Risk and diversification of nonprofit revenue portfolios: Applying modern portfolio theory to nonprofit revenue management

Qu, Heng

doi:10.1002/nml.21385

Cited by 26 publications

(27 citation statements)

References 34 publications

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“…However, using HHI to measure nonprofit revenue might be problematic. Recent studies pointed out that revenue diversification benefits are more likely to be achieved through optimizing revenue source mix according to a nonprofit’s specific situation, instead of simply adding a revenue stream (Hung & Hager, 2019; Qu, 2019). This study also did not have significant findings on the role of equity in preventing nonprofit financial distress in disaster contexts.…”

Section: Discussionmentioning

confidence: 99%

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Are Disasters Disastrous to Nonprofit Organizations? Investigating the Financial Implications of Hurricane Sandy for Nonprofits

Chen

2021

Nonprofit and Voluntary Sector Quarterly

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Nonprofit organizations are sensitive to external disasters due to their high reliance on external funds and volunteers. In this study, I investigate how disasters affect the financial health of nonprofits and what factors make them more vulnerable within the context of disaster. The sample in this study includes nonprofits directly and indirectly affected by Hurricane Sandy. Using a logistic regression model, I explore if the disaster contributed to the likelihood of a nonprofit experiencing financial distress. Disaster, as an external shock, increases risks of nonprofits experiencing financial distress, especially for smaller nonprofits and nonprofits not relying on commercial revenue.

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Section: Discussionmentioning

confidence: 99%

“…Revenue diversification has complex impacts on nonprofit financial health (Hung & Hager, 2019; Qu, 2019). Some studies argued that nonprofits with diverse revenue sources have flexible financing.…”

Section: Assessing Financial Health In Disaster Contextsmentioning

confidence: 99%

Are Disasters Disastrous to Nonprofit Organizations? Investigating the Financial Implications of Hurricane Sandy for Nonprofits

Chen

2021

Nonprofit and Voluntary Sector Quarterly

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“…Others claim that revenue concentration increases nonprofit efficiency by decreasing administrative costs and fundraising expenses (Frumkin & Keating, 2011 ; Wicker & Breuer, 2013 ). More recent studies find that selecting nonprofit revenue portfolios is more complex than simply adding different types of revenue sources, and revenue portfolios should be chosen based on the specific conditions of the organizations, such as the nature of their services (Hung & Hager, 2019 ; Prentice, 2016b ; Qu, 2019 ; Young, 2007 ).…”

Section: Discussionmentioning

confidence: 99%

Nonprofit Financial Resilience: Recovery from Natural Disasters

Chen

2021

Voluntas

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Nonprofits operate in increasingly complex and turbulent environments. However, few studies have explored nonprofits’ resilience during natural disasters. This study uses Hurricane Katrina as a case study to explore whether nonprofits can regain their original financial performance after significant natural disasters and what organizational capacities and abilities influence their ability to bounce back. The results show that recovery is slow, taking between three and five years for half of the nonprofits in the sample. Recovery depends on factors such as organizational size, equity, surplus, and commercial revenue. This study enriches the nonprofit financial health literature and reveals that the factors associated with financial resilience are different from those that predict financial vulnerability.

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“…The theory emphasizes on the need to identify an investment strategy that offers high returns and relatively low risks. The strategy was based on two concepts namely; the goal of every investor is to maximize returns for every level of risk and risk can be reduced by diversifying a portfolio through individual, unrelated securities (Qu, 2019). The theory assumes that investors are riskaverse and prefer a portfolio with less risk for a given level of return.…”

Section: Modern Portfolio Theorymentioning

confidence: 99%

Influence of Macroeconomic Factors on the Growth of the Insurance Industry

Kajwang¹

2022

IJECON

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Purpose: The purpose of this study was to examine the influence of macroeconomic factors on the growth of insurance industry in Kenya. Materials and Methods: The main research approach used in this study relied on review of previous studies related to the study topic. This involves the use of secondary data obtained from institution records, government publications, historical and statistical records etc. This type of data is frequently chosen since it can be conveniently accessed and reduces the need for field research. Therefore, this study will rely heavily on already published studies, journals and annual records of insurance companies in Kenya to obtain secondary data that will be used to draw the results, conclusion and recommendations of the study. Findings: The findings from the empirical studies were found to have conceptual, contextual and geographical gaps. This is because most of these studies discussed on either internal factors or both internal and macroeconomic factors influencing the performance or profitability of insurance companies. The findings of these studies were also limited to a few measures of growth of insurance firms. In addition, most of the empirical studies were not carried out in Kenya. Hence, the findings of these studies may differ due to the different governing systems used by different countries that also affect the operations of insurance companies. Unique contribution to theory, practice and policy: This study will be of great benefit to the different stakeholders in the insurance sector in Kenya. The management of the insurance companies will gain a broad understanding of the numerous macroeconomic factors and how they impact the performance and profitability of insurance firms. The policymakers in the insurance industry will also benefit from the suggestions and recommendations given on measures and policies that can be used to reduce the adverse effects of macroeconomic factors on the growth of the insurance industry. The findings of the study can also be used as a reference point to identify the macroeconomic factors that have a positive influence and those with a negative influence on the development of the insurance industry. Further, this study will also be relevant to the different researchers and academicians since the study's findings will be incorporated into their body of literature and act as a basis for their empirical studies. On the other hand, the scholars may also be motivated to carry out additional research in order to improve on the theories used in this study and fill any identified research gaps.

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Risk and diversification of nonprofit revenue portfolios: Applying modern portfolio theory to nonprofit revenue management

Cited by 26 publications

References 34 publications

Are Disasters Disastrous to Nonprofit Organizations? Investigating the Financial Implications of Hurricane Sandy for Nonprofits

Are Disasters Disastrous to Nonprofit Organizations? Investigating the Financial Implications of Hurricane Sandy for Nonprofits

Nonprofit Financial Resilience: Recovery from Natural Disasters

Influence of Macroeconomic Factors on the Growth of the Insurance Industry

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