“They Are All Organizations”: The Cultural Roots of Blurring Between the Nonprofit,Business,and Government Sectors

The Entwining of Government, Business, and Charity

The literature contains many descriptions of the blurring of traditional boundaries between business, government, and charity (e.g., Billis, 1993; J. G. Dees & Anderson, 2003). Many studies report on related phenomena such as the creation of “hybrid” organizations (e.g., Billis, 2010; Evers, 2005; Pache & Santos 2012) and the combining of multiple logics within organizations (e.g., Binder, 2007; Thornton, Ocasio, & Lounsbury, 2012). But there is less attention to the fact that all this blurring is associated with, and indeed is a product of, the extraordinary expansion of formal organization per se, in numbers and internal complexity, in every social sector, and in every national setting, since the Second World War. Drori et al. (2006) show, for example, that post-war growth of international nongovernmental organizations and intergovernmental organizations (in a range of fields, in a variety of countries, and worldwide) has far outpaced either population growth or economic growth (see especially the figures on their pp. 9-11).

Prevailing explanations for the erosion of sector boundaries are rather economic in nature, attributing the trends to government decentralization and increased competition for revenue among entities promoting the public good. These pressures are thought to lead to more entrepreneurial activities among nonprofits and to the incursion of for-profits into realms once the sole purview of government and nonprofits. Thus, dominant arguments assume that public organizations increasingly take on hybrid forms containing public and private elements because of resource dependencies (e.g., Billis, 1993, 2010; Ferris, 2001; Froelich, 1999; Kramer, 2000; Saidel, 2001). Crystallizing this view, Knutsen (2012) says, “some NPOs [nonprofit organizations] are perceived as being increasingly institutionalized into ‘hybrids’ of private and public organizations due to resource-based relationships with the private and public sectors, including financing, competing, or contracting relationships” (p. 986).

This view has its roots in theoretical models of the nonprofit sector developed in the 1970s. Most relevant, a public choice model of nonprofit activity argues that both the putative shrinking of government and increasing social diversity lead to increased demand for nonprofits (Weisbrod, 1975). Nonprofits are thought to overcome the “categorical constraint” of democracy (Douglas, 1987) by satisfying interests that are not represented by the median voters and promoting freedom and pluralism (Salamon, 1999). ¹ Extending these early accounts of the sector to the issue of blurring boundaries, Weisbrod (1997) posits that due to greater demand for their services, nonprofits must search for new revenue streams and turn to market-based approaches. Nonprofits, thus, are increasingly active in realms once dominated by government, and use business-like practices to fund these activities. In his words:

. . . the sector’s growth necessitates finding ways to increase revenues, and that has brought side effects, particularly as nonprofits have become more and more “commercial.” In the process, borders between the nonprofit and both the for-profit and public sectors are being crossed . . .. (Weisbrod, 1997, p. 541)

In these economic lines of thought, two features of blurring between boundaries are highlighted. A first emphasis is on revenue diversification, particularly through the use of earned income activities (Froelich, 1999). That is, nonprofits are becoming more like businesses through the use of commercial activities that stem from financial needs (Skloot, 1987; Weisbrod, 2000). In general, nonprofits’ market involvement strategies can be categorized as fees for services, commercial ventures, and cross-sector partnerships (Young & Salamon, 2002). Eikenberry and Kluver (2004) emphasize that “marketization” of the nonprofit sector, consisting of commercial revenue generation, contract competition, the influence of new donors, and social entrepreneurship, is a core area where the lines between business and nonprofit are blurring. Similarly, a study by the Nonprofit Sector Strategy Group (2001b) at the Aspen Institute highlights the marketization of nonprofits through reliance on and competition for revenue from fees and services. Much of this literature advocates that nonprofits become more market-focused, often using phrases such as “social enterprise” or “social entrepreneurship” (e.g., J. D. Dees, 1998; Oster, 1995), or aims to help practitioners learn to generate revenue (e.g., J. G. Dees, Emerson, & Economy, 2002; Massarsky, 2005) and balance tensions arising from pursuit of both mission and profits (e.g., Brinckerhoff, 2000; for a critical view, see Oakes, Townley, & Cooper, 1998). Recent evidence, however, indicates that the proportion of revenue generated from earned income, program fees, or program revenues has not increased over time (Child, 2010). And additional research suggests that most nonprofits fail to generate earned income (Foster & Bradach, 2005). This makes it clear that the application of commercial strategies is only a subset of the more general trend of blurring boundaries.

