The Effects of External Financial Support on the Capacities of Educational Nonprofit Organizations

Abstract

Official development assistance provides an immense flow of financial funding to educational nonprofit organizations (NPOs). This source of funding faces criticism because of the unintended indirect effects it has in lowering the relative level of local NPOs’ capacities. Our contribution addresses NPOs’ financial capacities in an OECD country that receives a vast inflow of EU funding; namely the Czech Republic. To answer the research question on what impact the external financial assistance has on capacities in NPOs, we applied propensity score matching to a sample consisting of 633 educational NPOs covering the years 2006–2013. EU-funded NPOs report higher levels of real revenues, but not real assets, than non-funded NPOs. The EU funding helps in the short-term to improve NPOs’ budgets, but not to increase assets.

Inhibitors of non-for-profit organisations’ activities and survival in a crisis context

“…Drawing on Bagozzi (1994, p.156) conceptualisation of marketing exchange system and extending it more explicitly to the not for profit sector, we argue that NPOs are social exchange actors whose behaviour is "being embedded in a complex system of facilitators and inhibitors with some under control of the parties and some part of the social fabric …" and contend that Bagozzi's framework offers a holistic representation of the complex system of exchange in between NPOs and between NPOs and their stakeholders e.g. businesses donors which are more profit oriented for most of them (Potluka and Svecova, 2019). Indeed, NPOs are facing challenges impeding their activities and threatening their fragile equilibrium (Dhakal, 2015;Klaas and Dirsus, 2018;Cherif, 2018;Forbes, 2019) as they are depending largely on their stakeholders for resources (e.g.…”

“…Indeed, NPOs are facing challenges impeding their activities and threatening their fragile equilibrium (Dhakal, 2015;Klaas and Dirsus, 2018;Cherif, 2018;Forbes, 2019) as they are depending largely on their stakeholders for resources (e.g. funding, members) in order to achieve their objectives, and they are witnessing decreasing resources due to State disengagement (Potluka and Svecova, 2019), more restrictive legislation for financial accountability and increasing competition between the hodgepodge NPOs for funding (Klaas and Dirsus, 2018). Moreover, Helmig et al, (2014) called for more research addressing the not for profit sector issues.…”

“…and contend that Bagozzi's framework offers a holistic representation of the complex system of exchange in between NPOs and between NPOs and their stakeholders e.g. businesses donors which are more profit-oriented for most of them (Potluka and Svecova, 2019). Indeed, NPOs are facing challenges impeding their activities and threatening their fragile equilibrium (Dhakal, 2015;Klaas and Dirsus, 2018;Cherif, 2018;Forbes, 2019) as they are depending largely on their stakeholders for resources (e.g.…”

“…By pursuing this objective, we contribute to recent calls to question the ability of the not for profit sector to increase social capital (Potluka et al, 2017) through the identification of the factors that impede the implementation of NPOs activities, and hence the suggestion of the appropriate strategies. This is even more critical considering the challenges impeding NPOs activities and threatening their fragile equilibrium (Klaas and Dirsus, 2018;Cherif, 2018;Forbes, 2019) as they depend largely on their stakeholders for resources and funding to achieve their objectives, and they are witnessing decreasing resources due to State disengagement (Potluka and Svecova, 2019), more restrictive legislation for financial accountability and increasing competition between the hodgepodge NPOs for funding (Klaas and Dirsus, 2018).…”

Tourism Indicators and Their Differentiated Impact on Sustainable Tourism Development

“…The effort is, with regard to resource capacities, to support the development of tourism in which the optimization of economic, environmental, social and cultural benefits will ensure the balance and sustainability of the country's development (Potluka, & Svecova, 2019;Plesník et al 2020;Švedová 2020). Governments can also take initiatives to increase the quality of political (Civelek & Krajčík, 2022), legal and economic institutions to create a more competitive environment (Civelek et al, 2023) that improves the economic conditions of nations (Ključnikov et al, 2022).…”