A Financial Rating System for Charitable Nonprofit Organizations

Trussel, John M.; Greenlee, Janet S.

doi:10.1016/s0884-0741(04)11005-7

Cited by 72 publications

(133 citation statements)

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“…during an economic crisis). The sustainability measures that are the most frequently found in the literature are an organization's net assets as a proportion of its total income (Trussel & Greenlee 2004), an income concentration indicator calculated as a ratio between donations and subsidies raised by the organization and all its income (Parsons &Trussel 2008), and an indicator similar to the gross margin indicator used by enterprises. Greenlee and Trussel (2000) used financial indicators calculated on the basis of a PBO's financial statements to develop a model predicting its vulnerability.…”

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confidence: 99%

Financial And Non-financial Factors Motivating Individual Donors To Support Public Benefit Organizations

Waniak-Michalak

Zarzycka

2015

CER

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This study is aimed at determining how the financial data of public benefit organizations (PBOs) affects donations received by them and if the donors use financial and non-financial information in order to donate. In order to achieve our aim we used different methods of research: quantitative research (econometric model and survey) and qualitative research (laboratory test). The research allowed us to draw the conclusion that Polish donors make very limited use of PBOs’ financial statements in the donation process and that non-financial information plays greater role for donors in making decisions to give charitable donations. The most important information is the organization's goals and descriptions of its projects. At the same time, many donors stated that they donated under the influence of people they knew. This article fits into the scope of world research on PBOs and uses the concept of civil society.

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confidence: 99%

Financial And Non-financial Factors Motivating Individual Donors To Support Public Benefit Organizations

Waniak-Michalak

Zarzycka

2015

CER

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“…Research has largely concentrated on the use of accounting metrics to attempt to predict relative financial health (Chang & Tuckman, 1991;Chikoto & Neely, 2013;Greenlee & Trussel, 2000;Hager, 2001;Trussel, 2002;Trussel & Greenlee, 2004;Keating et al, 2005;Prentice, 2015 a, b), while extensive research has also been undertaken to identify approaches which, if adopted, might assist NPOs to achieve financial sustainability. 4 Notwithstanding the studies identified above, there has been little research on NPOs' use of techniques to diagnose their level of financial sustainability, identify which tactics are appropriate to their context, and measure and monitor performance on the road to achieving financial sustainability.…”

Section: Introductionmentioning

confidence: 99%

“…See for example studies by Greenlee and Trussel (2000), Keating et al (2005), Tevel et al (2014), Trussel (2002) and Trussel and Greenlee (2004). importance of income diversity and the accumulation of savings, aimed at reducing the probability of financial vulnerability and achieving financial sustainability (Besel et al, 2011;Bingham & Walters, 2013;Bowman, 2008;Gold, 2008;Gregory & Howard, 2009;Hunter, 2006;Leviton et al, 2006;National Audit Office (UK), 2009;Seel, 2006;Struthers, 2004;Weerawardena et al, 2010).…”

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confidence: 99%

“…They note particularly that "greater levels of community-based philanthropy are needed for nonprofits to financially sustain their operation in the long term" (Besel et al, 2011, p. 62). Revenue concentration as noted above is a Tuckman and Chang (1991) variable which has demonstrated predictive power in studies of measures of financial vulnerability (Greenlee & Trussel, 2000;Hager, 2001;Keating et al, 2005;Trussel, 2002;Trussel & Greenlee, 2004). , in a study of the levels of reserves held by NGOs affiliated with ACFID, notes that while no relationship was found between the level of financial reserves held and revenue diversification measured by a Herfindahl index, organisations with relatively low levels of net assets had lower proportions of their revenue from fundraising, suggesting that this source provides entities with the flexibility to save.…”

