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Witesman provides an institutional theory of the nonprofit. The chapter considers the argument developed by the author in a 2016 Nonprofit and Voluntary Sector Quarterly article. In it, she proposes an institutional theory of the nonprofit that defines its distinction from public and private institutions through (1) the voluntary (rather than coercive) assignment of roles and (2) the use of the good or service by non-payers. The voluntary and redistributive nature of such nonprofit-type institutions makes them primarily compatible with the distribution of goods that are non-subtractable and excludable (toll goods). This view is in contrast to legalistic or sector-based theories of the nonprofit.
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