Charity for Profit? Exploring Factors Associated with the Commercialization of Human Service Nonprofits

Abstract

Human service nonprofits are becoming increasingly involved with selling services and other commercial activities. There has been a debate about the advantages and disadvantages of the transition of human service nonprofits. A path model was constructed to understand factors associated with the commercialization of human service nonprofits. The model was tested using the data collected from 67 human service nonprofits. The model showed an overall statistical fit. It was found that commercial revenues were negatively associated with donative revenues. Higher levels of commercial income can significantly contribute to an organization's self-sufficiency, ability to attract and retain staff, and reputation. However, commercial revenues do not make a significant contribution to the organization's ability to attract donors and volunteers, mission, and service delivery when the effects of other variables are controlled for. Limitations of the data and methodology used for this study are discussed and suggestions for future research are provided.