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Nonprofits receive funding from multiple revenue sources, including private contributions and earned program revenues. In this article, we hypothesize that the composition of revenues is a result of the nature of services provided—specifically whether services are public, private, or mixed in the nature of their benefits. Using subfields from three major fields in the National Taxonomy of Exempt Entities (NTEE), this study divides nonprofits according to service type and estimates the impact of service character on particular revenue streams and overall revenue diversification. Generally, we find that the proportion of revenues generated by earned program revenues is lowest for the category deemed public, highest for those with mostly private benefits, and midway for those classified as mixed. Similarly, the more public a nonprofit’s services, the greater its reliance on donations. We also identify some puzzling results that suggest the need for continued investigation.
public goods, nonprofit revenue, income portfolio, diversification, nonprofit finance
Nonprofit and Voluntary Sector Quarterly
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Fischer, R. L., Wilsker, A., & Young, D. R. (2011). Exploring the Revenue Mix of Nonprofit Organizations: Does It Relate to Publicness? Nonprofit and Voluntary Sector Quarterly, 40(4), 662-681. https://doi.org/10.1177/0899764010363921