Abstract
This paper explores whether nonprofits are increasingly adopting mixed revenue strategies, and the sustainability of these strategies over time. We constructed a panel using NCCS data from 1998 and 2007, and divided nonprofits into three groups: Commercial, Donative, and Mixed Revenue. We found no evidence that nonprofits are increasingly adopting mixed revenue strategies. Mixed revenue strategies appeared less sustainable over time than predominately commercial or predominately donative strategies. Our results suggest that for most nonprofits, relying predominately on either commercial or donative revenue (DR) is a more stable equilibrium than attempting to achieve a balanced revenue mix. Exceptions may be those nonprofits, such as arts organizations, where there is a natural alliance between donors and customers.
Notes
Notes: Variation in total revenues across groups is significant at p < .01 using one way anova.
Notes: Variation in total revenues across groups is significant at p < .01 using one way anova.
**Correlation is significant at the 0.01 level (2-tailed).
**Correlation is significant at the 0.01 level (2-tailed).
Notes: Variation is significant at 0.01 using one-way Anova
1. Nonprofits’ income can also be divided by source, that is, government, private individuals, or private firms. The source and type do not neatly map onto each other. For example, government may fund nonprofits through grants (donative revenue) or contracts (commercial revenue). In this paper, we focus on type of income mainly because the dataset we draw upon does not distinguish between sources of income.
2. The small number of organizations with significant revenue from investment income will be analyzed separately as we expect this to have a significant impact on their revenue volatility.