This introductory chapter begins by with a simple model of the choices made by nonprofit organizations. It considers a model with four types of actors: a manager (meant to represent the CEO and the board), workers, donors, and customers. Each of these actors has different preferences about the nature of the organization's product. The model focuses on whose preferences come to dominate the firm's decision making. Does the firm ultimately hew toward the preferences of donors, customers, workers, or management? After presenting the model, the chapter discusses donor–worker–customer conflicts in four key nonprofit industries: academia (particularly the better-endowed universities), hospitals, art museums, and the Catholic Church. It argues that all four industries support the basic point of the model: weak incentives mean that workers come to greatly influence the practices of nonprofits. An overview of the subsequent chapters is also presented.
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