This thesis examines why non-profit theatres in Britain have become increasingly involved in educational work since the 1990s, from an historical and institutional perspective. With an assumption that this sector-wide organisational change has been caused by a shift in institutional environments of the arts sector, the thesis proposes an institutional framework, where three different institutional logics - artworld, market and policy - coexist and tend to dominate the institutional context at different times. Using this theoretical framework, the thesis demonstrates that arts policy and management during the post-war period were shaped by the artworld logic. However, the two decades since 1979 have seen the environments become complicated because the institutional logics of the market and policy gained currency. Criticising the limitation of marketisation theory that has so far dominated most analyses of recent cultural policy, the thesis sheds light on the fact that active intervention by the state has replaced the arm’s length principle and the arts - especially arts education and participatory arts activities - are increasingly used for explicit social policy objectives. This phenomenon is defined as ‘politicisation’ of the arts. The rapid growth of educational work since the 1990s is conceptualised as an organisational adaptation of theatres to such environments. The case study of four English theatres demonstrates that although the theatres have expanded education under unprecedented political pressure, they also try to implicitly resist external intervention and to maximise autonomy. This implies that politicisation is a complicated process of institutional change: whilst new rules, norms and expectations have been developed under the policy logic, the sector’s romantic view of the arts has been reformulated and old ways of working have persisted. Thus, the recent institutional change in the non-profit arts sector is better understood as an integration of different institutional logics, not as colonisation of the arts world by the market or politics. In these dynamics environments, the non-profit theatre can reinvent itself as a creative educator and social impact generator without fundamental transformation in its artistic and management sides.