What Factors Affect the Entry and Exit of Nonprofit Human Service Organizations in Metropolitan Areas?

Abstract

The goal of this article is to advance the literature on nonprofit organizational adaptation by assessing the factors that significantly contribute to the entry and exit of human service organizations in metropolitan areas. More specifically, this study uses nonprofit, economic and demographic data and information on welfare reform implementation patterns to examine the causes of the formation and deaths of groups in the nonprofit human service sector from 1992 to 1996. This time frame marked the widespread implementation of welfare reform under the federal Aid to Families With Dependent Children (AFDC) waiver program. This study found that organizational size, age, and service activities are the key determinants in the failure of human service nonprofits, whereas environmental factors such as AFDC waiver implementation relate to the widespread formation of nonprofit providers.