The Dual Nature of Nonprofit Organizations: Between Autonomy and Regulatory Control

Abstract

The article examines the institutional aspects that influence the functioning of the Russian nonprofit sector, focusing on the impact of state policies and market mechanisms on its operations. It discusses the dual nature of nonprofit organizations (NPOs), combining autonomy with dependence on the state, which poses unique challenges and problems for the sector. Particular attention is paid to the phenomenon of pseudo-­markets, which arise when NPOs engage in economic activities under constrained legal and institutional conditions. These relationships, which formally mimic market mechanisms, distort the economic nature of the sector, reduce the efficiency of NPOs, and undermine entrepreneurial activity in the business environment. The author highlights that the main risks of commercialization and state overregulation faced by Russian NPOs are closely linked to inconsistencies in the regulatory framework, including contradictions in the definition of their status and types of activities. The article analyzes state regulation and mechanisms for supporting socially oriented NPOs (SONPOs), including the granting of special statuses such as ‘provider of socially useful services.’ It examines the specific features of these mechanisms, including difficulties in accessing subsidies and evaluating service quality, which limit the potential of NPOs to fulfil their social mission. The article also identifies a trend towards an increasing number of state-­established NPOs, leading to increased regulatory pressure and reduced autonomy in the sector. The features of the institutional environment identified show that, despite the growing volume of state support, significant barriers to sustainable development remain. In particular, issues such as inadequate quality control mechanisms, unequal access to resources, and a lack of transparency in procedures are highlighted. The author concludes that further research on the non-profit sector is essential to address regulatory and institutional contradictions. The development of more balanced rules and constraints to support the autonomy and efficiency of NPOs is a critical condition for enhancing their role in addressing social challenges.