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Understanding nonprofit social enterprises: Lessons from Austrian economics

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  • Stefanie Haeffele

    (Mercatus Center George Mason University)

  • Virgil Henry Storr

    (George Mason University)

Abstract

There is a large literature on the role of nonprofit enterprises within society. This literature typically views nonprofits as either substitutes for government enterprises or complements to, and even necessary extensions of, these government efforts. While this literature has improved our understanding of the role and importance of nonprofit social enterprises, how social entrepreneurs identify opportunities, allocate resources, and adapt to changing circumstances has been relatively underexplored. Efforts to fill this gap within Austrian economics have categorized nonprofits and identified the limitations of calculation and coordination in the nonprofit sector and the characteristics of successful and unsuccessful nonprofit enterprises. This strand of literature focuses on the differences between economic calculation in for-profit enterprises and decision making in nonprofit enterprises. We argue that another meaningful aspect to determining the ability of nonprofit enterprises to coordinate plans is whether they are structured more like private enterprises and public enterprises. These insights from Austrian economics shed light on why some nonprofits are more effective than others at achieving social goals.

Suggested Citation

  • Stefanie Haeffele & Virgil Henry Storr, 2019. "Understanding nonprofit social enterprises: Lessons from Austrian economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(3), pages 229-249, September.
    • Handle: RePEc:kap:revaec:v:32:y:2019:i:3:d:10.1007_s11138-019-00449-w
    DOI: 10.1007/s11138-019-00449-w
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    References listed on IDEAS

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    1. Boettke, Peter J. & Coyne, Christopher J., 2009. "Context Matters: Institutions and Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 5(3), pages 135-209, March.
    2. Emily Skarbek, 2014. "The Chicago Fire of 1871: a bottom-up approach to disaster relief," Public Choice, Springer, vol. 160(1), pages 155-180, July.
    3. Emily Chamlee-Wright & Virgil Henry Storr, 2010. "The Role of Social Entrepreneurship in Post-Katrina Community Recovery," Chapters, in: Emily Chamlee-Wright & Virgil Henry Storr (ed.), The Political Economy of Hurricane Katrina and Community Rebound, chapter 6, Edward Elgar Publishing.
    4. Russell S. Sobel & Peter T. Leeson, 2010. "The Use of Knowledge in Natural Disaster Relief Management," Chapters, in: Emily Chamlee-Wright & Virgil Henry Storr (ed.), The Political Economy of Hurricane Katrina and Community Rebound, chapter 3, Edward Elgar Publishing.
    5. Stefanie Haeffele & Virgil Henry Storr, 2019. "Hierarchical Management Structures and Housing the Poor: An Analysis of Habitat for Humanity in Birmingham, Alabama," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 34(Spring 20), pages 15-37.
    6. Emily Chamlee-Wright & Justus Myers, 2008. "Discovery and social learning in non-priced environments: An Austrian view of social network theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 21(2), pages 151-166, September.
    7. Peter T. Leeson & Russell S. Sobel, 2008. "Weathering Corruption," Journal of Law and Economics, University of Chicago Press, vol. 51(4), pages 667-681, November.
    8. Virgil Henry Storr & Stefanie Haeffele-Balch & Laura E. Grube, 2015. "Community Revival in the Wake of Disaster," Perspectives from Social Economics, Palgrave Macmillan, number 978-1-137-31489-5.
    9. Laura E. Grube & Stefanie Haeffele-Balch & ErikaGrace Davies, 2017. "The Organizational Evolution of the American National Red Cross: An Austrian and Bloomington Approach to Organizational Growth and Expansion," Advances in Austrian Economics, in: The Austrian and Bloomington Schools of Political Economy, volume 22, pages 89-105, Emerald Group Publishing Limited.
    10. Virgil Henry Storr & Stefanie Haeffele-Balch, 2012. "Post-disaster Community Recovery in Heterogeneous, Loosely Connected Communities," Review of Social Economy, Taylor & Francis Journals, vol. 70(3), pages 295-314, October.
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    Cited by:

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    2. Mikayla Novak, 2021. "Social innovation and Austrian economics: Exploring the gains from intellectual trade," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(1), pages 129-147, March.

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