Second, mainstream approaches suggest that the lines between nonprofits and government are also eroding as a result of expanded subcontracting that accompanies government decentralization (Musolf & Seidman, 1980). In nonprofit research, one well-known finding is that dependence on government funding reshapes nonprofit governance, leadership, management, and accountability structures in ways that transform them into quasi-governmental agencies (Smith & Lipsky, 2009). Furthermore, competition for government grants between nonprofits and businesses amplifies market pressures (Nonprofit Sector Strategy Group, 2001b). In a comprehensive volume outlining the areas of cooperation and conflict between government and nonprofits, Boris and Steuerle (2006) indicate the key issues include government spending on service contracts, growing nonprofit reliance on fee-for-service revenues, and growing demands for improved accountability and effectiveness among charities (see also Feiock & Andrew, 2006, for an overview of nonprofit–government relations). In sum, much research characterizes nonprofits as dependent on changes in the state and the marketplace, and a number of publications make the point explicit using the phrase “between state and market” (e.g., Bowlby & Lloyd Evans, 2011; Phillips, Chapman, & Stevens, 2001). It is curious, however, that core changes in the nonprofit sector are framed as following from changes in government and business; in practice, all sectors are changing simultaneously, and the historical patterns of relations among them are dynamic (Ostrander, 1987).

Undoubtedly, the neoliberal trends of decentralization and privatization underpin part of the transformation of the nonprofit sector. But the mainstream view of subcontracting services and funding pressures as the primary drivers of blurring boundaries misrepresents and underestimates the scope of this social transformation in several key ways. In one sense, these views are overly nonprofit-centric, ignoring fundamental and related changes occurring simultaneously in all sectors. In another sense, they deny the autonomy of the nonprofit sector by arguing that changes to nonprofits are driven by trends in businesses and government, obscuring instances when relatively autonomous nonprofits are directly shaped by their changed cultural environment. Furthermore, standard views are excessively economic, highlighting the rise of commercialism and market pressures at the expense of powerful underlying cultural and ideological shifts.

It is not simply the case that nonprofits are becoming more like government and business—the blurring is multi-directional. As is well recognized, government agencies are also directed to acquire elements such as strategic plans and evaluation processes, under general neoliberal ideologies such as New Public Management (Henisz, Zelner, & Guillén, 2005; Hood, 1991). And governments also pressure nonprofits to adopt more commercial models (McBratney & McGregor-Lowndes, 2012). Perhaps less commonly noted, public governance, the historical purview of government, is increasingly shaped by nonprofits, perhaps particularly by professional associations and other lobbyists (Walker, 2014). In a study of Kenya, Brass (2012) shows changes in both policy and administration as government service provision agencies increasingly hire former nonprofit staff, are influenced by nonprofit lobbying, and mimic nonprofit service provision strategies. Furthermore, it is not solely the case that nonprofits take on some tasks of government; historically, governments have also expanded to take over domains initiated by nonprofits and the community sector (for instance, “Repair of Bridges, Ports and Highways” and “Maintenance of Houses of Correction” were appropriate charitable activities in the 1601 Statute of Charitable Uses, often cited as the foundation of charities law in the United Kingdom and the United States).

