Definition
“Benefits theory is based on the premise that SPOs [social purpose organizations] have missions and services aimed at benefitting various clients, consumers or constituents directly through their goods and services, for which they or their sponsors are willing to pay” (Young 2017, p. 41). Benefits theory stipulates that these goods and services can be characterized by their public/private nature which, in turn, implies the efficacy of particular modes of finance. For example, goods and services that are essentially private in nature will be amenable to financing through fees while public goods will require philanthropic or governmental support. In its simplest form, these resemble the conventional categories of public and private goods formulated in microeconomics based on the concepts of excludability and rivalry (Young et al. 2019, Chap. 13). However, to account for the mixed public/private nature of many goods and services provided by nonprofits and social enterprises,...
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References
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Young, D.R., Searing, E.A.M. (2022). Benefits Theory of Nonprofit Finance. In: List, R.A., Anheier, H.K., Toepler, S. (eds) International Encyclopedia of Civil Society. Springer, Cham. https://doi.org/10.1007/978-3-319-99675-2_9573-1
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