In this paper we outline the unique nonmarket and market functions nonprofit corporations perform in the local economy that are important to community economic development. Their key nonmarket functions include the provision of cultural and environmental amenities, stimulus of community development and entrepreneurial activity in the most economically distressed communities, and delivery of numerous human welfare services. Each of these functions enhances the quality of life factors for its residents. A positive spinoff is that as the community becomes a more desirable place to live, location decisions of households and business enterprises are influenced. As for market functions, nonprofit corporations supply essential services which are treated as inputs into the business production process, attract income into the community or region through sales of services to residents outside the community, attract grants and loans that contribute to the circular flow of income in the community, and facilitate seco...