This study examines the impact of budget stabilization funds (BSFs) on state general obligation (GO) bond credit ratings. While a number of past empirical papers have examined the effect of various fiscal institutions on state GO bond ratings; to date, BSFs have been largely ignored in the literature. Model estimates show that neither the choice to have a statutory BSF versus a constitutional BSF or the size of a BSF has any apparent impact on credit ratings. However, weak deposit rules are associated with lower credit ratings while weak withdrawal rules are associated with higher credit ratings.

Although operating reserves can aid nonprofit organizations in alleviating periods of fiscal stress, they are not widely used. This study examines organizational factors that impact the level of operating reserves in nonprofit organizations. It also explores the relationship of operating reserves with organizational demographics and financial health variables using a six-year (1998-2003) unbalanced panel regression model containing 460,437 observations. Findings demonstrate a positive relationship between operating reserves and administration ratio, profit margin, operating margin, and organization age. Conversely, the size of operating reserves is negatively related to leverage ratio, donations, and organization size. Revenue diversification, however, shows a mixed relationship with operating reserves among different types of nonprofit indicating complexity in risk-reducing strategy. This study contributes to understanding factors relevant to the presence, or absence, of nonprofit operating reserves.

This study examines the impact of federal funding levels on the program spending of faith-based and community organizations in Kentucky. Prior research indicates that organizations could increase spending on overall program expenses or decrease program spending relative to administrative costs as a result of greater reporting demands from federal funders. Three models of program spending are proposed: increased program spending relative to administrative costs (program enhancement effect), decreased program spending relative to administrative costs (administrative enhancement effect), and no net effect (neutral program-spending effect). The analysis supports the program enhancement effect and estimates that federal funding has a positive relationship with increased program spending relative to other expenses in faith-based and community organizations.Relationships between government and nonprofit organizations come in a variety of arrangements, and one of the most formalized involves funding from federal grants and contracts. In 2007, government grants and fees for contracted services provided 29.8 percent of overall public charity revenue and 48.6 percent of revenue for human service organizations (Wing, Roeger, and Pollak 2010). While governments seek to bring about societal changes in keeping with their political agendas (Hall 2010), as a substantial source of revenue for some organizations, federal funds can alter an individual organization's spending behavior. Nonprofit organizations within the United States have important implications for delivery of public services, and many eminent nonprofit scholars have labeled the increasing delivery of public

Despite the enormous size of the nonprofit sector, there has been very little empirical research done on the capital structure of nonprofit organizations, and no one has examined the potential effects of borrowing on individual contributions. Using a representative sample of nonprofits, the empirical analysis first determines whether secured or unsecured borrowing by nonprofits influence future contributions. The results for the full sample support a “crowding-out” effect. When the analysis is repeated on a subsample of nonprofits that are older, larger, and more dependent upon donations, the results are more ambiguous: secured debt has little or no effect, while unsecured debt has a “crowd-in” effect. The empirical analysis is then expanded to test whether nonprofits with higher than average debt levels have different results than nonprofits with below average debt levels. The results suggest that donors do remove future donations when a nonprofit is more highly leveraged compared to similar organizations.