Cornell University Press
December 18, 2003
The term third sector is a label for organizations in the economy that are neither traditional for-profit businesses nor government agencies. They have similarities to what in international development work are called “nongovernmental organizations” (NGOs), but they are more than aid agencies. U.S. domestic third-sector organizations are well-known in their familiar forms of hospitals, universities, social service agencies, and charities, and each of these organizations can contribute to development. Less familiar is a new generation of entrepreneurial nonprofits, cooperatives, and credit unions that have as one of their objectives building stronger local economies. While the book begins with an overview of the entire nonprofit world, its subject is these development-oriented organizations.
One reason to pay greater attention to the third sector is that it is the fastest-growing part of the U.S. economy. At the national level it now makes up approximately 10 percent of economic activity – somewhat more if counting employment, somewhat less if counting the value of economic transactions. In some regions, cities, and communities the third sector is a far greater economic factor.
For healthy parts of the economy the process of capital accumulation goes on routinely. In poorer areas something else has to jump-start the process and keep the surplus, the newly generated capital, in the communities and available for investment. This is the role that some dynamic third-sector organizations can play, along with their other generally good work. The organizations and the process are what this book is about.