Analysis of Determinants of Revenue Sources for International NGOs

Abstract

Securing financial sustainability through fundraising and other forms of financing is a critical issue for many nonprofit organizations. This article extends the benefits theory by adding beneficiary and organizational characteristics to it and examines how these characteristics affect revenue source composition. Based on a survey of International Nongovernmental Organizations (INGOs) with headquarters in Switzerland, the results quantitatively demonstrate a predictive relationship between programmatic and financial management: First, Swiss-based INGOs' revenue sources rely heavily on income-generating revenue sources. Second, the efficacy of the benefits theory of nonprofit finance is demonstrated outside of the organizational context of U.S. local/national nonprofits. Third, INGOs' organizational and beneficiary characteristics influence their revenue source composition. Fourth, the results demonstrate clear differences between revenue sources. Fifth, overall, the beneficiary field is the most influential of the proven characteristics in determining revenue source percentages.

Modalities of Managerialism: The “Double Bind” of Normative and Instrumental Nonprofit Management Imperatives

“…Benefits theory proposes that a nonprofit’s revenue streams should reflect whether the organization’s program activities primarily generate private benefits to individuals, group benefits to identifiable subgroups of society, public benefits to society at large, or trade benefits to organizations or individuals that supply resources to nonprofits (Young, 2006). Subsequent research has largely confirmed the test implications of benefits theory, finding that nonprofits whose programs provide public benefits tend to have more donative funding, while nonprofits whose programs provide private benefits tend to have more earned income (Aschari-Lincol & Jäger, 2015; Fischer, Wilsker, & Young, 2011). The match between program benefit and revenue source may be taken as an indication of the appropriateness of an organization’s income portfolio.…”

Which Public Attraction Gets (and Gets More) Government Funding? The Effects of Internal and External Factors

“…Compared to RDT, benefits theory takes a more direct view of resources for social purpose organizations by connecting the benefits of the provided services/goods to the types of revenue sources (Aschari-Lincoln and Jäger 2016). Benefits theory proposes that social purpose organizations achieve their social missions and generate benefits for various beneficiary groups through the provision of goods and services.…”

“…Empirical research in public administration has provided substantial support for benefits theory (Aschari-Lincoln and Jäger 2016; Fischer, Wilsker, and Young 2011). Fischer, Wilsker, and Young (2011) is the first study to empirically test the theory.…”

Understanding success in micro‐enterprise development: Dimensions and misconceptions

“…In an organisational context, financial sustainability refers to long-term business survival (Costanza & Patten, 1995), the ability of an organisation to generate necessary revenues to cover expenses (Aschari-Lincoln & Jäger, 2016;Manuel Pedro Rodríguez et al, 2018), and be able to pay debts in the long term (Nyankomo & Aziakpono, 2015). In the context of micro-enterprises, similar to small business literature, their long-term survival (or financial sustainability) is reflected through profitable, self-funding operations, independent of ongoing government or non-government (e.g., NGO) assistance (Lohmer, 2008;Sheremenko et al, 2017;Strier, 2010).…”