a resource; 68 Romania; 282; 286; 287 pooled resources; 151 Rose, Richard; 168; 169 resource dependency theory; 177; 178; 189; Rose-Ackerman, Susan; 144; 358 196 Rouse, Ruth; 161; 358 resource mobilization approach; 68; 132; Rousseau, Jean Jacques; 58; 358 141; 152; 163; 168; 169; 189; 196; 293; Rowan, Brian; 208; 209; 211; 214; 216; 355 294; 308; 351; 354; 364 Rusama, Jaakko; 283; 347 system resource approach; 132 Rushton, J. Philippe; 340 Restivo, Sal; 8; 358 Rushton, N.J.; 236 Reubens, Beatrice G.; 101; 346 Ryynänen, Olli-Pekka; 289; 358 revenues; 24; 82; 87; 96; 103; 142; 165; 168; 225; 243; 253; 255; 285; 286; 287; 288; sacred; 9; 45; 46; 52; 273; 322; 355 289; 300; 302 Saint Martin, Monique de; 8; 342 Internal Revenue Code (IRC).See United Salamon, Lester M.; 19–21; 33; 35; 44; 53; 81; States:tax legislation 82; 83; 98; 103; 105; 113; 115–20; 127; revolution; 134; 362 135; 136; 150; 167; 249; 266–79; 281–9; Industrial Revolution; 78; 345 291–9; 301–3; 338; 358; 359 Rhodes, Cecil; 223 Salonen, Kari; 283; 347 Riché, Pierre; 30; 358 Salvation Army.See Christianity:Protestantism Rifkin, Jeremy; 134; 135; 137; 351; 358 Sami; 25 righteousness; 23; 34; 46; 47; 184; 252; 339 Scandinavia.See Nordic countries Rochford, E. Burke; 153; 361 Schervish, Paul G.; 222; 359 Rohrbaugh, John; 133; 357 Schneider, John C.; 40; 359 role; 107; 117; 127; 170; 197; 212; 235; 318; Schuppert, Gunnar Folke; 19; 20; 167–70; 248; 333; 335 249; 348 clergy's role; 187 Schwartz-Howard Model; 241 co-operatives' role; 125 Scotland; 3 culture’s role; 56 Scouts; 7; 188; 202; 256; 271; 272; 279; 300 donors' role; 131 sect; 23; 41; 121; 153; 188; 202; 296; 303; 326 elite role; 125; 152; 163 secular; 37; 42; 52; 121; 152; 185; 223; 239; family role; 28; 170 273; 294; 309; 326; 354 ideology's role; 315; 323; 324 secular authority; 19; 32; 48; 121; 353 INGO role; 156; 157; 299; 335 secular state; 28; 34 intellectuals' role; 203 secularisation; 46; 158; 182; 188; 310 intellectuals’ role; 330 secularism; 121 laity's role; 185 Seibel, Wolfgang; 39; 51; 55; 56; 86; 100; 112; leaders’ role; 204; 330 158; 160; 164; 167; 171; 247; 248; 249; markets role; 253 258; 261–4; 340; 359 mother organisation's role; 202; 271 self-governing; 72; 82; 267; 271 public’s role; 65 self-help groups; 77; 81 public's role; 335 self-interest.See interest:individual interest religion’s role; 12; 21; 28–31; 35; 48; 60; Selle, Per; 67; 68; 256; 300; 351 125; 148; 174; 183; 185; 257; 273; 283; Selznick, Philip; 179; 359 292 Senaud, Auguste; 32; 359 resources' role; 308 service; 45; 53; 56; 62; 74; 78; 98; 106; 107; role theories; 17; 98; 99; 127; 128; 138; 108; 109; 111–5; 117–9; 121–7; 131; 132; 141; 142; 146; 256; 311 148; 156; 158; 165; 169–72; 179; 180; 182; stakeholders' role; 125; 126 183; 193; 201; 206; 209; 212; 218; 228; state role; 13; 21; 28; 29; 45; 103; 148; 174; 237; 238; 247; 251; 252; 255; 258; 262; 261; 307; 310 263; 265; 293; 299–301; 307; 309; 310; third sector role; 14; 16; 19; 28; 29; 35; 42; 313; 333; 361 45; 50; 67; 71; 77; 84; 95; 99; 102–28; communal service; 24; 53 135; 142; 143; 146; 148; 154; 158; 160; day care service; 276 164; 165; 170; 171; 174; 179; 247; 252; diaconal service; 187; 231 254; 258; 260; 261; 264; 265; 311; 314; family service; 114 344; 347; 362; 363 lawyer's service; 228 385

