Racial and Ethnic Composition of the Neighborhood and the Disbanding of Nonprofit Human Service Organizations

Abstract

This paper draws insights from the sociological study of residential segregation and the institutional perspective on organizations to examine the influence of the racial and ethnic composition of the neighborhood on organizational disbanding. The analysis, which combines panel data on a probability sample of nonprofit human service organizations with census data, reveals systematic differences: The percentage of Blacks and Latinos in the census tract is positively associated with the odds that organizations surveyed in 2002 had disbanded by 2011 after controlling for a variety of organizational and environmental factors. By contrast, an increase in the percentage of Whites in the census tract decreased the odds of organizational disbanding. Results highlight the effects of the racial and spatial landscape on organizational life chances, with implications for the capacity of the nonprofit human services sector to reach the most isolated and disadvantaged populations.

Understanding the Dissolution of Nonprofit Organizations: A Financial Management Perspective

“…Over the past 30 years, organizational scholars have examined various internal and external causes of organizational dissolution (see Habersang, Küberling-Jost, Reihlen, & Seckler, 2017; Mellahi & Wilkinson, 2004). In the nonprofit context, research on organizational dissolution has grown gradually since the 1990s, identifying a number of potential factors such as funding streams, neighborhood demographic composition, nonprofit sector density, organizational age, organizational form, organizational size, service fields, and staffing practices (e.g., Bielefeld, 1994; Bouchard & Rousselière, 2016; Garrow, 2015; Hager et al, 2004; Harrison & Laincz, 2008; Twombly, 2003). Our study adds to this growing body of literature on nonprofit dissolution by examining the effects of spending patterns (especially, overhead costs) and revenue structures on organizational dissolution.…”

“…Our use of auto-revocation information in measuring organizational dissolution has some advantages over other measures in previous large-scale quantitative studies (e.g., Bouchard & Rousselière, 2016; Garrow, 2015; Twombly, 2003; Walker & McCarthy, 2010). For example, using 3-year consecutive noncompliance with the filing requirement to infer organizational dissolution is more accurate than using non-reporting in random years, as nonprofits could fail to file in 1 or 2 years for unknown reasons but remain active.…”

“…Second, an organization’s niche characteristics affect its survival prospect (Bielefeld, 1994; Garrow, 2015; Paarlberg, An, Nesbit, Christensen, & Bullock, 2018). We thus included several county-level variables to control for the impacts of market structure and community characteristics.…”

“…For example, U.S. public charities had an average annual exit rate of 2.14% for the 1989-2000 period (Harrison & Laincz, 2008). In addition, roughly 14% of human service nonprofits in Los Angeles County were disbanded between 2002 and 2011 (Garrow, 2015), and 7.6% of social economy organizations in the Montreal region dissolved over 2007-2012 (Bouchard & Rousselière, 2016). 1…”

Relevance of indicators linked to communication and accountability in not-for-profit organizations

“…Esta circunstancia le ha permitido estar inmerso en un proceso de madurez y de reconocimiento como agente de transformación social, trabajando más allá de las buenas intenciones, para alcanzar una legitimidad y credibilidad ante la comunidad (Garrow 2015;Beer y Michelli 2017;Mazzei 2017).…”