Reframing our understanding of nonprofit regulation through the use of the institutional analysis and development framework

Regulation of the nonprofit sector is a subject of significant debate in the
academic and professional literature. The debate raises questions about how to regulate the sector in a manner that addresses accountability while preserving the sector’s unique role in society. Central to the debate is the role of self-regulation.
The nonprofit sector is recognized and defended as a distinct third sector in
society. Cultural norms and values differentiate the purpose of the sector from the
governmental and commercial realms. The legal regime secures rights, establishes
organizational structures, and provides tax benefits that enable, reinforce, and protect
participation in nonprofit activities. Nevertheless, government regulation is thought to be
antithetical to sector autonomy, as well as an obstacle to flexibility and innovation. Selfregulation protects the sector’s political independence and its distinctiveness through the cultivation of shared norms, standards, and processes for ethical practices. Although self regulation is considered to be consistent with the autonomous nature of the sector, it is also criticized as a weaker form of regulation. The ability to address regulatory issues expressed in the broader debate is limited by how we frame nonprofit regulation. The problem with advancing our understanding of self-regulation has to do with how we conceptualize nonprofit regulation. Government and self-regulation are conceptualized and studied as distinct options for regulating the sector. Missing in the nonprofit scholarship is a theoretical framework capable of reframing nonprofit regulation as a system of governance that depends on self-regulation. This represents a glaring gap in the research. Neglecting the institutional context that explains the structure and functioning of the nonprofit sector has led to an oversimplification of nonprofit governance. To study the effects of self-regulation on the functioning of the sector, I argue that we must first frame what is relevant about how the nonprofit sector is governed. The Institutional Analysis and Development (IAD) Framework outlines a systematic approach for analyzing institutions that govern collective endeavors. The objective of this dissertation is to introduce the IAD as an approach for examining self-regulation not as an alternative to government regulation but as an important part of nonprofit governance.