Chapter 9: Understanding Revenues Flashcards
What percent of the American workforce is employed by nonprofits?
10%
Term for the phenomenon of the poor and unfortunate that need basic services a civilized society does not provide
Market failure
Term for governments not setting taxation high enough to produce an adequate supply of public good and services for the needy
Government failure
Benefit Theory
Dennis Young
Classifies benefits that nonprofit organizations generate into 4 broad categories based on goods/services they provide: private benefits, group benefits, public benefits, trade benefits. Nonprofits should seek support from beneficiaries and/or those who value the benefits.
Private Benefits
Accrue to clients and consumers of the nonprofits’ services. Rival and excludable. (example: private nursing care)
Group Benefits
Accrue to specific constituencies associated with causes that potential donors value and are willing to support. Often have significant externalities. (example: free access to classical music)
Public Benefits
Accrue to the general public. Nonrival and nonexcludable between beneficiaries. (example: clean air)
Public Goods
One person’s consuming the benefit does not reduce the benefit for others, and nonpayers can not be excluded from the benefit
Trade Benefits
Accrue to organizational partners in a quid pro quo relationship
Quid Pro Quo
A favor or advantage granted or expected in return for something
Sources of revenue for nonprofits (3)
- Public support
- Private donations
- Earned revenue
What is (overall) the largest source of revenue for nonprofits?
Earned revenue / fees for goods and services (from private sources)
What group provides the greatest revenue sources to nonprofits?
- Corporations
- Foundations
- Individuals
- Bequests
Individuals (private donation)
Categories of motivation for corporate grants (2)
- Charitable giving
2. Strategic alliances (mutually beneficial)
What type of organization receives the largest share of nonprofit donations? What approximate percent?
Religious
35%
Types of government support for charities (2)
- Contracts
2. Grants
Heartfelt Connectors (nonprofit model)
Focus on causes that resonate with large numbers of people, creating structured ways for these people to connect and donate
(example: cancer foundation)
Beneficiary Builders (nonprofit model)
Financed by reimbursement for services they provide to specific individuals, but at the same time rely on people who have benefited from their services in the past
(example: University alumni)
Member Motivators (nonprofit model)
Rely on individuals who donate money because the issues the nonprofit addresses are important to these donors’ values’
Big Bettors (nonprofit model)
Rely on major grants from a few individuals or foundations to address major solutions with promising solutions
(example: Stanley Medical Research Institute)
Public Providers (nonprofit model)
Provide essential social services that are traditionally supported by governments
(example: foundation that provides services in housing, human services, and education)
Policy Innovators (nonprofit model)
Develop novel methods to address social issues. Financed primarily through government support.
Beneficiary Brokers (nonprofit model)
Compete to match up government services with intended beneficiaries. Often manage voucher programs. Supported by the government.
Resource Recyclers (nonprofit model)
Nonprofits that collect donations from corporations and individuals, and distribute these donated goods to other nonprofits that provide direct services to need recipients. Receive in-kind donations, but also need funds to finance operations.
(example: food bank)
Market Makers (nonprofit model)
Provide services where there is a need, but no market to fill the need. Generally health care.
Local Nationalizers (nonprofit model)
Focus on local issues that are also common and important across the nation. Often locally funded.
