The meaning of non-profit mission breadth: A constitutional economics perspective

Abstract

Given the non-profit management imperative of formulating optimally broad mission statements, this paper explores the meaning and the determinants of non-profit mission breadth. By adopting a constitutional economics perspective, the paper argues that mission breadth is ultimately determined by the trade-off between costs of collective decision-making in non-profit organizations and transaction costs of creating and maintaining these organizations. Developing optimally broad missions is shown to result in minimizing the sum of these costs, thus leading to an expansion of the non-profit sector and to an improvement of its problem-solving potential.