Nonprofits as Social Capital and Agents in the Public Policy Process: Toward a New Paradigm

Abstract

This article explores a new, universal, and theoretically inclusive approach to understanding the performance and purpose of nonprofit organizations in today’s world. This approach envisions the nonprofit organization as a social capital asset and agent in a specific relationship to the public. This relationship is depicted in a principal-agent paradigm and the performance is in the public policy process. The public policy arena is the nonprofit’s analogy of the firm’s marketplace. Nonprofits do more than fill in for market or government failures. They also regulate, facilitate, assist, and modify markets and play a significant role in every aspect of public policy, that is, from determining party platforms to the implementation of policies. In the public policy process, they have a comparative advantage as agents of citizens and firms.