Does a More Diversified Revenue Structure Lead to Greater Financial Capacity and Less Vulnerability in Nonprofit Organizations? A Bibliometric and Meta-Analysis

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This article explores how and to what extent revenue diversification and concentration strategies affect financial performance, particularly financial capacity and vulnerability, in nonprofit organizations. Using a sample collected from a systematic literature search of all major databases, we first conducted a bibliometric analysis of 86 existing studies to visualize the clusters of major topics in this area and to explore the connections between existing studies. We then employed a meta-analysis to quantitatively synthesize 258 effect sizes from 23 existing empirical studies. We found that diversification had little effect on financial vulnerability, but it had a slightly negative effect on financial capacity. The article finally uses a meta-regression to discuss some of the theoretical and practical reasons why there is inconsistency in the results across existing studies and calls for more discussion of the assumptions and effectiveness of revenue diversification among nonprofit scholars and practitioners.