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Financial resilience, income dependence and organisational survival in UK charities

Green, Elizabeth; Ritchie, Felix; Bradley, Peter; Parry, Glenn

Authors

Glenn Parry Glenn.Parry@uwe.ac.uk
Academic Associate Lecturer - BAM



Abstract

The financial well-being of the charity sector has important social implications. Numerous studies have analysed whether the concentration of income in a few sources increases financial vulnerability. However, few studies have systematically considered whether the type of income (grants, donation, fund-raising activities) affects the survival prospects of the charity. We extend the literature by (a) explicitly modelling the composition of sources of income, (b) allowing for short-term volatility as well as long-term survival and (c) testing alternative specifications in a nested form. We show that the usual association between income concentration per se and financial vulnerability is a specification error. Greater vulnerability is associated with dependence on grant funding, not overall concentration. Previous studies showing that concentration of income per se is problematic are picking up a proxy effect. We also show that the volatility of income streams may be an important factor in the survival of charities, but that this also varies between income sources.

Citation

Green, E., Ritchie, F., Bradley, P., & Parry, G. (in press). Financial resilience, income dependence and organisational survival in UK charities. Voluntas: International Journal of Voluntary and Nonprofit Organizations, https://doi.org/10.1007/s11266-020-00311-9

Journal Article Type Article
Acceptance Date Dec 22, 2020
Online Publication Date Jan 27, 2021
Deposit Date Jan 8, 2021
Publicly Available Date Jan 28, 2022
Journal Voluntas
Print ISSN 0957-8765
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
DOI https://doi.org/10.1007/s11266-020-00311-9
Keywords charity, nonprofit, financial resilience, funding
Public URL https://uwe-repository.worktribe.com/output/6975797