military service; 227 social characteristics; 205 public service; 73; 98; 127; 143; 167–9; Social Christianity; 70; 85 209; 217; 227; 248–51; 255; 259; 348; social class; 9; 20; 75; 147; 235 349; 358 social constructivism; 134; 245; 341; 348 public service contractors(PCS).See social control; 115 nongovernmental organisations(NGO) social differentiation; 65; 293 service clubs; 347 social economy; 7; 51; 85–7; 89; 91; 173; 259 service imperatives; 168; 170 social ethics.See ethics service quality; 109; 110; 124; 129; 251 social integration; 158 service sector; 42; 135; 136; 281 social justice; 167; 171; 293 social service; 21; 43; 44; 67; 100; 116; social legislation.See legislation 125–7; 136; 149; 161; 162; 164; 187; social life; 61; 63; 65; 129; 151 189; 213; 218; 247; 277; 279; 280; 282– social mobility; 153 4; 295–7; 301; 306; 308; 309; 340; 343; social movements.See movements 352.See service social needs; 128 social service organisations; 7; 15; 28; 147; social objectives; 37; 164 199; 212; 213 social objects; 317; 327; 328; 331 state service; 24; 42; 102; 103; 104; 123; social order; 121 128; 143; 159; 252 social participation variables.See voluntarism Sunday Service; 118; 238 social policy; 39; 135; 167; 172; 173; 266; 311; Telephone Emergency Service; 239 340; 345 third sector service; 22; 23; 25; 26; 43; 44; social problems; 8; 34; 86; 117; 149; 160; 179; 53; 102; 103; 108; 143; 159; 164; 248; 262 252 social reformation; 37 shared goods.See collective goods social reformers; 329 shared interpretation; 203; 320; 322; 324 social relations; 157; 318 shareholder; 112 social security; 287; 288 Sheehan, Robert M. Jr.; 133; 360 social status.See status Simon, Herbert A.; 177; 321; 354 social unit; 34 Simon, John G.; 164–6; 177; 360 social welfare organizations.See welfare Singh, Jitendra V.; 146; 360 socialisation; 210; 220; 248 Sipilä, Jorma; 39; 340 socialism; 42; 86; 107; 259 situational variables.see voluntarism Social Democracy; 21; 39; 148; 263; 292; Slovakia; 282 307 Smart, Ninian; 360 socialistic countries; 73; 120; 307 Smelser, Neil; 203; 360 societas civilis.See civil society Smith model; 233; 237 society; 14; 16; 29; 35; 41; 53; 58–60; 62; 64; Smith, Adam; 61; 360 65; 74; 86; 100; 144; 145; 162; 166; 183; Smith, Christian; 202; 360 196; 199; 208; 209; 211; 220; 251; 253; Smith, David Horton; 52; 53; 81; 83; 84; 88; 262; 306; 311; 312; 362 219; 226; 229; 230; 232–8; 284; 351; 358; Sokolowski, S Wojciech; 267; 268; 273; 279; 360 281–7; 359 Smith, Leonard; 38; 361 Soli Deo Gloria; 4 Smith, Timothy L.; 40; 360 solidarity; 71; 85; 351 SNA.See international governmental Sorri, Hannu; 239; 240; 361 organisations(IGO):United Spain; 282; 283; 286 Nations(UN):United Nations system of Spener, Jacob; 31 National Accounts(SNA) Sperber, Daniel; 25; 361 Snow, David A.; 153; 318; 348; 361 Spinney, Laura; 306; 361 Snyder, Mark; 234; 240; 343 sports; 54; 67; 85; 183; 206; 213; 282–4; 297; social activities.See action 300 social background variables.See voluntarism basketball; 197 social benefit organisations; 98 sport evangelism; 354 social capital; 363 sports facilities; 182 social care; 32; 47; 262; 263 sports organisations; 7; 80; 163; 164; 213; social change; 37; 73; 173 253; 256; 286 social change organisations.See volleyball; 197 nongovernmental organisations(NGO) Sri Lanka; 253; 255; 265; 350 386 stability; 26; 59; 182; 204; 206; 236; 331; 334 167–74; 247; 248; 261; 262; 276; 295; staff; 12; 32; 55; 80; 106; 