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confidence: 99%

“…Studies of vulnerability show an inverse relationship between administration deployment ratios (administration expenditure/total revenue) and vulnerability (Greenlee & Trussel, 2000;Hager, 2001;Trussel, 2002;Trussel & 84 Tinkelman and Mankaney (2007) point to extensive conflicting studies including Callen (1994), Frumkin and Kim (2011), Greenlee and Brown (1999), Jacobs and Marudas (2003), Posnett and Sandler (1989), Steinberg (1986), Tinkelman (1999Tinkelman ( , 2004, and Weisbrod and Dominguez (1986). Greenlee, 2004;Tuckman & Chang, 1991;Tevel, 2014). Tuckman and Chang (1991) …”

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An Accountability Framework for the Financial Sustainability of Australian International Development Organisations

Booth¹

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Non-government organisations (NGOs) are non-profit organisations (NPOs) that contribute toward the support and development of people and countries in need. They play an important humanitarian role in the developing world, acting as a conduit for government funding and an expression of donor concern.NGOs need to be financially sustainable in the long term as they face economic uncertainties. Their situation is more difficult than government or business organisations. For example, governments can access tax revenues and business can access the financial markets. Further, governments and business organisations have access to ongoing feedback for gauging and guiding the current and future sustainability of their enterprise through the use of well-developed tools, or the operation of the market itself. The NPO sector lacks the full discipline of business markets and analysts' metric tools for gauging current and future sustainability.Exacerbating these deficiencies are different stakeholder expectations for the stewardship of NGO resources in order to achieve their mission. The public have a perverse view about overhead expenses and there are confounding issues where beneficiaries are not the principal funders.Given the importance of financial sustainability, arguably there should be a level of accountability by officers for its achievement. While there are formal 'solvency' accountability regimes for organisations there are no similar requirements for the longer-term goal of financial sustainability. Extensive research exists proposing operational approaches to increasing organisational sustainability; however, there is no accepted framework which facilitates accountability for financial sustainability over time.This thesis first investigates the understanding of accountability for financial sustainability by officers of three, long-term, high-integrity Australian NGOs. Next the research assesses whether financial metrics can assist in enhancing NPO accountability through diagnosing and monitoring financial sustainability. The research aims are operationalised by using a qualitative participatory methodology. vi The research found that formal demonstrations of accountability for financial sustainability were mixed. 'Felt' responsibility-that is, responsibility informally accepted rather than externally imposed-presented as a strong lever for achieving an NGO's mission, with tensions identified between mission-generated felt responsibility and more traditional formal accountabilities. Officers of participating NGOs expressed personal responsibility for financial sustainability; however, no shared understanding of financial sustainability was observed either within or among the participant NGOs. The focus was commonly on individual strategies or shortterm solvency.While the outcomes of the research varied between participating NGOs, the theorybased framework developed proved successful as a diagnostic tool, with elements adopted, or intended for adoption, as measurement and monitoring tools.

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A lack of response of the financial behaviors of biodiversity conservation nonprofits to changing economic conditions

Larson

Boyer

Armsworth

2014

Ecology and Evolution

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The effectiveness of conservation organizations is determined in part by how they adapt to changing conditions. Over the previous decade, economic conditions in the United States (US) showed marked variation including a period of rapid growth followed by a major recession. We examine how biodiversity conservation nonprofits in the US responded to these changes through their financial behaviors, focusing on a sample of 90 biodiversity conservation nonprofits and the largest individual organization (The Nature Conservancy; TNC). For the 90 sampled organizations, an analysis of financial ratios derived from tax return data revealed little response to economic conditions. Similarly, more detailed examination of conservation expenditures and land acquisition practices of TNC revealed only one significant relationship with economic conditions: TNC accepted a greater proportion of conservation easements as donated in more difficult economic conditions. Our results suggest that the financial behaviors of US biodiversity conservation nonprofits are unresponsive to economic conditions.

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A Financial Rating System for Charitable Nonprofit Organizations

Cited by 72 publications

References 12 publications

Financial And Non-financial Factors Motivating Individual Donors To Support Public Benefit Organizations

Financial And Non-financial Factors Motivating Individual Donors To Support Public Benefit Organizations

An Accountability Framework for the Financial Sustainability of Australian International Development Organisations

A lack of response of the financial behaviors of biodiversity conservation nonprofits to changing economic conditions

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