In effect, nonprofit organizations can provide entrepreneurial responses to address public problems. This capacity for innovative problem solving derives from trust, philanthropy, volunteerism and commitment that nonprofit organizations embody. Nonprofit organizations engender trust because they are not motivated by profit-making. Although nonprofit organizations are not immune from economic constraints, the prohibition on their ability to distribute profits reduces the pressures and incentives for nonprofit organizations to be diverted from their mission. Thus, nonprofit organizations can play an important role in delivering services that are susceptible to exploitation by the profit motive such as health care and social services.
Nonprofit organizations rely upon the generosity of individuals, corporations and foundations.
In addition, individuals will volunteer their time to nonprofit organizations that often have limited paid manpower. This generosity enables nonprofit organizations to meet societal needs that those in need are unable to pay for themselves in the market and that others are unwilling to pay for through taxes. Thus, the philanthropy of the nonprofit organization represents the voluntary pursuit of the public interest. Nonprofit organizations embody the commitment of civic entrepreneurs. Just as we are coming to understand and appreciate the significance of the nonprofit sector, the negative impacts of transformations in public institutions and markets threaten to weaken nonprofit organizations.