In responding to the public management agendas of government, nonprofit organizations (NPOs) have had to commercialize, casting questions over their investment in human and social concerns. This paper analyses the utility of intellectual capital (IC) in addressing NPOs’ conflicts between commercial and social objectives. On the basis of data from in-depth interviews with 35 senior nonprofit managers across 22 large Australian social service nonprofit organizations (SSNPOs), the analysis confirms that IC assists SSNPOs in managing the social-commercial divide, but that managers’ understandings of the IC concept are often different to those contained in the IC literature. This highlights the theory-practice divide. The paper contributes to debates on NPO strategy, first by arguing that IC can be utilized as a nonprofit strategic management conceptual framework and second by highlighting slippages in the meaning and significance of IC. The analysis also prescribes ways the IC concept may be utilized more effectively, not only in Australian SSNPO practice but also in other developed countries with similar environments.
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