Challenges and Opportunities Facing Nonprofit Organizations

Books reviewed in this article:
Lester M. Salamon (ed.), The State of Nonprofit America
Peter Frumkin, On Being Nonprofit: A Conceptual and Policy Primer
Paul C. Light, Pathways to Nonprofit Excellence     

Risk and the Outsourcing of Risk Management Services: The Case of Claims Management

Outsourcing of risk management activities is a well-established practice, involving a range of services from actuarial audits to loss control training to risk financing management to claims administration services. Surprisingly, little work has been done to examine the risks associated with outsourcing risk management activities. This article examines the outsourcing of claims management services by reviewing the research on outsourcing risks and by interviewing leading practitioners. In doing so, the authors draw some provisional observations about risks and risk costs associated with outsourcing claims management services—observations that seem generalizable to all risk management outsourcing.     

Public Opinion and the Role of Government Arts Funding in Spain

While several studies have probed the determinants of public support for government funding of arts and culture in the United States, little work to date has addressed the question in Europe. Yet as private cultural funding increases in magnitude in most Western European countries, the answer to this question has policy implications. This article formalizes the theory of the determinants of this public support in a model, employs public opinion data from Spain to estimate this model, and compares the results with those from the U.S. I find that support in Spain increases strongly with age, but is insignificant in most other variables. The article's empirical results yield several lessons for cultural policy design.     

Corruption,Cooperation and Endogenous Time Discount Rates

Virtually all uses of repeated games tostudy of cooperation assume that people'stime discount rates are exogenous andfixed. Here we offer an evolutionary gameembedded in a multi-period model ofinvestment and consumption in whichindividual time discounts are determined bytheir convergence to values determined byEvolutionary Stable Strategies. Oursubstantive motivation, though, iscorruption and its relationship to economicgrowth. To understand the observedrelationship between levels of corruptionand economic indicators of social welfare,we argue that corruption is a form ofcooperation that requires closeinterpersonal monitoring. If we assume,moreover, that when people discount thefuture greatly the only sustainable formsof cooperation are those that allow forclose monitoring, then our analysis can beinterpreted as a dynamic model of therelationship between corruption andinvestment.     

A Spatial Model of U.S. Senate Elections

The importance of primaryelections is considered within the contextof U.S. Senate elections where senatorsserve overlapping terms and voters areassumed to balance their two senatorsagainst each other. Voters behavestrategically in the primaries butconvergence to the median position is notachieved except as a knife-edge result.More generally, constraints in the partyspace prevent the party of the sittingsenator from obtaining the median'spreference allowing the opposition party tonominate a candidate further away from themedian while still capturing the medianvoter. Empirical evidence supports thenotion that senate divergence is a functionof the state primary system.