Social Purpose Formation and Evolution in Nonprofit Organizations

Social purpose lies at the heart of nonprofit organizations, serving as a nexus that motivates support from volunteers, donors, and other stakeholders, driving collective efforts to address social issues and anchoring everyday practices in moral imperatives that transcend organizational boundaries. Whereas a compelling social purpose is seen as vital for the survival and growth of nonprofits, we know surprisingly little about how purpose develops in these organizations. Drawing on a triadic framework that conceptualizes social purpose as narratives, shared understandings, and enactment in practice, we investigate how purpose forms and evolves within a nonprofit organization. Our findings elaborate how discrepancies can emerge between founders’ abstract, future-oriented visions and members’ practices related to the organization’s beneficiaries. These discrepancies may lead to conflicting or fragmented understandings of purpose, but they can also be generative, driving its evolution toward a resonant and achievable social impact. Whereas leaders are commonly seen as guarding organizational purpose from drift, our study shows how members in nonprofits protect purpose from irrelevance and inefficacy. Funding: This work was supported by the Research Council of Finland. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.17213 .