Nonprofit Responses to Financial Uncertainty: How Does Financial Vulnerability Shape Nonprofit Collaboration?


  •  Heather MacIndoe    
  •  Felicia Sullivan    

Abstract

Nonprofit organizations are a vital part of the U.S. social safety net providing a wide range of services in the
modern welfare state. While many individuals and families turn to nonprofits for help during economically
challenging times, these organizations themselves often face turbulent funding environments and uncertain financial futures. Nonprofit stakeholders urge within-sector collaborations (with other nonprofits) and cross-sector collaborations (with for-profit firms and government agencies) as a means to achieve efficiencies in service delivery, stretch donation dollars, and increase the long-term fiscal sustainability of the nonprofit sector.
While increased financial stability is a presumed outcome of nonprofit collaborations, we know little about the
antecedent effect of nonprofit financial vulnerability on collaboration. Using data from a survey of nonprofit
executive directors in Boston, Massachusetts, this paper examines how nonprofit financial vulnerability influences nonprofit collaborations. We find that nonprofit financial vulnerability decreases the likelihood of
both within- and cross-sector collaborations. Resource dependence on private funding increases within-sector
collaboration with other nonprofits, while reliance on government funding increases the likelihood of
cross-sector collaboration. Cross-sector board linkages also increase the likelihood of collaborations. Nonprofit stakeholders should consider these findings when promoting collaboration as a path to nonprofit fiscal sustainability.


This work is licensed under a Creative Commons Attribution 4.0 License.
  • Issn(Print): 1925-4725
  • Issn(Onlne): 1925-4733
  • Started: 2011
  • Frequency: semiannual

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