Grønbjerg, PaarlbergCommunity Variations in the Nonp ofit Sector Community Variations in the Size and Scope of the Nonprofit Sector: Theory and Preliminary Findings

Nonprofits reflect and shape community conditions. Understanding the nature of this relationship is important if we are to fully comprehend the role nonprofits play in contem-porary society and if policy makers are to make effective use of the sector to implement local responses to community needs. Using data on Internal Revenue Service–registered nonprofits for Indiana counties, the authors examine how theories of demand, supply, and social structure predict the overall density of nonprofits in local communities. The authors find substantial county-level variations in the densities of nonprofits overall and of charitable, advocacy, and mutual-benefit nonprofits. Using multiple regression tech-niques, they are able to explain 20 % to 46 % of overall variation (depending on legal cate-gory involved) in nonprofit densities. Their findings support the supply and social struc-ture, but not demand, explanations and reveal somewhat divergent patterns for the various types of nonprofits. The authors note several important caveats to the findings. THE NONPROFIT SECTOR AND COMMUNITY DIMENSIONS As most observers of the nonprofit sector recognize, the sector is deeply embedded in the society in which it is located—reflecting the nature and intensity of social problems, the opportunities for citizen participation afforded by decision-making structures, the interests and resources of resi-dents, and the configuration of other key community institutions, such a