Firms are also transformed by new pressures to look like responsible actors (Brunsson & Sahlin-Andersson, 2000; Drori, Meyer, & Hwang, 2009). They are increasingly obligated, by law and public pressure, to take on expanded concerns such as environmental protection, corporate social responsibility and philanthropy, employee rights and job satisfaction, workplace diversity, community engagement, and consumer safety (e.g., see Dobbin, 2009, for the transformation of firms in reaction to Equal Opportunity Employment laws or McWilliams & Siegel, 2001, for a discussion of corporate responsibility). Programs for workplace charity and corporate philanthropy are increasingly common (Barman, 2006; Froelich, 1999). And, at the most extreme, we see the rise of new forms, such as the B-Corp or L3C (see Mair & Martí, 2006, for one effort to define social entrepreneurship). Recognizing the changing nature of business, the Aspen Institute commissioned a study of firm-nonprofit relations, concluding that new patterns of interaction are emerging, including donations of in-kind support such as technical and managerial expertise, the rise of philanthropy as a core part of business strategy, the rise of “cause-related marketing” and “sponsorship” arrangements, and increasing community partnerships between firms and nonprofits (Nonprofit Sector Strategy Group, 2001a). What is notable is that these changes imply a shift in firm behavior toward incorporating more public good elements, a change that remains unexplained if we consider blurring boundaries only from a nonprofit perspective.

At the same time, many changes to government and nonprofits are routinely—but incorrectly—depicted as moving more toward business patterns. Kearney and Hays (1998) describe, for instance, how free market ideology is at the core of the New Public Management and “reinventing government” trends, which make “public servants more like corporate workers . . . Reinventing government tends to strengthen the hand of private sector forces” (p. 46). Related, Dart (2004) recounts how nonprofit managers colloquially lump commercialization and the adoption of formal organizational tools together into the category of “business-like” practices. Despite this common rhetoric, it is simply false to think that many formal tools intended to improve nonprofits are straightforwardly transferred from the business world. For instance, strategic planning and its many successors have roots in the military (O’Donovan & Flower, 2013). Codes of conduct and related statements are other managerial tools spreading rapidly through all sectors; these have their roots in medicine. In fact, the central historical precursors to formal organization as a form of social structure are the national state (including the military) and church bureaucracies, as well as public structures like universities and hospitals. The modern private, profit-oriented corporation came later and only emerged in the context of much doubt and criticism (e.g., Manne, 1962). Many of the practices commonly described as “business-like” thus have roots that predate the modern firm. And many of practices that spread across sectors have less to do with competition or revenue and more to do with ideas of the general public good, accountability, and proper management (e.g., codes of conduct, whistleblower policies, auditing practices, or equitable employment practices).

A burgeoning area of public administration research on the “new public governance” is very much in line with our observations that neoliberal market rhetoric fails to capture some of the most fundamental changes in public organizations (Koppenjan, 2012; Osborne, 1996, 2010). These studies emphasize that the core shift in government is toward “a plural state, where multiple interdependent actors contribute to the delivery of public services, and a pluralist state, where multiple processes inform the policy-making system” (Osborne, 2010, p. 9). In this view, politics, policy, and administration are intertwined and embedded in a common institutional environment (Kooiman, 1999). Thus, governance increasingly takes the form of networks and partnerships across many types of actors, rather than just contractual market relations or hierarchical bureaucratic ones (Keast, Mandell, & Brown, 2006; Keast, Mandell, Brown, & Woolcock, 2004; Lowndes & Skelcher, 1998; Powell, 1990; Rhodes, 1996). Aligned with this work, our approach highlights that cultural shifts provide an explanation for why it has become a priority for many government agencies in many countries to take on this pluralistic and partnership-based approach to governance.

As a final weakness of instrumental explanations for blurring, it is important to point out that voluntary associations (and firms and governments) of all shapes and sizes adopt the trappings of formal organization over and above resource pressures and beyond any known utility in terms of market competition. For instance, all sorts of charitable associations adopt formal organizational tools like planning and evaluation—not just the nonprofits that subcontract, have the most competitive fields, or face the greatest resource shortages Hwang & Powell 2009). Large service providers may have strategic plans and quantitative outcomes measurement, but so do some small, voluntary parent–teacher organizations and recreational clubs. Moreover, many formal organizational structures are adopted although their link to final outcomes, whether profit or the public benefit, is highly uncertain. It is unclear, for example, whether the creation of codes of ethics and whistleblower policies reduces instances of professional misconduct. And debates abound over the utility of tools such as outcomes measurement and strategic planning. ² Many alleged “improvements” are better characterized as fashions than established and definitive means of increasing competitiveness, as one practice after another arises as a purportedly universal solution to problems of efficiency and effectiveness (Miller & Hartwick, 2002; Staw & Epstein, 2000).