107; 109; 133; 137; 301; 307; 342; 351; 357; 358; 360; 362 139; 140; 164; 166; 175; 184; 186; 189; American welfare model.See United 210; 230; 244; 254; 266; 298; 299; 310; States 328; 329; 330; 334; 335; 340 British welfare model.See Britain stakeholders; 10; 123–5; 142 German welfare model.See Germany demand-stakeholders; 123–126 liberal welfare state; 20; 21 multiple stakeholders; 130 Nordic welfare model.See Nordic stakeholder control; 124–6 countries supply-stakeholders; 123–125 state-like entities; 48; 273; 298 Stalin, Joseph; 273 status; 41; 48; 50; 70; 76; 171; 274; 294 Standard Oil; 201 charitable status; 75 state; 25; 27–9; 33; 35; 37; 40; 43; 49; 51; 52; consultative status; 72 54; 55; 57; 59; 61–7; 69–72; 74–9; 82; 83; elite status; 153 89; 95; 100; 102; 113; 114; 116; 117; 119; hierarchy of status; 210 120; 121; 123; 124; 126; 128; 130; 141; legal status; 24; 29; 30; 68; 79; 135 142; 143; 146–9; 154; 157–61; 164; 169; legitimated status; 98; 264; 268 170; 174; 186; 212; 221; 225; 242; 243; NGO status; 72; 327 250; 254; 260; 262–4; 271; 273; 280; 290; nonprofit status; 55; 99; 229; 259 291; 293; 294; 301; 310; 323; 343 official status; 48; 54; 80; 150; 291 absolutist state; 33; 61 religious status; 9; 26; 53 authoritarian state; 20; 64 social status; 149; 205; 235; 243 national defence; 120 status groups; 41; 152 national differencies; 100; 248; 263; 359 status quo; 318 national economy; 53; 80 Stebbins, Robert A.; 240; 241; 361 national statistics; 249 Steinberg, Richard; 136; 137; 226; 227; 361 nation-state; 16; 146 Stensland; 305 parliament; 33; 38; 70 Stensland, Sigbjørn; 126; 305; 361 public administration.See administration Stone, Emma; 8; 361 public sector; 25; 44; 51; 52; 53; 55; 66; 71; Stonemasons; 21 79; 87; 90; 100; 104; 110; 116; 136; 161; Story, Donald C.; 127; 222; 223; 362 175; 206; 220; 242; 247; 249; 250; 251; Strong, Tracy; 120; 361 270; 273; 281; 283; 284; 285; 287; 290; structural/functional definition; 267; 268; 272 307; 308 Student Christian Movement(SCM).See World relation to family; 34; 48; 71 Student Christian Federation(WSCF) relation to religion; 28–34; 39; 48; 53; 59; Stukas, Arthur A.; 234; 240; 343 64; 121; 158; 294; 296; 309; 310 subsidiarity; 29; 33; 34; 119; 167–70; 263; 287 relation to third sector; 21; 22; 26; 34; 37; subsidies; 44; 47; 48; 55; 105; 113; 117; 164; 42–4; 48; 61; 63; 64; 66; 81; 83; 85; 96; 165; 180; 183; 225; 250; 252–4; 280; 285; 102; 113; 117; 119; 120; 147; 149; 151; 287; 288; 333 165; 168; 170; 174; 175; 250; 252; 254; Suikkanen, Asko; 134; 351 261; 263; 270; 271; 280; 283; 287; 288; Summers, David V.; 129–32; 134; 205; 350 290; 292; 294–7; 311; 341; 348; 352; Sunday School.See Christianity 358; 360 Sundeen, Richard; 235; 362 secular state; 28 Suolinna, Kirsti; 107; 362 stability of the state; 26 Sweden; 39; 108; 125; 256; 350; 352 state action.See action folkhem; 39 state dominance; 33; 39 Gustav Wasa; 32 state failure; 102–9; 113; 117; 123; 128; Lutheran Church; 54 135; 308 Stockholm; 67; 163 state responsibility; 26; 30; 34; 37; 44; 48; Swidler, Ann; 25; 26; 362 76; 114; 120; 168; 170; 263; 310 switchmen of history; 315 state role; 14; 21; 28; 29; 39; 45; 103; 148; Switzerland; 251; 253 307; 310 cantons; 290 town-state; 59 Geneva; 12; 137; 157; 204; 216; 335 welfare state; 8; 20; 30–2; 35; 39; 43; 44; Geneva Convention; 201 48; 58; 64; 121; 127; 135; 149; 