In this study, we test the impact of nonprofit financial health and financial efficiency ratios on the grant amount awarded by foundations using theIn the context of this competitive environment, nonprofit managers and fundraisers may seek to develop a competitive edge by highlighting their financial ratios given the increased attention to these measures by industry watchdog groups. A significant body of research predicting the effect of nonprofit financial ratios on donation behavior offers mixed conclusions about whether these ratios Note: We extend our gratitude to the Wilbur and Hilda Glenn Family Foundation in Atlanta, Georgia, for initial research funding and to the reviewers for helpful comments.

Government has come to rely on nonprofit organizations to deliver publicly funded human and cultural services, and it has become a significant donor to the nonprofit sector. When government agencies make grants to nonprofit organizations, administrative cost ratios are often requested, but it is not clear whether or how these ratios influence allocation decisions. Theoretical perspectives alternatively frame the administrative cost ratio as an indicator of price, with negative effects on allocations, or as an indicator of quality, with positive effects on allocations. The authors test these hypotheses using original state‐level grants data from the state of Georgia. The results offer inconclusive evidence about whether the price or quality hypothesis explains government's use of administrative cost ratios in decisions regarding the amount of grant allocations. What drives government grant‐making decisions remains an open and more complex question that involves a range of other variables that are independent of price and quality. The authors address this question in terms of policy and management implications and a future research agenda.

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Whether looking at the spread and adoption of an intervention across a community, across multiple units, or within a single unit, an understanding of diffusion theory can help evaluators uncover patterns and impacts that might otherwise be overlooked. The theory alerts evaluators to examine why uptake of an intervention appeared different in different sites, according to the characteristics of the people involved, the social systems involved (for example, neighborhoods, states, or organizations), or the communications channels used. Insights might explain intervention intensity across sites and consequent differential effects. It also yields useful information to assist with subsequent replication of the intervention by practitioners and policymakers.

The primary question in this study is whether the inequality observed in rural and urban giving patterns is equitable. Practitioners and policy makers have expressed concern about equity in foundation giving, but these concerns are often conflated with equality measures. The focus of this article is to disentangle equity and equality and then propose-in the absence of equity standards in philanthropic literature-three equity standards that can be used by scholars, practitioners, and policy makers to assess the spatial distributional equity of philanthropic grant making. In an illustrative application of the equity standards to grants made in 2005 by foundations in the state of Georgia, it is determined that rural communities receive an equitable share of philanthropic grants and grant dollars in the state.