On the Association of Operating Efficiency and Financial Stability in Charitable Organizations

• In Event: Input/Output quality in academia and Non profits
  In Dialogue Session: Input/Output Quality in Academia and Nonprofits

Abstract

Donors to Not-for-profits (NFPs) may choose to restrict the use of their donations to purposes they define. From the donor’s perspective, there are costs and benefits to placing restrictions on donations. In this paper, our primary research question focuses on whether growth in restricted assets is associated with the financial stability of NFPs. Our results suggest that as operational efficiency decreases and financial instability increases, donors mitigate these risks by restricting the use of their donations to purposes they define.

Authors

• Elizabeth Hendrix Turner, University of Southern Mississippi-Gulf Coast

• Clark M Wheatley, Florida International University

• Gregory P McPhee, Florida International University

• Krishnamurthy Surysekar, Florida International University