Charitable Insolvency and Corporate Governance in Bankruptcy Reorganization

Weisbord, Reid K.

doi:10.2139/ssrn.2188940

Cited by 3 publications

(2 citation statements)

References 5 publications

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“…Financial mismanagement remains a major challenge in non-profit organisations, particularly, fraud (Gibelman & Gelman, 2001;2004) in the form of theft of assets (mostly cash) (Othman et al, 2012) and misappropriation of donated funds (Tremblay-Boire & Prakash, 2017). The consequences of these mismanagement challenges have resulted in tightened regulation, damaged reputation (Uygur, 2020) and failure of such organisations (Weisbord, 2013).…”

Section: Cash Waqf Management Challengesmentioning

confidence: 99%

Beyond Management Challenges: A Demise of a Cash Waqf Foundation

Mohammed Kabiru Musah,

Muntaka Alhaj,

Hasan

et al. 2023

JISF

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This study investigates how management challenges have caused the demise of the Ahlussunnah Wal-Jamaah Waqf Foundation (ASWAJWF) in Ghana using human resource theory and the behavioral theory of leadership. Interviews were conducted with 24 participants who were directly involved in the collection of cash waqf and the management of ASWAJWF in ten of the 16 regions of Ghana. The findings attributed ASWAJWF’s demise to leaders’ misunderstanding of waqf as a typical sadaqah, lack of investment initiatives to sustain the fund due to managerial incompetence, and failure to consult and heed voluntary expert advice. This is the first study to examine Ghana's waqf management challenges. It is also the first waqf study to use theories of demise to explain how management challenges caused a waqf institution to ‘die’. Its exploratory nature ignites and invites other researchers to examine the reasons for the demise/closure of cash waqf institutions, thus serving as a reference for researchers. Finally, we expect this study to draw the attention of cash waqf stakeholders, including policymakers, to the need to provide effective management and governance frameworks/tools to revive cash waqf and to safeguard the interests of donors, beneficiaries, and the public at large.

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Section: Cash Waqf Management Challengesmentioning

confidence: 99%

Beyond Management Challenges: A Demise of a Cash Waqf Foundation

Mohammed Kabiru Musah,

Muntaka Alhaj,

Hasan

et al. 2023

JISF

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“…On the contrary, the primary cost of debt is the potential financial distress it might entail because debt service must be maintained even if NPOs’ revenues are critically low (Bowman, 2002). However, NPOs have no owners who may be affected by their bankruptcy and, furthermore, the endowment of NPOs “is effectively protected from takeover bids” (Bowman, 2002: 296) as bankruptcy laws protect it from misuse by nonprofit fiduciaries and even from the collection by creditors (Weisbord, 2013). The bankruptcy costs faced by NPOs will not, therefore, be as high as those of for-profit companies.…”

Section: Background and Literature Reviewmentioning

confidence: 99%

Capital Structure and Debt Maturity in Nonprofit Organizations

García-Rodríguez

Romero‐Merino

Mariscal

2021

Nonprofit and Voluntary Sector Quarterly

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This article examines the capital structure and debt maturity in nonprofit organizations (NPOs). In particular, we analyze whether these financing decisions are made as expected according to the two main theories used to explain the capital structure, that is, the trade-off and pecking order theories. To do so, we study the associations between NPOs’ indebtedness and their size, age, tangibility, liquidity, profitability, risk, and growth. We use fixed effects, probit, and Heckman selection models with unbalanced panel data containing 8,721 charities in the United Kingdom for the period 2011–2018 (60,222 year-obs). Our results show that the financing patterns of NPOs are consistent with the arguments of the pecking order theory. We also find that less than half of our sample uses long-term debt. Moreover, debt maturity is longer in larger NPOs, those with more tangible assets, or those with higher liquidity.

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