To what extent are contemporary scholars using the ten explanations of the nonprofit sector described in Chapter 2? The authors use scholarship, or published academic articles, as data to answer this question. They find that the ten nonprofit-sector theories continue to be an important foundation for nonprofit studies research. The most commonly used sector theories are associationalism, contract failure, nonprofit/government interdependence, and social origins. However, their analysis suggests that use of the nonprofit-sector theories is merely ceremonial. Nonprofit scholars could do much more to question, develop, and refine the existing sector theories – or to develop new ones. This research highlights the importance of a book like this one to encourage scholars to discuss and question existing sector theories and pose new sector-theory contributions to better understand the nonprofit sector.

This chapter explores the nature of nonprofit-sector theory. To do this, we first examine what we theory, and what we mean by nonprofit-sector theory. We also propose a framework for evaluating what makes good nonprofit-sector theory, based on the function of theory (define, describe, explain, prescribe, predict, and evaluate) and the theory's depth, breadth, and relevance. For this volume, we have taken a broad and inclusive approach to nonprofit-sector theory, defining it as answering the questions, “What is the nonprofit sector?” and “Why does the nonprofit sector exist?”