The terms “nonprofit” or “nongovernmental” organization, routinely used today to describe the charitable sector, imply that the current organizational form of voluntary associations is in some way derivative of the profit-driven world or government, but this is a mistake both causally and conceptually (Lohmann, 1989; Salamon, 1987). Related, the phrase “business-like” is often used to describe practices in the public and nonprofit sector that are better thought of as more generally managerial or professional (e.g., formal planning, performance assessment, evaluation). Concurring with Dart (2004), we observe that the literature on blurring boundaries overemphasizes commercial activities and market pressures and underestimates the rise of more general formal organizational and managerial practices. The distinction goes beyond semantics; the language of business falsely creates the impression that formal organizational tools and practices come from firms or profit-driven motivations, when in fact they derive from broader culture principles that shape firms, charities, and government agencies alike, as we describe in the next section. ³

From Charity to Philanthropy to “Organization”

We propose an alternative, cultural explanation for the blurring of sectoral boundaries, one that accounts for its multi-directionality and expansiveness. We contend that macro-historical shifts—dramatically intensified since World War II, and even more during the current neoliberal period—underpin the rise of a new form of social structure called “organization,” seen as a positive social actor (Brunsson & Sahlin-Andersson, 2000; Krücken & Meier, 2006) rather than a passive bureaucracy or pious donor or private merchant. Our arguments are rooted in the common observation that as historical loci of legitimate social authority wane, the individual—seen as an empowered social actor—comes to be seen as ascendant in a variety of forms of liberal and now global society. ⁴ Two aspects of expanding individualism are most relevant here. First, there is increasing belief in human ability to shape and control outcomes using scientific (including social scientific) means; second, and related, is the growing recognition of human empowerment (and correspondingly, responsibility).

Following sociological definitions, our use of the term science and its permutations extends beyond referring to particular disciplines or domains (e.g., chemistry, biology, or medicine). Rather, science refers broadly to a cultural model that gives authority to systematically developed knowledge and university-trained experts, in contrast to alternative bases of authority such as charisma, tradition, or tacit and implicit forms of knowledge (Drori, Meyer, Ramirez, & Schofer, 2003). By human empowerment, we mean a multi-faceted expansion in the socially defined rights, obligations, interests, and capacities of all individuals (Meyer & Jepperson, 2000). Together, these abstract and universalistic principles of science and human empowerment are the cultural foundation for the emergence and growth of the type of social structure that today we call “organization.”

The massive historical trends of expanding science and human empowerment in the post-War era are widely reported (see Price, 1961, or Drori et al., 2003, for a general overview on science; Elliott, 2007, Stacy, 2009, and Lauren, 2011, for overviews on human rights). Nonetheless, we provide a rough timeline before turning to consider how these shifts are linked to the rise of an organization. Cultural transformation unfolds over hundreds of years, but the end of World War II and rise of neoliberalism are particularly important junctures for explaining the rise of the core cultural changes and their consequences for organization. Far in the background, the initial expansion of scientific thinking produced early government administrative structures (Weber, 1922/1978). Feudal religious polities with medieval governance structures evolved into the secular, administrative, and legal structures of modern nation-states (Tilly, 1990). In the first part of the 20th century, an explosion of social sciences, continuing into the present, led to the development of scientific principles for managing businesses (as with Fayol, 1949, or Taylor, 1914; see Frank & Gabler, 2006, for an overview) and generated more systematic visions of philanthropic giving. In the charitable sector, scholars often describe a shift from charity to philanthropy, with the former focusing on religious obligations to alleviate individual suffering and the latter focusing on developing systematic, rationalized, and putatively actually effective resolutions to social problems (Robbins, 2006; Sealander, 2003). Early bureaucracies, which included governments, the church, armies, and early corporations, had a rationalized, quasi-scientific form. But they were centralized structures intended to effectively and efficiently carry out the goals of a sovereign or owner; lower levels of the hierarchy had little autonomy or empowerment.

