In economic theory the most widely accepted explanations for the existence of non-profit enterprises bear on market “failures”, which are generally related to information asymmetries, i.e. cases in which the independent contracting power of agents does not ensure sufficient transparency or comparability of services and products.
Especially where service quality is difficult to ascertain, there is room for the rise and growth of non-profit enterprises. For the consumer, the ban on distributing profits is a signal that the provider will not raise the price of the service without just cause or reduce its quality.