Abstract

Institutional theory emphasizes the importance for organizations to conform to established rules, norms and regulations in order to remain legitimate and survive within their institutional environment. Legitimacy is understood as a “generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs and definitions (Suchman, 1995, p.574).” The literature agrees on three general types of legitimacy: regulatory, cognitive, and normative legitimacy (Zimmerman & Zeitz, 2002). We investigate whether the reliance on commercial income threatens the normative legitimacy of NPOs. Because legitimacy is usually judged by actors external to the organization, we propose that normative legitimacy can be assessed by the ability of NPOs to attract volunteers. Specifically, we hypothesize that commercial activities that are clearly related to NPOs’ social missions are positively related to normative legitimacy. That is, these kind of commercial activities relate to a higher incidence of volunteer labor. On the other hand, we hypothesize that commercial activities that are unrelated to NPOs’ social missions exhibit a negative relationship with normative legitimacy. Finally, we hypothesize that unrelated commercial activities negatively moderate the positive relationship between related commercial activities and normative legitimacy.

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