Also far in the backdrop, Enlightenment era philosophy helped consolidate and expand secular individualism; realms like education, art, and music became matters of the general public, rather than the pastimes of an elite few (Sealander, 2003). Furthermore, the French and American Revolutions played central roles in the development of individual rights. As issues of justice and equality expand, they promote visions of democracy and undermine notions such as the divine right of kings (Bendix, 1980). Consequently, highly centralized social structures, like the classic bureaucratic state, lose charisma. In tandem, ideas of civil society as a distinct social sphere flourish. But early voluntary associations were relatively informal expressions of community, unlike the highly structured nonprofit organizations common today.

More immediately, especially since World War II, continued political, cultural, social, and economic integration, often at a global level in reality and perception, has characterized the world (Meyer, Boli, Thomas, & Ramirez, 1997). Particularly in the last few decades, the authority and charisma of the nation-state (though not its administrative structures) have declined with the diffusion of neoliberal principles. This is accompanied by a longer-term erosion of other traditional forms of communal or corporate social structure, such as the church, family, and stratified local communities. Thus, the most rapid transfer of rights from nation-states to individuals has occurred since the 1990s, and the normative or cultural changes have been dramatic and worldwide (Elliott, 2007; Lauren, 2011). The global character of the changed rules must be emphasized—it transcends, and indeed feeds back on historic American individualism in arenas such as race and ethnicity. Thus, although some patterns of the rise of formal organization appear earlier (most notably in the early expansion of the corporate form in the United States; Kaufman, 2008), it is only in the period since World War II that we have the global spread and rapid expansion of this unique form to many domains—precisely parallel to the underlying global cultural expansions of individualism and scientific rationalism that we see as undergirding it.

The cultural principles of rationalized science and individual empowerment constitute organizations, first, by providing a basis for widespread purposive action in a growing array of substantive domains and, second, by providing a framework for structuring the relevant human activity. The rise of science and human empowerment over the longue durée, combined with the declining charisma of the nation-state and other older social structures, considerably expanded the range of arenas where empowered human initiative seemed reasonable (Toulmin, 1992). Underpinned by these cultural shifts, individual activity could extend into new domains, such as the abolitionist movement, children’s rights, environmentalism, or animal welfare. Such long-term changes greatly intensified after World War II, and operate powerfully in the whole period since, as the students of the scientific and human rights expansions demonstrate. This generated both increased numbers of organizations in previously unorganized arenas and the increased internal elaboration of existing structures as these adapted to expanding external obligations. For example, as cultural pressures to respect a range of rights increase, it now becomes equally sensible for both Nike and the Red Cross to have diversity on their boards, policies for work–life balance, and formal efforts to protect children (by preventing them from making soccer balls or donating blood). Thus, under these new cultural principles, traditional social structures—government agencies, firms, charities, hospitals, and universities—are reconstituted.

Science and empowerment not only expand the domains of human activity, they also provide cultural templates for how activity should be conducted. Following scientific principles, means and ends should be systematically specified, measured, and monitored, while experts and professionals of all sorts proliferate to provide legitimate knowledge. And following principles of human empowerment, rational and responsible and organized human action is seen as both possible and necessary. Decisions and activities should be participatory and respectful of rights. The interconnectedness of science and rights is eloquently captured in Offenheiser and Holcombe’s (2003) discussion of the transformation of Oxfam’s international development work into a “rights-based” approach. Because all persons have rights and capacities, individuals can and should be empowered to systematically solve their self-determined social problems, in part through education.

