Community-Oriented Market Design for Nonprofit Resource Exchange

Nonprofit organizations (NPOs) face persistent challenges in securing the resources they need in pursuit of their missions. Yet, despite planning the use of physical assets, talent, skills, and other resources in advance, NPOs often experience fluctuating needs, creating opportunities for resource exchange. We introduce Sharing With a Purpose (SWAP), a novel market that enables NPOs to obtain resources from other NPOs by offering their own. SWAP consists of three key components: (1) market formation to create NPO resource-exchange cohorts, (2) auction-based multilateral exchange with virtual currency using integer optimization to maximize collective surplus, and (3) a codesigned and iteratively refined process that builds participation, trust, and community. Simulated experiments demonstrate optimized market outcomes, computational efficiency of the optimization models, and the benefits and effectiveness of virtual currency redistribution policies. Real-world deployment with NPO cohorts based in Maryland, United States, has succeeded in facilitating numerous, wide-ranging resource exchanges, revealing that SWAP can provide NPOs with opportunities to generate greater value from existing resources. Nonprofit directors report strengthened collaboration, new thought partnerships, and enhanced community ties. These results reveal SWAP’s potential to strengthen community impact in the nonprofit sector.

Funding: This research was supported by the National Science Foundation [Grants FW-HTF 2222713, FW-HTF 2222697, and CIVIC-PG 2431414]. A. Teytelboym was supported by the European Research Council under the European Union’s Horizon 2020 Research and Innovation Programme [Grant 949699].

Supplemental Material: All supplemental materials, including the code, data, and files required to reproduce the results, are available at https://doi.org/10.1287/opre.2024.1415.