Which of the following are possible reasons why there are nonprofit organizations?(please choose all that apply)Select 4 correct answer(s)Asymmetric information and a failure of trustNonprofit as for-profit in disguiseThe altruistic-motive theoryThe government-failure theory

Answered: Which of the following are possible…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Related questions

Question

Which of the following are possible reasons why there are nonprofit organizations?
(please choose all that apply)
Select 4 correct answer(s)
Asymmetric information and a failure of trust
Nonprofit as for-profit in disguise
The altruistic-motive theory
The government-failure theory

Expert Solution

Step 1

A nonprofit organization can be defined as an entity which is driven by a commitment towards social cause in the area of education science, research, religion, art, sports, music and more. The revenue earned by a nonprofit organization is not distributed to shareholders similar to the for-profit corporations, but are further used in fulfilling the social targets. The key requirement of forming a nonprofit organization is serving the public.