Table 1 provides examples of how the cultural principles of science and empowerment provide both a basis for organizing in a growing array of substantive domains and a framework for structuring activity. Independently, neither science nor empowerment constitutes contemporary organizations; what makes this form distinct is the combination of the two (Meyer & Bromley, 2013). For instance, the fields of “public administration” and “management” in Quadrant I combined with the rationalized structures described in Quadrant II constitute centralized, hierarchical forms of social structure—bureaucracy. Conversely, ideas of empowerment alongside a participatory structure, described in Quadrants III and IV, generate loosely structured voluntary associations or social movements, not the formalized, professionally staffed nonprofit sector of today. The Occupy Wall Street movement is a recent example. It is described as leaderless and structureless, relying on emergent leadership based on charisma, rather than formal roles, and combining multiple social movements, rather than systematically pursuing formally stated objectives (Gitlin, 2012). Its form is a striking anomaly in today’s world, attracting much academic and popular attention. Bringing features from all four quadrants together, we arrive at what we now recognize as a proper modern organization. The table highlights how science combined with empowerment constitutes contemporary organization and provides the basis for the expansion of this form to virtually any substantive realm imaginable.

OPEN IN VIEWER

Table 1.

Examples of the Cultural Constitution of Contemporary Organization.

	Substance	Structure
Science	I	II
	Public administration	Systematic
	Economics, finance, marketing, management	Establish means-ends causality
	Health, medicine, psychology	Link causality with resources; efficiency and effectiveness
	Natural world including space, air, water, land	Collect and analyze data
		Draw on trained expertise
		Evaluate and monitor process and outcomes
Empowerment	III	IV
	Respect and protect rights of others; civil rights, women’s rights, children’s rights	Participatory
	Capacity to understand natural and social phenomena	Transparent
	Obligation to protect natural and social worlds	Accountable

Recognizing the cultural sources of recent changes to social structure leads to the question of how abstract principles reshape concrete realities. We note three main channels through which the cultural principles of science and rights transform local settings: expansions in soft law (Mörth, 2004) and formal state regulation, various forms of counting and accounting (Power, 1999), and execution of these tasks by the massification of professionals (Wilensky, 1964) created by changes in higher education (Schofer & Meyer, 2005). These processes support the phenomenon described as institutional isomorphism (DiMaggio & Powell, 1983) around the models of contemporary formal organization. Classically, the concept of isomorphism was developed to explain increasing similarities among members of an organizational field, but it could also describe the process of blurring across sector boundaries. ⁵ Phrased more intensely, through isomorphism on a grand scale, “organization” becomes a field of its own. Cultural conditions, transmitted through hard and soft law, counting and accounting, and professionalization, generate isomorphism across social structures culminating in a new form—“organization.”

As an example, the rise of norms and laws defining humans as equal and empowered generate formal structures related to promoting diversity and equality in hiring, promotion, and in governance (e.g., see Daley, 2002, for nonprofit board diversity, or Dobbin, 2009, for trends in firms). A parallel trend occurs in the rise of participatory decision-making and collaborative governance processes (e.g., see Epstein, Alper, & Quill, 2004, for medicine; Kernaghan, 2000, for changes in government agencies; or King, 1996, for changes in schools).

The emergence and expansion of standardized methods for counting and accounting likewise drive entities to become more structured and renders them more alike. Quantification creates a basis for comparison on various dimensions, making previously distinct social structures comparable (Espeland & Stevens, 1998). So, today, charitable work (even the voluntary sort) is no longer thought of as unproductive labor; instead, it is analogous to other forms of production, and its contribution to the economy is calculated annually. A recent study reports, for instance, the share of volunteering’s contributions to Gross National Product across countries in 1995 (Roy & Ziemek, 2000). Related, there are now measures that enable performance comparisons across organizations, even in different industries, sectors, and countries (see, for example, a discussion of nonprofit versus for-profit performance in Keller, 2011, or the research produced using the World Management Survey Website, 2013). We can also now rate and rank organizations on such dimensions as their performance, transparency, accountability, and other forms of social responsibility, enabling the transposition of concerns from one domain into another and pressing organizations to develop similar structures. A number of recent studies examine the creation of charity watchdogs (Lammers, 2003; Szper & Prakash, 2011) and the rise of measures of social value (see Austin & Seitanidi, 2012, for a review).

