PART III

The Non-Profit Sector

Most people do not hear “management”; they hear “business management.” Management as a function, as an organ of authority and responsibility, and as a discipline was indeed first seen, identified, and studied as a part of business enterprise. But this is hardly more than a historical—and primarily American—accident. Management is the specific organ of any modern institution. The people in management may be called by different names—schools and hospitals, for instance, prefer to speak of administrators. But what all of them do is to manage. What all of them practice is management.

And the non-business institutions, and especially those of the Third Sector—that is non-businesses which are not governments, whether privately or publicly owned—have been the true growth area of a modern society. Indeed, about half of the students who receive an MBA from American graduate business schools do not go to work for businesses but for the Third Sector.

But the Third Sector organizations—schools; hospitals; community organizations, whether the Ford Foundation or the Boy Scouts, the Red Cross, or the art museum; labor unions and churches; accounting firms and the large law firms; and countless associations of all kinds—professional and industrial, learned, and recreational—have also changed out of all recognition. The hospital, only a short hundred years ago, was still the place for the poor to die.

In the years ahead, Third Sector institutions are certain to face more rather than less challenge. Many of the needs of the Third Sector institution are the same as those of the business enterprise: Both need accounting, both employ people, both need marketing. But there are also specific Third Sector needs and specific Third Sector performances. They are the concern of the pieces in this section.