When governmental and nonprofit organizations are good, they are very good. And good they must be, because we entrust them with society’s most important functions—educating our minds, uplifting our souls, and protecting our health and safety. Our collective perception of their value is evident in the monumental resources we devote to these institutions: Revenues of nonprofits alone have grown from less than $200 billion in 1978 to $1.1 trillion in 1993.
A version of this article appeared in the March–April 1996 issue of Harvard Business Review.