Professionals with university training are also central in transforming older social structures into organizations. Higher education is a key location where socialization into the culture of science and rights takes place. In support of this logic, a path-breaking study drawing on a survey of 200 San Francisco Bay Area nonprofits found that when executives receive managerial training (i.e., with a master’s of business administration, master’s in public administration, or certificate in nonprofit management), their nonprofits have more extensive formal structures, such as formal planning, independent financial audits, quantitative program evaluations, and consultants (Hwang & Powell, 2009). In the realm of professional training, Roseanne Mirabella and colleagues have collected detailed data on the growth of nonprofit degree programs over time (Mirabella, 2007; Mirabella, Gemelli, Malcolm, & Berger, 2007), which both indicates and facilitates more formal structuration in the nonprofit sector. Overall, evidence of professionalization in the nonprofit sector, often linked to legitimacy and funding benefits, is widespread (Alexander, 2000; Guo, Brown, Ashcraft, Yoshioka, & Dong, 2011; Stone, 1989; Suárez, 2011). ⁶

A brief example, drawn from the environmental movement, helps illustrate these arguments. At one time the natural world was a mystery to humans, under the control of the fates and gods. Gradually, natural phenomena became regarded as something that could be understood and often shaped by humans. With further expansion, scientific work generated evidence documenting how human activities, especially industrial ones, damaged the health of people, animals, and the planet. When combined with ideas of rights, this knowledge spawned activist groups that use the normative pressure of soft law to influence firms and governments, and sparked the creation of much formal regulation (such as the Environmental Protection Agency and its policies and laws). And, following scientific cultural principles, both activists and government themselves tend to use systematic, evidence-based methods used for protecting the environment, often emphasizing tools for tracking, rating, and monitoring environmental issues. For instance, there are now many new ways of measuring environmental damage or greenness (such as the Toxic Release Inventory, Leadership in Energy & Environmental Design certification for buildings, and ratings of firm environmental performance), and many related degrees and professionals have emerged to support specialization in such areas (such as degrees in environmental sciences or environmental management, and positions for sustainability officers). Overall, as these pressures expand at the societal level, any given entity is more likely to include some kind of environmentalism in its formal structures, and is likely to do so in systematic ways that allow for monitoring, reporting, and evaluating progress on environmental issues.

Overall, modern social sectors—we have emphasized particularly the charitable world—are related less to discrete religious and political visions and more to an emerging, secular definition of the “public benefit,” where individual rights and capacities and systematic, scientific methods take center stage. As older social structures, including charities, businesses, and governments, become more shaped by science and empowerment, they become less distinct and more of a generic form called “organization.” It becomes possible to observe that “although there are many differences between collectivities like factories, prisons, and government agencies, they share one important thing in common: they are all organizations” (Maguire, 2003, p. 1, italics added).

Discussion and Conclusion

Cultural changes generate blurring between sectors in three ways. First, the principles of science and human rights and empowerment are universalistic. As a result, new domains that get organized under these ideologies cut across older social structures, leading to areas of substantive overlap. Conceptually, measures of workplace greenness and equality apply as much to the United Way as to Microsoft, making these entities more alike. Second, the method of organizing called for by principles of science and rights cuts across older social structures, leading them to look more similar. Any type of organization, it is now imagined, can and should conduct a formal plan or use outcomes evaluation to assess goal achievement. Third, the growing overlap in substance and form facilitates actual increasing interconnections between once-distinct forms of social structure. It becomes plausible for firms and nonprofits to have partnerships, and for staff to move between sectors, and it generates growing areas of competition and conflict. These growing partnerships, collaborations, and connections lead many to observe social structures of all types increasingly take the form of networks, rather than markets or hierarchies (Osborne, 2010; Powell, 1990).

