Glaeser, EdwardShleifer, Andrei2017-06-232001Glaeser, Edward L. and Andrei Shleifer. 2001. Not-for-profit entrepreneurs. Journal of Public Economics 81: 99-115.0047-2727http://nrs.harvard.edu/urn-3:HUL.InstRepos:33078971Entrepreneurs who start new firms may choose not-for-profit status as a means of committing to soft incentives. Such incentives protect donors, volunteers, consumers and employees from ex post expropriation of profits by the entrepreneur. We derive conditions under which completely self-interested entrepreneurs opt for not-for-profit status, despite the fact that this status limits their ability to enjoy the profits of their enterprises. When entrepreneurs have a taste for producing high quality products, the incentives are even stronger, and moreover, non-profit status can serve as a signal of that taste. We also show that even in the absence of tax advantages, unrestricted donations would flow to non-profits rather than for-profit firms because donations have more significant influence of the decisions of the non-profits.en-USJournal Article2017-06-23