164; legislation; 157 387 symbols; 14; 26; 46; 190; 310; 322; 324; 325; Thomsen, Herbert; 175; 362 330 Tilly, Charles; 68; 171; 362 synagogue.See Judaism tithing; 24 system resource approach; 132 Tocqueville, Alexis de; 39; 63; 65; 149; 362 Söderman, Jacob; 293 Toepler, Stefan; 267; 268; 273; 279; 281–7; Sørensen, Aage B.; 32; 362 359 Toffler, Alvin; 134; 362 tamhu’i.See charity Tolbert, Pamela S.; 177; 363 Tarrow, Sidney; 163; 362 Touraine, Alain; 68; 362 tax; 23; 36; 102; 159 towns; 31; 36; 58–60; 70; 114; 115; 137; 157; church tax; 48 182; 206; 234; 331 income tax; 36; 55; 224; 226 tradition; 19; 29; 32; 55; 58; 68; 75; 291 tax deduction; 81 great tradition; 324 tax legislation; 75; 80; 86; 346 little tradition; 324 American legislation.See United States transaction.See action Internal Revenue Code(IRC); 81 transformation.See change tax-exemption; 55; 80; 81; 96; 135; 136; Troeltsch, Ernst; 121; 202; 296; 363 224 trust; 109; 115; 116; 220; 244; 307; 357 taxing system; 36; 164; 226; 247; 251; 346 calculation of trust; 115 Taylor, Frederick W.; 177 charitable trust; 37; 160 Taylor, Marilyn; 44; 126; 171–3; 247; 362 mistrust; 310 Telephone Emergency Service; 239 trust goods; 124; 126 territory; 186; 234 trust on FPs; 115 Lutheran territory; 37; 38 trust on NPOs; 109; 110; 112; 114; 115; nonprofit territory; 120; 165 225; 253 territory of the church; 30; 32; 308 trustees; 41; 55; 166; 185; 364 testfields; 160 trustworthiness; 104; 109; 112; 115; 116; Thane, Pat; 36; 362 135; 253; 307 Thatcher, Margaret; 44; 172; 247 trustworthiness theory; 109; 226; 253; 307 Theresa, Mother; 221; 306 Trägårdh, Lars; 45; 64; 363 third party government; 116; 147; 358 Turkey; 263 third sector; 7; 8; 10–4; 16; 17; 19; 21; 22; 25; Turner, Ralph H.; 203; 214; 322; 363 29; 39; 43–5; 48–53; 56; 57; 66–9; 74; 77; two regiments; 32; 294 79–82; 86; 89; 90; 92; 93; 95; 97; 99; 100; tzedakah.See righteousness 110; 113; 114; 119; 122; 127; 134–6; 140; 142; 145; 146; 152; 153; 155; 157; 158; Ukraine 162; 163; 166; 170–6; 189; 196; 200; 212; Chernobyl; 163 217; 218; 220; 242; 247–9; 253; 255; 258; Kiev; 163 263–7; 273; 275; 277; 283; 294; 296; 297; Ullmann, Steven G.; 106; 122; 348 299; 301–3; 306; 307; 309; 313; 314; 325; umbrella organisations; 82 338; 340; 348; 351.See also civil society; unemployment.See labour fourth sector; fifth sector unions.See labour attitudes to third sector; 38; 44; 248 United Nations.See international governmental relation to religion; 20; 22; 27; 32; 40; 41; organisations(IGO) 106; 107; 109; 115; 252; 254; 257; 273; United States; 11; 39; 43; 63; 66; 80; 82; 175; 283; 303; 308; 316; 318; 345 240; 260; 265; 299; 300; 344 relation to state; 21; 22; 43; 66; 96; 98; 102; African-Americans; 235 105; 110; 113; 117; 119; 120; 162; 165; Boston merchants; 40; 42 168; 170; 174; 175; 209; 211; 218; 250– Chicago; 185; 188; 189; 191; 192; 214 2; 254; 261; 263; 270; 271; 280; 283; Civil War; 40; 42; 182; 188; 197; 360 287; 288; 290; 292; 294–7; 311; 341; Great Depression; 224 348; 352; 358; 360 Medicaid; 43; 96 third sector role; 14; 28; 48 Medicare; 96 Third World; 73; 103; 128; 138; 198; 250; 253; New England; 40 257; 259; 275; 276; 282; 302; 346 nonprofit history; 21; 39–44; 96; 224; 346 Thirty Year War; 31 nonprofit organisations; 51; 66; 96; 99; 108; this-wordly emphasis; 238 140; 152; 155; 172; 179; 259; 269; 275; Thompson, F.M.L.; 28; 362 276; 288; 289; 297; 298; 302 388