Our arguments call attention to the fact that boundary erosion is not a one-sided transformation of nonprofits into more business-like entities. Many standard features of contemporary organizations, including firms, are neither directly attributable to the pursuit of profits or power, nor structured directly around the pursuit of one specific goal (as in the development of corporate social responsibility movements.). Instead, organizations reflect the pursuit of multiple purposes that come from cultural principles endowing human actors (both individual and organizational) with the right, responsibility, and capacity to develop and use scientific approaches (including scientific management) for identifying and solving problems of the natural world and human societies (seen in efforts such as the Global Compact, the Global Reporting Initiative, or the social responsibility elements of many International Organization for Standardization [ISO] certifications). Examples of these standard features include formal structures designed to manage uncertainty on many different fronts (e.g., strategic plans, theories of change), as well as those that promote issues of the public good (e.g., transparency, accountability, equality, and protecting the natural world). As the realms where human initiative seems reasonable and necessary expand, it becomes possible and necessary for individuals and organizations to attend to increasingly diverse concerns within the same formal structure. Such structures, taking the forms of autonomous and responsible decision-making formal organization, transcend older sector divisions in society.

We readily recognize that the formal displays involved can be superficial and only symbolic or that they can be an integral part of an organization. There are obviously many disputes about whether expanded modern organizational structures are beneficial for their intended outcomes, and we take no position here. We focus on the long-term transformation of informal voluntary associations into formal nonprofit organizations. But our arguments also apply to firms and governments. This recognition and explanation of the multi-directionality of boundary blurring is one of the central conceptual themes of our arguments. The use of market-based practices to find additional revenue and pursue social ends is certainly one element that contributes to the blurring of boundaries, but the scope and scale of such activities extend far beyond their known utility. The transformation of charities into formal nonprofits includes a wide range of practices that are, at best, extremely weakly tied to revenue, such as the adoption of codes of ethics, conducting formal audits, and seeking to include diversity on boards and in management.

It is easy to decry the massive social changes we have outlined, along with the associated transformations from high modernity to a more universalized, globalized, and rationalized post-modernity. Turning older religious, educational, medical, and charitable institutions—with their professionals and structures operating under the broad authority of the national state—into human service organizations often ironically seems to undercut the “human” dimension. That is, the evolving principles of rationalized human actorhood tend to take precedence over the specifics and particularities of the social problems at hand. Of course, we tend to be most conscious of the inconsistencies involved in considering charitable sectors of social life, as in Ferguson’s (1990) account of aid programs in Lesotho. But they apply equally to the sometimes brutal rationalizations and standardizations of the commercial sector, and dramatically to governmental organizations as they elaborate (e.g., Scott, 1998).

So there are constant efforts to revert to claimed traditions, with more human and communal elements. Such efforts tend to involve a good deal of romanticism about an imagined past. And, ironically, they often end up supporting yet one more dimension of organization—perhaps an additional component to an organization’s human resources department. With the rise of rationalized organization in all sectors comes an expansion of equally rationalized identity work.

We do not offer an overarching moral judgment of the trend toward formal organization in charitable work. Some see the differences between sectors as relatively immaterial and are untroubled by the trend (J. G. Dees & Anderson, 2003). For instance, in response to a query about business schools that have programs for nonprofits, one well-known scholar responded, “. . . our primary focus is on organizational theory. We believe you can apply it to any type of organization” (Orgtheory.net, 2012). Others call for greater attention to the unique elements of public and nonprofit management (Frumkin, 2002). A number of excellent studies document how nonprofits try to maintain their expressive (or identity) functions in spite of increasing formalization, and how they combine charitable goals with more instrumental pressures (Chen, 2009; Knutsen, 2012; Knutsen & Brower, 2010; Suárez, 2010). Modern universities may have lost the old teacher–student relationship, but now display elaborate commitments to the human side of education (e.g., with enlarged student affairs programs and student evaluations). Modern medical establishments display similar identity commitments to patient satisfaction, as do contemporary firms and charities of all sorts.

As traditionally separate sectors shift toward formal, and more standardized, forms of organization, the historical distinctions between them come to increasingly rest in legal and scientific definitions rather than in functional purposes. Today, we know a nonprofit is such because it has the appropriate legal status. It becomes harder and harder to determine an organization’s form (business, government, or charity) based on functional activity alone. Our view emphasizes that this blurring of sector boundaries stems from cultural shifts that unfold over a long period of time. Such changes, rather than narrower and more recent marketization pressures, account for much of the blurring between sectors and much of the overall organizational expansion.