Revenue Diversification in Nonprofit Organizations: Does it Lead to Financial Stability?

• 成果类型: Article
• 署名作者: Carroll, Deborah A.; Stater, Keely Jones
• 署名单位: University System of Georgia; University of Georgia; University of Connecticut
• 刊物名称: JOURNAL OF PUBLIC ADMINISTRATION RESEARCH AND THEORY
• ISSN/ISSBN: 1053-1858
• DOI: 10.1093/jopart/mun025
• 发表日期: 2009
• 页码: 947-966
• 关键词: donor control; GROWTH

摘要

This article investigates whether revenue diversification leads to greater stability in the revenue structures of nonprofit organizations. Our findings suggest that nonprofits can indeed reduce their revenue volatility through diversification, particularly by equalizing their reliance on earned income, investments, and contributions. This positive effect of diversification on revenue stability implies that a diversified portfolio encourages more stable revenues and consequently could promote greater organizational longevity. Despite any additional complexity or crowding out, nonprofit managers may increase the financial stability of their organizations by adding additional revenue streams. However, our analysis also reveals several other important factors that contribute to nonprofit revenue stability. In particular, increasing a nonprofit organization's total expenses and fund balance reduces volatility, suggesting larger nonprofits and organizations with greater growth potential experience greater revenue stability. Finally, the results suggest nonprofits relying primarily on contributions will experience more volatility, whereas nonprofits located within urban areas will have more stable revenue structures over time.