American Automobile Association; 111 value memory; 45; 46; 336; 348 American Bible Society; 41 value orientation; 115 American Board of Commissioners for value rationality; 147; 259 Foreign Missions; 41 value system; 21; 336 American Educational Society; 41 value-free; 151; 323 American Sunday-School Union; 41 value-neutral; 10 Art Museums; 111 value-oriented movements; 322 Common Cause; 111 World Values Survey; 115 Consumers Union; 111 Wearmouth, R.F.; 38; 363 Educational Testing Service; 111 Weber, Max; 9; 46; 52; 177; 202; 208; 213; Harvard University; 40; 97; 108; 121; 214; 240; 295; 315; 363 269; 345; 347; 353; 356; 363 Weisbrod, Burton A.; 44; 53; 55; 81; 97; 98; Kiwanis; 347 102–9; 112; 120; 128; 140; 146; 224; 225; Lions; 347 250; 306; 307; 363 March of Dimes; 111; 193 Weiss, Thomas G.; 72; 346 National Audubon Society; 111 welfare; 24; 30; 34; 35; 42; 44; 47; 53; 55; 56; National Geographic Society; 111 62; 85; 95; 100; 105; 147; 169; 171; 174; Rotary; 347 217; 227; 282; 310.See also poor relief YMCA.See Young Men's Christian Nordic welfare model.See Nordic countries Association (YMCA) private welfare model; 43 public administration; 39; 42; 55; 119; 183; welfare capitalism; 42; 344 344 welfare cartels; 149 regional cultures; 345; 346; 359 welfare church organisations.See religion; 40; 41; 53; 238; 283; 343; 345 nongovernmental organisations(NGO) civil religion; 341 welfare economics; 341 Ecumenical movement; 364 welfare mix; 87; 171; 172 Protestantism; 40; 41; 42; 274; 337; 360 welfare organisations; 35; 81; 155; 247 society; 41; 343; 360; 362 welfare pluralism; 171 tax legislation; 42; 81; 90; 97; 140; 160; welfare politics; 39; 167; 311 224; 268 welfare regimes; 20 Economic Recovery Tax Act; 44 welfare services.See service:social service Internal Revenue Code(IRC); 81; 84; 99; welfare state; 8; 20; 30–2; 39; 43; 44; 48; 105; 152; 272; 277 58; 64; 121; 127; 135; 149; 164; 167–74; National Taxonomy of Exempt Entities; 247; 248; 261; 262; 276; 295; 301; 307; 150; 277; 278 342; 351; 357; 358; 360; 362 National Taxonomy of Exempt American welfare model.See United Entities(NTEE); 277 States Tax Reform Act; 43; 96 British welfare model.See Britain welfare model; 39; 48; 246 corporatist welfare state; 20; 21; 35 welfare capitalism; 42 German welfare model.See Germany universities.See education Social Democratic welfare state; 21 utilitarianism; 98; 222; 305; 306; 355 statistic welfare state; 21 welfare subsidies; 47 Wadsworth, Margaret; 227–32; 343 vereine; 259 Vakil, Anna C.; 73; 363 Veron, Luc; 85; 363 values; 63; 65; 85; 180; 192; 211; 216; 234; Wiesenthal, Helmut; 172; 345 236; 241; 251; 312; 322; 337 Williams, George; 184; 185 competing values framework; 133 Williamson, Oliver; 122; 363 conflicting values; 159; 218 Wilson, John; 238; 239; 314; 364 cultural values; 207 Wineburg, Robert J.; 238; 239; 343 deep values; 45 visibility; 161; 292; 297 financial values; 129 Wittgenstein, Ludwig; 7; 9; 10; 92; 93; 315; organisational values; 27; 192; 315; 322 323; 338; 364 religious values.See religion Wolfenden Committee; 171; 364 social values; 46; 63; 65; 106; 107; 129; voluntarism; 16; 17; 23; 37; 51; 54; 74; 77–80; 130; 181; 192; 203; 209; 214; 244; 322; 82–4; 97; 128; 145; 150; 153; 178; 223; 334; 337 224; 226–32; 234; 238; 241–5; 259; 260; universality of values; 292 262; 263; 266; 267; 272; 276; 279; 280; 389

