Abstract
This paper examines the effects of organizational attributes on nonprofit financial stability measured by revenue diversification. By combining institutional theory, resource dependence theory, and financial portfolio theory literature, this study seeks to provide a systematic understanding of nonprofits’ organizational factors that influence their financial stability and, furthermore, organizational sustainability. A structural equation model was developed for an empirical test, based on survey data of nonprofits in the Washington state. This research finds that nonprofits with higher managerialism or higher collaboration are more likely to have diversified revenue portfolios, controlling for other organizational factors. In contrast, community ties have a negative impact on revenue diversification.
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