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Organizational Failure and Organizational Revitalization in the Relationship Between Government and Non Profit Organizations

The economic literature on NPOs stands on four theoretical “legs”: Weisbrod’s conception of their emergence in response to differentiated preferences for collective goods; Hansmann’s theory of trust-signaling through the non-profit form; the economics of altruism and commitment; and the theory of ideological entrepreneurship. Salamon sought to augment and reframe these models so that they could address “voluntary failures” and collaboration between government and NPOs. A theory of NPO leadership is developed to explain how the capacity of NPO leaders to sustain stakeholder commitments may be affected by government stakeholdership and why organizational revitalization through collaborative partnerships with government agencies may require a more appreciative leadership style.