Concern over the funding of nonprofit organizations has raised issues concerning the amount of money available for the provision of services and the potential that changes in the nature of funding will compromise organizational goals. Because of increased competition and government cutbacks, nonprofits will be forced to place more reliance on commercial ventures. This has the potential to negatively affect the behavior of recipient organizations. The question addressed in this article is whether greater reliance on private funding and commercial ventures will ultimately cause nonprofit arts organizations to place less emphasis on program services and more emphasis on fundraising and management expenses. The analysis is focused on three categories of nonprofit arts organizations: museums, performing arts, and media and communications. Overall, the provision of program services appears to be the primary goal of organizations in these three sectors, and greater reliance on private funding does not divert funding from program service delivery.
Hughes for comments and suggestions. The anonymous referees also made numerous important suggestions and comments. All errors remain mine.In this article, the author tests whether there is a simultaneous relationship between the number of nonprofits and government funding of nonprofit activity and whether the fundraising efforts of nonprofits are the means by which nonprofits affect the grants available to them. Estimates of the model are consistent with the proposition that government grants and contracts (program revenues) received by nonprofits are strong determinants of the number of nonprofits in a state. They lend support to the argument that nonprofit fundraising activities have an independent effect on the availability of the grants and contracts; however, although the number of nonprofit organizations per state has a similar effect on grants to nonprofits, they do not have an effect on the contacts they receive.
When diners decide how much to tip, is the decision based on social convention or on conscientious appraisal of server productivity? Previous researchers in economics and social psychology are generally inconclusive on this question. A common finding in the literature is that tip size and service quality are unrelated, a result usually obtained from OLS regressions. OLS is only appropriate if service quality is exogenous. It is argued that service quality is very likely endogenous in any regression of tip size; good quality encourages good tips, but server expectations of good tips encourage good quality. This simultaneity is accounted for by jointly estimating percentage tips and customer rankings of service quality on a sample of 247 diners in a Central Minnesota restaurant. Included are explanatory variables consistent with both the social psychology and economic views of tipping. In contrast to previous studies, it is found that service quality significantly affects tip size and when servers expect higher tips, customers rank service quality higher. Also it is found that patronage frequency and coupon redemption have no effect on percentage tips, but server gender influences quality significantly. It is concluded that the results are generally supportive of an economic hypothesis of tipping.
Charitable giving in the United States provides a major source of funding for nonprofit organizations, but it is also a highly variable source of funding. A possible explanation for the substantial variability in giving lies in the measurement of income. In addition to permanent and transitory income, this article introduces the variability of income as a factor affecting charitable donations. The variability of income increases with the level of household income and varies by the source of income. In distinguishing types of income the authors are also able to shed some light on decision making by married couples. The effect of changes in permanent household income on charitable giving is significantly larger than that of transitory household income. Greater variability in the flow of annual household income has a negative effect on total giving. In addition, the authors find some significant differences in the impact on giving between the husband's and wife's earnings.
The decline and possible elimination of federal support of the arts in the United States is likely to have a major impact on museum finances. Using data from the 1989 Survey of Museums, we analyze the interactions among major categories of museum funding. The results indicate a strong, positive stimulus of federal funding on private contributions, with some possible displacement of state and local government contributions. The opportunity to generate funds from private sources shows some promise to offset the loss of funds from government sources.
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