Financial capacity and sustainability of ordinary nonprofits

Bowman, Woods

doi:10.1002/nml.20039

Cited by 169 publications

(270 citation statements)

References 20 publications

(15 reference statements)

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“…The open system perspective appears to have the most critical implications. It suggests not only that nonprofit organizations must effectively reach their external stakeholders but also that they may fail to manage their resource dependencies [5][6][7][8]18].…”

Section: Implications For Nonprofit Sustainabilitymentioning

confidence: 99%

“…It is primarily the economic sustainability of individual nonprofit organizations that today's nonprofit scholars have in mind when referring to "nonprofit sustainability" (cf. [8,9]). Among these scholars, a consensus seems to be emerging to the effect that the economic sustainability challenge is shaping both strategies and structures of nonprofit organizations.…”

Section: Introductionmentioning

confidence: 99%

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Sustainability of Rural Nonprofit Organizations: Czech Republic and Beyond

Valentinov

Vaceková

2015

Sustainability

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Sustainability of nonprofit organizations is a key concern for today's nonprofit scholars and practitioners. Building upon the nonprofit economics literature, the present paper introduces the distinction between the demand-side and supply-side determinants of nonprofit sustainability and makes the case for the discrepancy between them. This discrepancy presents not only a generic conceptual explanation of the nonprofit sustainability problems but is also applicable to the context of the European rural nonprofit sector. Three arguments are advanced. First, the notorious implementation problems of LEADER partnerships can be explained as a manifestation of the above discrepancy. Second, and related, the rural context implies the tendency of the supply-side determinants of nonprofit sustainability to undermine the demand-side ones. Third, recent empirical findings from the Czech Republic show that this tendency does not necessarily imply the possibility of a clear classification of the demand-side and supply-side sustainability determinants. Rather, those features of rural areas and communities that significantly affect the size of the local nonprofit sector exhibit a controversial entanglement of demand-side and supply-side identities.

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Section: Implications For Nonprofit Sustainabilitymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Sustainability of Rural Nonprofit Organizations: Czech Republic and Beyond

Valentinov

Vaceková

2015

Sustainability

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“…This concern can be seen as a more complicated Williamson tradeoff: market power will be more likely to be tolerated for cost efficiencies, but any gain in producer surplus will be frowned upon. Though this attitude toward the retention of earnings by nonprofits is hopefully changing in the interest of financial soundness (Bowman 2011;Calabrese 2011), it is currently a valid concern for both donor and policy audiences. Here, there are concerns that these strong entry barriers were being set up around institutions that were seeking monopoly rents.…”

Section: Potential Harmsmentioning

confidence: 99%

“…This is flawed on two levels. First, a nonprofit should (and often does) seek to gather a slight surplus in net assets in order to ensure financial health (Bowman 2011;Calabrese 2012). Second, even if the nonprofit was unwilling or unable to retain earnings, the general relationship that larger numbers of firms in a sector cause more competition for resources is relatively universal.…”

Section: Number Of Competitorsmentioning

confidence: 99%

Charitable (Anti)Trust: The Role of Antitrust Regulation in the Nonprofit Sector

Searing¹

2014

Nonprofit Policy Forum

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The purpose of this study is to address the ambiguities in the application of anti-trust regulations to the nonprofit sector. We first survey policy tools and their diverse historical usage in nonprofit and mixed markets, specifically in professional associations, hospitals, and education. This analysis informs the development of a typology of anti-competitive nonprofit markets which is used to classify the three historical examples into eight traits. Finally, this typology is applied to three new markets -animal shelters, thrift stores, and soup kitchens -which have less in common with purely for-profit markets and have little or no discussion in antitrust literature. We find that the nonprofit form per se does not indicate an absence of anticompetitive practices or antitrust concerns; however, certain combinations of attributes -such as purely donative revenues and an absence of pricing ability -make the threat of anticompetitive practice less oppressive.

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“…However it has been noted that some organisations survive and grow despite high debt yet other organisations that seemingly have more advantages failed to achieve financial sustainability (Bowman, 2011). …”

Section: Timeframe Considerationsmentioning

confidence: 99%

Defining a Financially Sustainable Independent School in Australia

Somerset¹

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In 2015 there were 1091 independent schools in Australia servicing 587,000 students and their families. Forty four percent of their $9.5 billion recurrent income was provided by government grants, with the remaining fifty six percent provided by parents and other private sources. Capital investment in new buildings and equipment was funded fourteen percent from government grants and eighty six percent from private funds (ISCA, 2016) include debt which is estimated to be $4 billion for the sector (ASBA/Somerset, 2016).School closures have an adverse effect on social good and undermine consumer confidence in the independent schools' sector. The consequences include disruption to the students' education and loss of public confidence in the sector. Governments (State and Federal) are very sensitive to these failures as they are often a catalyst to expressions of concern about the accountability for government funds expended on the schools, the ongoing funding of non-government schools and paradoxically the pressure put on government schools to absorb both children from schools that fail and children whose parents have lost confidence in the independent system. The qualitative research methodology adopted for this study included the identification of the major stakeholders who are concerned with the financial sustainability of independent schools in Australia and the carrying out face to face semi structured interviews with a sample of 17 stakeholder representatives. The sample frame included representatives from banks, federal and state government, school owners, managers and governors and a parent association.iii There were six major findings from this research. First, there was common agreement between the interviewees as to which financial stakeholders were concerned with the financial sustainability of an independent school. Second, it supported the existing research that stakeholders are as interested in the non-financial attributes as they are in the financial attributes of independent schools when making an assessment of the school's financial sustainability. Third, the stakeholders confirmed the importance Financial attributes and in particular of a strong operating surplus (profit) in order to fund facility reinvestment, debt servicing and also replenish cash reserves. Fourth, Leadership and management are important attributes of financial sustainability. Fifth, stakeholders definition of a financially sustainable independent school identified a mixture of non-financial and financial factors. Sixth, although there was a significant level of agreement among the stakeholders concerning the attributes of a financially sustainable independent school, there were some differences between stakeholders as to the relative importance placed on some factors.

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Financial capacity and sustainability of ordinary nonprofits

Cited by 169 publications

References 20 publications

Sustainability of Rural Nonprofit Organizations: Czech Republic and Beyond

Sustainability of Rural Nonprofit Organizations: Czech Republic and Beyond

Charitable (Anti)Trust: The Role of Antitrust Regulation in the Nonprofit Sector

Defining a Financially Sustainable Independent School in Australia

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