The Review of Austrian Economics

, Volume 32, Issue 3, pp 229–249 | Cite as

Understanding nonprofit social enterprises: Lessons from Austrian economics

  • Stefanie HaeffeleEmail author
  • Virgil Henry Storr


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.


Austrian economics Social learning Civil society Civic associations Nonprofits 

JEL codes

B53 L31 L33 O18 



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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Mercatus Center George Mason UniversityFairfaxUSA
  2. 2.George Mason UniversityFairfaxUSA

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