284; 289; 296; 300; 314; 341; 343; 349; Yoder, Don Herbert; 40; 41; 364 360; 363 Young Men’s Christian Association(YMCA); board membership; 11 7; 11; 12; 15; 32; 142; 161; 181; 183; 184; religiosity; 238; 239; 242 187; 197; 198; 202; 212; 213; 215; 216; voluntarism theories; 136; 227; 242; 243; 225; 256; 271; 279; 280; 321; 359 245 American YMCA; 41; 179–89; 191–3; 225; voluntaristic models of organisations; 130 288; 344; 364 voluntary action.See action Chicago YMCA; 188; 189; 191; 192; 214 voluntary charity; 78 George Williams College; 185 voluntary failure; 116–22; 308; 358 International Committee; 186; 187 voluntary oath; 78 National Council; 187 voluntary organisations(VO); 19; 22; 24; 42; railroad YMCA; 186 57; 63; 65; 73; 79–81; 83; 84; 91; 96; sports; 188 149; 159–62; 171–3; 180; 187; 189; 190– Springfield College; 185 2; 205; 206; 230–31; 234; 254; 269; 338; student YMCA; 186; 191; 344 347; 352; 354; 360; 364 work with the armed forces; 186; 197 volunteer-governed organisations; 231 World Service; 186; 187; 351 volunteer-run organisations; 231 Austrian YMCA; 3; 198 volunteer-supported organisations; 231 Canadian YMCA; 186; 351 voluntary participation; 360 English YMCA; 187 voluntary price discrimination; 111 London YMCA; 183; 184; 187 voluntary sector; 77–80; 84; 116; 118; 161; European Alliance of YMCAs(EAY); 3 171; 206 Finnish YMCA; 11 voluntary work; 11; 52; 79; 80; 82; 106; Jyväskylä YMCA; 300 118; 136; 172; 219; 227–9; 238; 244; four fold program; 187; 188; 213 281; 364 Latin American YMCA; 213 volunteer boards; 15; 296 Paris Basis; 186; 204; 215; 271; 321 volunteer participation; 219; 229; 232––8 refugee work; 3; 120; 201; 216; 244; 320; volunteer’s motivations; 226; 232–41; 244; 321; 333; 351 343; 361 sports; 188 attitudinal variables; 232–4; 236 basketball; 197 contextual variables; 234; 242 volleyball; 197 personality variables; 232–5 triangle principle; 321 situational variables; 234; 237 work with the armed forces; 120; 186; 200 social background variables; 233–5 prisoners of war(POW); 120; 201; 333; social participation variables; 234; 237 361 volunteers; 78–80; 106; 118; 119; 136; 139; World Alliance of YMCAs; 7; 12; 15; 32; 181; 192; 219; 226–34; 239; 242–5; 281; 120; 142; 183; 186; 188; 192; 197; 198; 282; 284; 285; 289; 298; 314; 343; 350 200–2; 204; 213; 215; 216; 231; 244; African-American volunteers; 235 271; 290; 315; 320; 321; 322; 326; 333; voluntary; 8; 61; 71; 104; 196; 202; 206; 207; 340; 343; 344; 359; 361; 364 250; 328; 334 YMCA secretaries; 4; 15; 139; 182; 185; Vonhof, Heinz; 22; 23; 28; 30; 363 186; 279 Wood, James R.; 239; 241; 349 Young Women's Christian Worden, Steven K.; 153; 361 Association(YWCA); 7; 161; 202; 204 World Bank.See international governmental youth; 183; 190; 280; 319 organisations(IGO) youth experience; 9 World Council of Churches.See youth organisations; 164; 189; 190; 191; Christianity:Ecumenical movement 192; 203; 205; 279; 280; 289; 298; 357 World Student Christian Federation(WSCF); youth work; 11; 189; 190; 216; 280 188; 191; 202; 204; 326; 352 World War I; 197; 200 Zald, Mayer N.; 68; 141; 152; 163; 176; 178– World War II; 39; 177; 200 89; 191; 192; 199; 202; 205; 212; 214–6; world view.See belief 225; 327; 329; 354; 364 zeitgeist; 56; 163; 206; 247; 248; 266; 308; Yinger, J. Milton; 121; 364 311; 333–5; 342 Ylijoki, Oili-Helena; 8; 364 Zucker, Lynne G.; 177; 363