An overview of the not-for-profit sector

Several decades ago a chapter giving a legal overview of the not-for-profit sector might have been received with a mix of scepticism and puzzlement. The notion of ‘not-for-profit’ or ‘nonprofit’ was invented in the law and economics discipline after the Second World War, but it has only come into popular usage more recently.Peering back to the beginnings of recorded legal history, what we now consider to be not-for-profit associations can be identified in many societies. It was the decades bookending the turn of the twentieth century that saw a worldwide associational revolution, as an explosion of not-for-profit activity rode on the coat-tails of globalization. Not even one-party states were immune to the revolution, although governments in those states exploited associations for community service delivery while restricting their role in broader civil society. During this period, not-for-profit organizations engaging in private, voluntary activities around the world contributed to creating a global civil society by ‘pursuing public purposes outside the formal apparatus of the state’. There are instances of governments seeking to narrow civil space and limit the range of activities available to not-for-profit organizations. This is happening not only in one-party states but also in liberal democracies, where citizens disengaging from formal political parties are turning to single issue advocacy organizations. At the same time, hybrid legal forms are combining some commonly agreed legal attributes of not-for-profit organizations with attributes of business and government sectors.